Cost sharing in healthcare: A comparative study of German and Chinese health insurance

Abstract

The author compares cost sharing in German and Chinese health insurance from theoretical, empirical and historical perspectives. Theoretically, when cost sharing exceeds a certain number, healthcare utilization would stay constant at a relatively low level even with the decrease of cost sharing. Only when cost sharing has already been below a certain number, healthcare utilization would increase with the decrease of cost sharing. Empirically, as shown in Chapter 2, since cost sharing in Germany keeps at a relatively low level, ambulatory care utilization for the older people significantly increased in the short run after copayment was abolished from the level of 10 €. And we have also detected a long-term negative effect on both ambulatory care and inpatient care utilization. Furthermore, as illustrated in Chapter 3, outpatient care utilization did not change for the older people in China when coinsurance for outpatient care was reduced from a relatively high level of 75% to 55%. Historically, as shown in Chapter 1, the paths of health insurance system between Germany and China vary dramatically. In Germany, health insurance system starts with a relatively small coverage of population but comprehensive healthcare coverage and almost entire reimbursement for covered care, which is followed by more enrolled population and optimized benefit packages. In this whole process, cost sharing has mainly played as a means of controlling unnecessary healthcare utilization and containing health cost. In China, the full coverage of population has been given a priority, and the two other coverages have to give way to population coverage, that insufficient reimbursement for covered care (high cost sharing) and limited benefit packages. As a result, cost sharing has served as a financing means. In addition, as shown in Chapter 4 and Chapter 5, German and Chinese health insurance systems are in various developmental phases, which could be determined by economic development and health insurance policy design. The GDP per capita (purchasing power parity based) in China only accounted 20% of the one in Germany in 2017. Such economic background determines limited health expenditure, and health expenditure as a percentage of GDP also only accounted far below 10% in China. Besides, drop-out issue still exists in the NCMS and the social health insurance in China is not yet mature, which reveals that there are some problems in health insurance policy design.