China's urban health insurance reform experiment in Zhenjiang: cost and utilization analyses

Lesson‐drawing under authoritarianism: generosity and cost control in China's hospital payment reforms

“…However, following the return to fee-for-service, pressure on the funds continued to increase because induced demand by hospitals reportedly pushed more people above the thresholds rendering them eligible for inpatient reimbursement (Liu, 2008c). So, based on its 1999 data, Zhenjiang tested payment by disease type for 20 illnesses in 2000 (Ding & Yao, 2001).…”

“…So, based on its 1999 data, Zhenjiang tested payment by disease type for 20 illnesses in 2000 (Ding & Yao, 2001). In 2001, the city then switched to lump sums for 82 diseases (type B2), accompanied by lump sums based on capitation for other inpatient services (Liu, 2008c;Yao et al, 2017). Both methods are robust against countermeasures such as unnecessarily prolonging hospitalizations.…”

“…But, as a leading official from the city explained in an interview with a leading Chinese social policy journal, the lump-sum approach (type C2) did not work as anticipated. In 1995, the pooling fund was in equilibrium; but in 1996, the average costs of care rose by 17%, and the insurance fund's expenditures by 42% (Liu, 2008c). The official interviewed attributed part of the cost increases to hospitals' countermeasures.…”

“…130-134).11 The city had previously experimented with conventional health insurance(Zheng, 2008, p. 102f).12 For example, outpatient visits were decomposed to multiple visits to charge the per-visit lump sum multiple times.13 Since 1997, the city of Mudanjiang in Heilongjiang Province used lump sums for specific illnesses in hospital payments as well(Gu, 2020, p. 70; Yu, 2009, p. 90). In the interview above, the official from Zhenjiang made no reference to international models, which may point to a lesson drawn from mainland China(Liu, 2008c).14 The caps should be set for each hospital based on historical data, while considering differences in the level of provision and the nature of the services provided.15 Such approaches have been promoted by the MoH since 2004 and have been implemented in pilot hospitals in various regions. The illness categories should be oriented toward international standards such as ICD-10, and the central health and pricing authorities have released various documents developing disease-related quality and cost standards for these approaches(Gu, 2020, p. 66f).…”