Competent Alternative Model for the Peasants' Medical Expenditures in China: A Case of New Rural Cooperative Medical Service System (Nrcms) in Zhejiang Province

Abstract

The New Rural Cooperative Medical Service System (NRCMS) in China has been established to ensure improved medical care support for all categories of Chinese peasants to offset their burden of excessive medical care expenditures. The primary aim of this paper is to identify an appropriate alternative modelling approach for the patients’ medical expenditures. Data were collected from Jiaojiang city through cluster and multistage random sampling procedure, which was comprised of 4,630 enrolled rural people under NRCMS. The paper presented the fi rst comparison of common econometric medical expenditures modelling approaches. Major fi ndings reveal that the Generalized Linear Model (GLM) predictive accuracy appears to be better than the Finite Mixture Model (FMM) and GLM (log link) was the best performer among all approaches. It may be attributed due to the structural difference of medical expenditures between China and other developing countries compared to the developed countries. This suggests that the Chinese government may fi nd an alternative to choose GLM approach among others to minimize the peasants’ medical expenditures under NRCMS.