Abstract
Improving health outcomes of rural populations in low- and middle-income countries represents a significant challenge. A key part of this is ensuring access to health services and protecting households from financial risk caused by unaffordable medical care. In 2003, China introduced a heavily subsidised voluntary social health insurance programme that aimed to provide 800 million rural residents with access to health services and curb medical impoverishment. This paper provides new evidence on the impact of the scheme on health care utilisation and medical expenditure. Given the voluntary nature of the insurance enrolment, we exploit the uneven roll-out of the programme across rural counties as a natural experiment to explore causal inference. We find little effect of the insurance on the use of formal medical care and out-of-pocket health payments. However, there is evidence that it directed people away from informal health care towards village clinics, especially among patients with lower income. The insurance has also led to a reduction in the use of city hospitals among the rich. The shift to village clinics from informal care and higher-level hospitals suggests that the NRCMS has the potential to improve efficiency within the health care system and help patients to obtain less costly primary care. However, the poor quality of primary care and insufficient insurance coverage for outpatient services remains a concern.
Highlights
Financial constraints are one of the major causes of insufficient health care and impoverishment for poor people in developing countries [1]
Conditioning on the village-level urbanicity index and province fixed effects, we argue that county-level insurance status provides a source of exogenous variation in individual insurance enrolment and it is not likely to be correlated with individual health care utilisation and medical expenses in any other way besides through the insurance
These conditions are likely to hold in many other low- and middle-income countries that are considering whether to invest more in national insurance schemes to achieve universal coverage
Summary
Financial constraints are one of the major causes of insufficient health care and impoverishment for poor people in developing countries [1]. A lack of financial protection prevents people from accessing necessary health care and puts them at risk of financial hardship following payments for health services [2]. To tackle these issues, many low- and middle-income countries have introduced state-sponsored insurance programmes for people working in informal sectors with the aim of enhancing access to healthcare and providing financial protection from the burden of illness [3]. In China, a social health insurance programme, the New Rural Cooperative Medical Scheme (NRCMS), was introduced in 2003.
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