Health financing and integration of urban and rural residents\u2019 basic medical insurance systems in China

Kun Zhu,Zhiruo Zhang,Xiaojuan Zhang,Shasha Yuan,Luying Zhang

doi:10.1186/s12939-017-0690-z

Abstract

BackgroundChina is in the process of integrating the new cooperative medical scheme (NCMS) and the urban residents’ basic medical insurance system (URBMI) into the urban and rural residents’ basic medical insurance system (URRBMI). However, how to integrate the financing policies of NCMS and URBMI has not been described in detail. This paper attempts to illustrate the differences between the financing mechanisms of NCMS and URBMI, to analyze financing inequity between urban and rural residents and to identify financing mechanisms for integrating urban and rural residents’ medical insurance systems.MethodsFinancing data for NCMS and URBMI (from 2008 to 2015) was collected from the China health statistics yearbook, the China health and family planning statistics yearbook, the National Handbook of NCMS Information, the China human resources and social security statistics yearbook, and the China social security yearbook. “Ability to pay” was introduced to measure inequity in health financing. Individual contributions to NCMS and URBMI as a function of per capita disposable income was used to analyze equity in health financing between rural and urban residents.ResultsURBMI had a financing mechanism that was similar to that used by NCMS in that public finance accounted for more than three quarters of the pooling funds. The scale of financing for NCMS was less than 5% of the per capita net income of rural residents and less than 2% of the per capita disposable income of urban residents for URBMI. Individual contributions to the NCMS and URBMI funds were less than 1% of their disposable and net incomes. Inequity in health financing between urban and rural residents in China was not improved as expected with the introduction of NCMS and URBMI. The role of the central government and local governments in financing NCMS and URBMI was oscillating in the past decade.ConclusionsThe scale of financing for URRBMI is insufficient for the increasing demands for medical services from the insured. The pooling fund should be increased so that it can better adjust to China’s rapidly aging population and epidemiological transitions as well as protect the insured from poverty due to illness. Individual contributions to the URBMI and NCMS funds were small in terms of contributors’ incomes. The role of the central government and local governments in financing URRBMI was not clearly identified. Individual contributions to the URRBMI fund should be increased to ensure the sustainable development of URRBMI. Compulsory enrollment should be required so that URRBMI improves the social medical insurance system in China.

Highlights

China is in the process of integrating the new cooperative medical scheme (NCMS) and the urban residents’ basic medical insurance system (URBMI) into the urban and rural residents’ basic medical insurance system (URRBMI)
In 2007, the State Council of China issued directives on the pilots of the urban residents’ basic medical insurance system and determined that families would be the key contributors to its financing and that public finance would subsidize it to some extent [6]
Coverage of NCMS and URBMI Rural residents were mainly covered by NCMS

Summary

Introduction

China is in the process of integrating the new cooperative medical scheme (NCMS) and the urban residents’ basic medical insurance system (URBMI) into the urban and rural residents’ basic medical insurance system (URRBMI). To improve equity in health financing and especially to protect rural Chinese residents from impoverishment by illness, in 2002, China’s government decided to establish a wide and shallow social medical insurance system called New Cooperative Medical Scheme (NCMS), which covered rural residents [3]. In 2007, most rural counties and more than 85% of rural residents were covered by NCMS, which had voluntary enrollment [5] Based on their experience with NCMS, China’s government began to establish a new medical insurance system called the Urban Residents’ Basic Medical Insurance (URBMI) system, which covered urban residents who were not covered by the urban employees’ basic medical insurance system. In 2007, the State Council of China issued directives on the pilots of the urban residents’ basic medical insurance system and determined that families would be the key contributors to its financing and that public finance would subsidize it to some extent [6]

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