Abstract
ObjectiveThe New Rural Cooperative Medical Scheme (NCMS) is a universal healthcare coverage plan now covering over 98% of rural residents in China, first implemented in 2003. Rising costs in the face of modest gains in health and financial protections have raised questions about the cost-effectiveness of the NCMS.MethodsUsing the most recent estimates of the NCMS’s health and economic consequences from a comprehensive review of the literature, we conducted a cost-effectiveness analysis using a Markov model for a hypothetical cohort between ages 20 and 100. We then did one-way sensitivity analyses and a probabilistic sensitivity analysis using Monte Carlo simulations to explore whether the incremental cost-effectiveness ratio (ICER) falls below 37,059 international dollars [Int$], the willingness-to-pay (WTP) threshold of three times per capita GDP of China in 2013.FindingsThe ICER of the NCMS over the lifetime of an average 20-year-old rural resident in China was about Int$71,480 per quality-adjusted life year (QALY) gained (95% confidence interval: cost-saving, Int$845,659/QALY). There was less than a 33% chance that the system was cost-saving or met the WTP threshold. However, the NCMS did fall under the threshold when changes in the program costs, the risk of mortality and hypertension, and the likelihood of labor force participation were tested in one-way sensitivity analyses.ConclusionThe NCMS appears to be economically inefficient in its current form. Further cost-effectiveness analyses are warranted in designing insurance benefit packages to ensure that the NCMS fund goes toward health care that has a good value in improving survival and quality of life.
Highlights
By pooling financial risk, health insurance aims to alleviate economic barriers to accessing health care, thereby improving health and longevity [1,2,3]
We evaluated the cost-effectiveness of the New Rural Cooperative Medical Scheme (NCMS) from a societal perspective and considered its effects on the risk of mortality and hypertension, total health expenditure per rural resident, while including the indirect effects associated with increased labor force participation
We assessed the health effects of the NCMS using quality-adjusted life years (QALYs), which combines both quantity of life and health-related quality of life (HRQL) [23]
Summary
Health insurance aims to alleviate economic barriers to accessing health care, thereby improving health and longevity [1,2,3]. The Cooperative Medical Scheme (CMS) was the primary system for providing basic health care to rural residents during the 1950s and 1970s [4]. The market economy reform led to the collapse of both collective farming and the CMS, leaving the majority of rural residents uninsured in the 1990s [5,6,7]. In 2003, China initiated the New Rural Cooperative Medical Scheme (NCMS) [6]. The NCMS is financed by a combination of individual users and government funds [9,10]. Within this system each county is responsible for designing their own benefit packages [10]. More details about the scheme’s regional heterogeneity could be found in [11,13]
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