Assessing the long-term effects of Basic Medical Insurance on catastrophic health spending in China

Abstract

Many developing countries have implemented social health insurance programs to protect their citizens against the financial risks of seeking healthcare. While many studies have explored how individual insurance enrollments affect catastrophic health spending (CHS) in the short term, there is a lack of evidence on the long-term macro-level effects of social health insurance on CHS in low- and middle-income countries. This study examines the long-term effects of Basic Medical Insurance (BMI) on individual CHS in China, a middle-income country that has witnessed one of the highest worldwide increases in CHS rates despite its remarkable achievement of universal health insurance coverage. Specifically, we used existing longitudinal data from 1989 to 2015, therein assessing BMI policy effects by constructing two macro-level indicators, including the year of BMI presence at the prefectural level and number of years relative to BMI introduction. We employed a three-level difference-in-differences approach for the estimation. There were two main findings. First, BMI policy did not significantly reduce the probability of incurring CHS for BMI enrollees over time. Years after BMI was introduced, the policy even predicted a significant increase in the probability of incurring CHS for individuals who shifted their enrollments from traditional insurance to BMI. Second, BMI policy had spillover effects on the increase in the probability of incurring CHS for non-BMI individuals a few years after its inception. We believe there are three possible explanations for these findings: (1) shrinking BMI service coverage compared to pre-existing government-funded insurance schemes, (2) a profit-driven hospital reform that induces the overuse of expensive medicines and diagnostic tests, and (3) the absence of strategic purchasing among local BMI agencies. We also discuss how relevant policy interventions may alleviate insurance-driven financial risks.

Analysis of the Operational Efficiency of Basic Medical Insurance for Urban and Rural Residents: Based on a Three-Stage DEA Model

“…Currently there is an inflation of the health insurance fund expenditures, due to fraud, and due to the influential relationship of the payment methods on the irrational use of health insurance funds. China has been reforming its health insurance system in recent years, including the diagnosis-related groups by disease (DRGs) in hospitals, as well as the capitation and prepayment systems in the basic level [ 2 ]. Scientific payment methods are the key to control the overuse of services and drugs and the growing health care expenditures, which will drive the reform of the health insurance system [ 29 ], so the promotion of hybrid payments for health insurance is necessary.…”

“…The health insurance system is an important system for maintaining and promoting public health. With the development of health care, China’s basic medical insurance (BMI) continues to reform, aiming to reduce catastrophic health expenditures by increasing subsidies, reimbursements and benefits in an effort to achieve universal coverage and better health care [ 2 , 3 ]. In 2016, China’s State Council issued opinions on integrating urban and rural basic medical insurance systems, which integrated the two systems of the urban residents’ basic medical insurance and the new rural cooperative medical care, to establish a unified urban and rural residents’ basic medical insurance system, as a way to improve the efficiency of the medical insurance operations and to serve the people.…”

Changes in health care utilization and financial protection after integration of the rural and urban social health insurance schemes in Beijing, China

“…In our study, we constructed a binary variable at individual level to identify whether respondents had CHE. Following previous research [4,33], people who annually spent 25% or more of its annual per capita household non-food consumption on health services were defined as suffering CHE in our study. The formula of CHE was shown as follows:…”

Commercial Health Insurance, Catastrophic Medical Expenditures and Resident Income Inequality

“…Furthermore, more and more new technologies and new drugs are used for clinical therapy with the continuous innovative development of medical technologies and products (Tren eld et al, 2022). Driven by pro ts, expensive drugs and detection tests are used excessively in clinical care, incurring high medical expenses for patients (Liu et al, 2022). On the other hand, the high price of drugs for certain rare diseases is an important cause of disease-induced poverty.…”