Abstract
BackgroundThe disparity between government health expenditures across regions is more severe in developing countries than it is in developed countries. The capitation subsidy method has been proven effective in developed countries in reducing this disparity, but it has not been tested in China, the world’s largest developing country.MethodsThe convergence method of neoclassical economics was adopted to test the convergence of China’s regional government health expenditure. Data were obtained from Provinces, Prefectures and Counties Fiscal Statistical Yearbook (2003–2007) edited by the Chinese Ministry of Finance, and published by the Chinese Finance & Economics Publishing House.ResultsThe existence of σ-convergence and long-term and short-term β-convergence indicated the effectiveness of the capitation subsidy method in the New Rural Cooperative Medical Scheme on narrowing county government health expenditure disparities. The supply-side variables contributed the most to the county government health expenditure convergence, and factors contributing to convergence of county government health expenditures per capita were different in three regions.ConclusionThe narrowing disparity between county government health expenditures across regions supports the effectiveness of the capitation subsidy method adopted by China’s New Rural Cooperative Scheme. However, subsidy policy still requires further improvement.
Highlights
The disparity between government health expenditures across regions is more severe in developing countries than it is in developed countries
Capitation subsidy methods have proven effective in improving the equity of government health expenditure (GHE) in developed countries [6, 7], but how effective have they been in developing countries? What are the influencing factors if capitation subsidy methods are used in developing countries? Some research has been conducted in developing countries, but this study explores the effectiveness and primary influencing factors of capitation subsidies on regional GHE equity in China, the world’s largest developing country
The shift in allocation methods of the new fund from the traditional method to the capitation subsidy would significantly improve the equity of regional GHE in China
Summary
The disparity between government health expenditures across regions is more severe in developing countries than it is in developed countries. The most effective and equitable way to achieve universal health coverage is through obligatory funding such as taxation or social health insurance [2]. This requires allocating the raised funds equitably across regions. Both developed and developing countries to some extent face regional government health expenditure (GHE) disparities [3,4,5]. England and Sweden have been exploring how to use weighted capitation subsidy methods to achieve equitable resource allocation, and their research has offered
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