The impacts of multiple healthcare reforms on catastrophic health spending for poor households in China

Abstract

Many developing nations witness systemic healthcare reforms where the expansion of health financing mechanisms and reforms of the service delivery system are being rolled out simultaneously. Yet, poorly coordinated reforms and negative interactions between multiple policies may offset synergies and undermine intended reform outcomes. This study examines how multiple healthcare reforms affect catastrophic health spending of low-income households in China. We characterize two broad types of health policy reforms: expansion- and constraint-oriented policies in the domains of financing, services delivery, and pharmaceuticals introduced since 2009. We adopt an innovative methodology by matching macro-level policy text data collected using big data techniques with micro-level health expenditure data drawn from a nationally representative survey. Employing a linear probability analysis and controlling for household and year fixed effects, we find that more expansion-oriented policies, especially in the domain of financing, increased the incidence of catastrophic health spending of poor households. In contrast, constraint-oriented policies, particularly in the domain of health services delivery, lead to a lower incidence of catastrophic health spending. This type of policy is thus better able to mitigate the positive relationship between expansion-oriented policies and the incidence of catastrophic health spending. This study suggests that while the expansion of benefit package in the domain of financing is indeed a decisive move towards universal health coverage, the essential financial protection of the poor cannot be achieved without strong and coordinated supply-side reforms towards cost containment. Health policy makers must take a strategic view of the complex interactions of multiple policy interventions in both financing and service delivery domains.