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WHOrtCO/MESD.20
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Dlatributton: Umltod
“ Macroeconom ics,
Health and
Development” Series
The reform of the rural
cooperative medical
system in the People’s
Republic of China
Initial design and interim experience
P.R. China
I
7
Technical paper
World Health Organization
Geneva, May 1996
_ __
-•
/ 2-8S f
Other titles in the "Macroeconomic, Health and Development" Series are :
N° 1:
Macroeconomic Evolution and the Health Sector: Guinea, Country Paper - WHO/ICO/MESD.1
N° 2:
Une methodologie pour le calcul des couts des soins de santd et leur recouvrement: Document technique,
Guinee - WH0/IC0/MESD.2
N° 3:
Debt for Health Swaps:
WH0/IC0/MESD.3
N° 4:
Macroeconomic Adjustment and Health: A survey: Technical Paper - WHO/ICO/MESD.4
N° 5:
La place de I'aide exterieure dans le secteur medical au Tchad: Etude de pays, Tchad
N° 6:
L'influence de la participation financiere des populations sur la demande de soins de sante: Une aide a la
reflexion pour les pays les plus demunis: Principes directeurs - WH0/IC0/MESD.6
N°7:
Planning and Implementing Health Insurance in Developing countries: Guidelines and Case Studies: Guiding
Principles - WHO/ICO/MESD.7
N° 8:
macroeconomic Changes in the Health Sector in Guinea-Bissau: Country Paper - WH0/IC0/MESD.8
N° 9:
Macroeconomic Development and the Health Sector in Malawi: Country Paper - WHO/ICO/MESD.9
N°10:
El ajuste macroeconomico y sus repercusiones en el sector de la salud de Bolivia: Documento de pais
WHO/ICO/MESD.10
N° 11:
The macroeconomy and Health Sector Financing in Nepal: A medium-term perspective: Nepal, Country
Paper- WHO/ICO/MESD.11
N°12:
Towards a Framework for Health Insurance Development in Hai Phong, Viet Nam:
WHO/ICO/MESD.12
N° 13:
Guide pour la conduite d'un processus de Table ronde sectorielle sur la sante: Principes directeurs WHO/ICO/MESD.13
N° 14:
The public health sector in Mozambique: A post-war strategy for rehabilitation and sustained development:
Country paper - WHO/ICO/MESD.14
N°15:
La sante dans les pays de la zone franc face a la devaluation du franc CFA - WHO/ICO/MESD.15 (document
no longer available)
N° 16:
Poverty and health in developing countries: Technical Paper - WHO/ICO/MESD.16
N° 17:
Gasto nacional y financiamiento del sector salud en Bolivia: Documento de pais - WHO/ICO/MESD.17
N° 18:
Exploring the health impact of economic growth, poverty reduction and public health expenditure Technical paper - WHO/ICO/MESD.18
N° 19:
A community health insurance scheme
Philippines - Technical paper - WHO/IC
A source of additional finance for the health system:
Technical Paper
WHO/ICO/MESD.5
Technical Paper
4
’rated project.
V
SOCHARA
Community Health
Library and Information Centre (CLIC)
Csntre for Public Health and Equity
No. 27, 1st Floor, 6th Cross, 1st Main,
1st Block, Koramangala, Bengaluru - 34
Tel : 080 - 41280009
email: clic@sochara.org / cphe@sochara.org
www.sochara.org
The reform of the rural
cooperative medical
system in the
People’s Republic of
China
Initial design and interim
experience
by
Guy Carrin and Aviva Ron
Division ofIntensified Cooperation
with Countries,
World Health Organization,
Geneva
Wang SC, Li Xuesheng and Yu Jun
Department ofMedical Administration,
Ministry ofHealth, P.R. China
Yang Hui, Zhang Tuo Hong, Zhang Li Cheng,
Zhang Shuo
Training Centre for Health Management,
Beijing Medical University
Ye Yide
X
Training Centrefor Health Personnel,
Anhui Medical University
*
5. SIMULATION OF ADJUSTMENTS IN THE RCMS: THE CASE OF QIDONG
COUNTY..................................................................................................... 31
5.1 The purpose of simulation ..............................................................................
5.2 Qidong County: the initial RCMS design ....................................................
5.3 Simulation of adjustments in the RCMS of Qidong County........................
5.3.1 Lowering the co-payment rates ......................................................
5.3.2 Increasing government contributions and farmer contributions ...
5.4 Caveats ............................................................................................................
31
31
38
38
38
38
6. PERSPECTIVES FOR CONTINUED DEVELOPMENT............................
. . 42
6.1 Reflections for adjustment in RCMS implementation.....................
. . 42
6.1.1 Definition of beneficiaries..................................................
. . 42
6.1.2 Level of contributions and pooling...................................
. . 42
6.1.3 Benefits ..............................................................................
. . 43
6.1.4 Management: registration and information system .........
. . 44
6.1.5 Provider payment .............................................................
. . 44
6.2 Linkage with RCMS Project objectives: development of legislation
. . 45
7. CONCLUSIONS
46
BIBLIOGRAPHY
. 47
TABLES
Table 1 Selection of pilot counties
Table 2 RCMS population coverage by township...................................
Table 3 Inputs for the simulation analysis of the initial RCMS design .
18
28
33
FIGURES
Figure 1 Structure of health insurance contributions - based on the initial RCMS design of
Qidong County............................................................................................
36
Figure 2 Simulated revenue and expenditure of the RCMS- based on the initial RCMS design
of Qidong County)...........................................................................
37
Figure 3 Structure of health insurance contributions - simulated adjusted RCMS design,
Qidong County............................................................................................
40
Figure 4 Simulated revenue and expenditure of the RCMS- simulated adjusted RCMS design,
Qidong County................................................................................
41
ANNEX
50
Table Al Members of interviewed families, and average income per capita in 1993 . . 50
Table A2 Average household income, average health care expenses and the share of health
care expenses in family income, 1993 ........................
51
Table A3 Average health care expenses for outpatient services (per case) ................ 52
Table A4 Average health care expenses for chronic diseases (per case)....................... 53
Table A5 Average health care expenses related to emergency services (per case) .... 54
Table A6 Average health care expenses related to inpatient services (per admission) . 55
Table A7 Non-use of publicly provided health services and causes............................... 56
Table A8 The four most important advantages of RCMS, cited by interviewees......... 57
Table A9 The five most important disadvantages of RCMS, cited by interviewees . . . 58
Table A10 Structure of health insurance contributions (Based on the initial RCMS design of
Qidong County).............................................
60
Table All Revenue and expenditure of the RCMS (Based on the initial RCMS design of
Qidong County) ................................................................................................... 61
Table A12 Structure of health insurance contributions (Simulated adjusted RCMS design,
Qidong County) ................................................................................................... 62
Table A13 Revenue and expenditure of the RCMS (Simulated adjusted RCMS design, Qidong
County) ................................................................................................................. 63
Figure Al Average income per capita, 1993 ........................................
Figure A2 Distribution of household income in Qidong County, 1993
Figure A3 Household income and health care expenditure, 1993 .........
Figure A4 Share of health care expenditure in household income, 1993
Figure A5 Non-users of publicly provided health services.....................
Figure A6 Causes of non-use of publicly provided health services . . . .
64
65
66
67
68
69
INTRODUCTION
At the end of the seventies, China boasted a cooperative medical system that was in
place in about 95% of villages. This system involved community participation and cost
sharing, and enabled access to basic health care to farmers. However, a break in this system
occurred as the result of widespread market economic reforms. These reforms basically
involved a shift from a communal to a household production system. As a result the
collective way of financing rural health care was more or less abandoned and, by 1993, only
10% of villages remained covered by a cooperative medical system.
However, the Government of the P.R. of China remained aware of the need to arrange
for some form of social protection against health care expenses, so that access to care could
be secured. In March 1994, it initiated a RCMS Project to reestablish the rural cooperative
medical system (RCMS). This Project is implemented on a pilot basis in 14 counties of 7
provinces. The present paper gives an overview of this Project, its results and its experience
obtained from March 1994 until September 1995.
In section 1, we give an overview of the economy and the health sector in China. An
emphasis is put on the need for a new RCMS policy, especially in view of the urban-rural
disparity. The RCMS project, and especially its workplan, is summarized in section 2. The
initial stage of this workplan comprised the organization of household surveys in the 14 pilot
counties. Selected results are presented in section 3, especially concerning average income
and health care expenses, and causes of non-use of publicly provided health care.
In section 4, we provide information on the implementation of the RCMS. There is
substantial variation among the counties, and significant scope for adjustments in the design
of RCMS. To illustrate possible adjustments, we analyze and simulate changes in the RCMS
of Qidong County in section 5. A summary of the development of RCMS and future
perspectives is given in section 6, whereas we conclude in section 7.
1
1. THE ECONOMY AND THE HEALTH CARE SYSTEM IN CHINA: A BRIEF
OVERVIEW
1.1 Some salient features of the economy
1.1.1 Labour force
In 1994, China had a population of 1,198.5 million, and the average annual population
growth rate in the period 1985-1994 was 1.4 %1. The population is distributed over 30
provinces, 2,116 counties, 55,800 townships and 134,331 villages. The urban population has
grown substantially since the 1960s. In 1960, the share of the urban population in the total
population was 19%. This share reached 28% by 1992, and is expected to increase further
to 35% by the year 2000. The growth rate of the urban population is also supposed to exceed
the overall population growth rate, namely 2.7% between 1992 and 2000.
In 1992, the labour force accounted for 50.2% of the total population. Its growth rate
has been 1.7% in the period 1985-19932. The labour force is predominantly active in the
agricultural sector, with 58.6% of the total labour force in this sector. The women’s share
in the adult labour force is 43 % in 1994 3.
1.1.2 Level, growth and distribution of the Gross Domestic Product
Gross Domestic Product (GDP) per capita in 1992 was 2,767 Yuan or US$ 4704.
Note that the latter US$ figure is computed using an average of official and market exchange
rates, however5. As the latter figure does not adequately reflect the real purchasing power of
the population, it is worthwhile to state the GDP per capita figure in purchasing-power-parity
(PPP) terms, namely 1,950 US$ in 19926.
Through economic reforms, the Chinese economy is one of the most vibrant
economies in the Asian region. These reforms started in the early eighties and comprised
mainly the establishment of a household responsibility system7, liberalization of agricultural
prices, and liberal policies towards enterprises, trade and foreign direct investment. The
reform speeded up growth. For instance, in agriculture, grain production increased by 5 %
i
Ministry of Public Health (1994,p.l42) and UN (1995, p.299).
2
World Bank (1994b, p.197).
3
UNDP (1995, Table 11, p.176).
4
World Bank (1994a, p.ix).
5
Note that before January 1, 1994 China had a ’'double-track” exchange system.
6
UNDP (1995, Table 12, p.178).
7 This system gave more production autonomy to farmer, and better access to markets and
enhanced opportunities for local and regional trade; see Rozelle and Boisvert (1995,p.234).
2
from 1979 through 1984. And the annual growth rate of real GDP per capita was 8.3 %
between 1985 and 1994. The forecasted rate of growth of real GDP for 1995 is 10 %8.
The economic growth of the past decade has contributed to a significant reduction of
poverty. Before the economic reforms, absolute poverty9 was prevalent among 270 million
Chinese. The economic changes are estimated to have raised 170 million people above the
absolute poverty level. Despite these improvements, it is important to notice that there are
still significant differences in terms of consumption and income between urban and rural
areas. The average rural consumption per capita in China is less than one third of the average
of all urban areas10. In terms of GDP per capita, differences are notable, on the one hand,
between China’s South coast11 and East Coast12 and, on the other hand, China’s East
Interior13 and West Interior14. In the South coast and East Coast, GDP per capita is US$
810 and US$ 780, respectively. However in the East Interior and West Interior, GDP per
capita is US$ 310 and US$ 290, respectively 15. Important socio-economic differences in
China currently contribute to the phenomenon of a rural migrant population to China’s cities
between 40 and 80 million.
It is estimated that the percentage of poor amounts to 10.9 % of the population16.
Other indicators reflect the extent of poverty; for instance the lowest 40% of the households
can only command 17.4% of total income. Inequality is illustrated by the fact that the ratio
of the highest 20% income earners to the lowest 20% income earners is 6.517. In such an
economic environment, it would be important to ensure that the rural population does not stay
behind in terms of health improvement. Mechanisms are needed to guarantee access to basic
health services to the population, irrespective of the economic status of regions and provinces.
Without such mechanisms, a welfare gap between the poor and the better-off population will
persist.
8 UN (1995, p.301).
9 UNDP (1994, p.223) defines the absolute poverty line as that income or expenditure
below which a minimum nutritionally adequate diet plus essential non-food requirements are
not affordable.
10
World Bank (1994a, p.38).
11 Guandong province.
12
Shanghai, and the provinces of Jiangsu and Zhejiang.
13
Henan Province, Anhui Province and Jiangxi Province.
14
Sichuan Province and Guizhou Province.
15
World Bank (1994a, p.39).
16
World Bank (1994b, p.107).
17 UNDP (1995, Table 12, p. 178).
3
1.1.3 Government finance
Public finance has undergone major changes since the economic reform. First, accounts
of state-owned enterprises and government have been gradually separated. This has resulted
in a decline of the shares of government revenues and expenditures in GDP. In 1989, the
shares of government revenues and expenditures in GDP amounted to 20.4% and 22.7%,
respectively. However, by 1993 these shares had declined to 15.4% and 17.5%, respectively.
Especially the decline in the revenue share reflects the difficulty of government in mobilizing
revenues. Fiscal decentralization is one of the major causes of this problem. In fact, local
governments gained a substantial control of China’s taxation policy. This process of
decentralization has stimulated local governments’ interest in economic development18.
However, quite a number of local governments seem to have been overzealous by granting
illegal exemptions on taxes that should in principle have been shared with central
government19. In doing so, local governments wanted to stimulate economic activity in their
region. It is estimated that the loss due to such tax exemptions was the equivalent of 1.5 to
2% of GDP in 199320.
Being aware of the public finance problems, the Third Plenum of the 14th Congress
of the Communist Party of China, held in 1993, stressed among others the need for fiscal
reform. The latter encompasses three areas: (i) the broadening of the tax base and the
simplification of the value-added tax structure; (ii) restructuring of the enterprise and personal
income tax; (iii) a new structure for intergovernmental fiscal relations and the establishment
of a National Tax Service (NTS). Especially the NTS should give the central government
renewed power related to budgetary revenues.
In general, an increase in tax revenues is warranted to make sure that Government can
properly finance its tasks related to socio-economic development. There is certainly the
question of a proper mix between public finance and private sector expenditure for social
goods such as health. It is reported that for 1993, the total health expenditure in China was
3.61% of GDP. The latter corresponds to health expenditure per capita of 96 Yuan. The
major part of health expenditure comes from non-government sources: 34% and 35% from
total health expenditure were financed by enterprises and by private households, respectively.
Government financing only accounted for 22% of total expenditures21. The latter percentage
is also cited for China’s poor areas22. It follows that Government spends about 21 Yuan or
18 Yusuf (1994, p.75).
19 Many provincial governments have also been increasingly using revenue from extrabudgetary sources, in order to avoid sharing of taxes with the central government. See Yusuf
(1994, p.84).
20 World Bank (1994c, pp.ix-x).
21
Du Lexun et al. (1995) and World Bank (1995, p.61).
22 Han Leiya et al. (1995).
4
US$ 3.6 for health care 23 on a per capita basis. The latter amount is quite modest, certainly
in view of the continuing demand for basic health services. There is also an increasing
demand for health services of better quality and greater sophistication among a better-off
population. A major question is to what extent Government should respond to and co-finance
these demands. In view of an emerging private sector, it should investigate which new
legislation is required concerning health services provision and financing. Some of the
answers to these questions will obviously depend on Government’s desire to continue to play
a role in advancing health for the population in general and, specifically, in the safeguarding
of access to care among the most needy.
1.1.4 Declining state ownership
An important feature of the economic change in China is the decline of the dominance
of state-owned production, in favour of the growth of collective and private ownership. State
enterprises are the property of the whole country. In contrast, collective enterprises are
controlled by local governments. There are urban as well as rural collectives. Quite a
number are managed by township and village governments, whence the term "township and
village enterprises" (TVE)24. Note that in 1978, 78% and 22% of industrial production was
owned by the state and collectives, respectively. However, in 1992, these percentages were
48% and 38%25 for state and collective enterprises, respectively. New ownership also
developed: private and foreign enterprises came to occupy a share of 12% in the total of
enterprises.
One of the main differences between the collective enterprises and the state-owned
enterprises is that the former can no longer rely on a banking system that readily provides
credits or prints money in order to cover losses. Collective enterprises have to be run like
private enterprise in any market economy: they are responsible for losses, but they can also
keep the profits if they arise26.
The TVE have become a crucial factor in the development of the local economies.
In fact, the profits of TVE can be retained and spent on further investments27. The TVE’s
activities create additional employment. A part of the revenues of TVE can also be spent on
social services such as health care and education. Islam and Hehui (1995) report that in 1992
about 33% of TVE profits were used to finance social expenditure. TVE tend to be quite
prevalent in the more advanced and peri-urban regions. For instance, in 1988, half of all
township and village-level output was produced in three provinces (Jiangsu, Zhejiang and
23
The average official exchange rate (FEC) in 1993 was 5.762 Yuan per US$.
24
Naughton (1994, p.266).
25 This percentage is divided in turn into 11% ownership by urban collectives and 27%
by rural collectives; see Naughton (1994,p.267).
26 Perkins (1994, p.37).
27
Rozelle and Boisvert (1995, p.236).
5
Shandong) that have only 17 % of China’s population. Expansion of the TVE as an
institution in rural areas would certainly be welcome, of course as a means to generate
income, but also as a way to muster more resources for health.
1.1.5 The inflation problem
China is currently turning a centrally planned economy into a market-based economy.
This transition has been accompanied by important problems of inflation. For people with
relatively fixed incomes, inflation can result in major cuts of purchasing power and, hence,
jeopardizes their current well-being.
In the late eighties, inflation reached double-digit levels; it was 16.3 and 20.8 % in
1989 and 1990, respectively. This was due to a large extent to a credit policy, whereby bank
loans are granted abundantly. There was indeed a fear that restrictive credit policies would
exacerbate unemployment, especially among the population still active in loss-making state
enterprises.
Efforts, however, are undertaken by the Chinese government to rein in inflation.
Interest rates were raised, credit ceilings were established and the financing of certain non
productive investments was banned. Despite these adjustments in credit policies, a high level
of inflation was observed in 1994, namely 24 %. Tighter credit policies imposed at the start
of 1994 led to problems with availability of working capital, especially in state-owned
enterprises, and to rising unemployment and/or non-payment of salaries. As a result, the
Government relaxed its credit policy as of March 1994.
In 1994, several other factors contributed to the high inflation rate: increases in wages
of civil servants, bad weather entailing drought, and therefore resulting higher food prices.
There was also the unification of the exchange rate mechanism in January 1, 199428 which
implied a 33 % devaluation of the official exchange rate; the latter devaluation is likely to
have fueled inflation. However, it is observed that a number of the causes of the inflation
problem are structural as well. There is a steady demand of investment that is hampered by
the availability of capital goods. In addition, the increasing integration of China into the
world economy is accompanied by inflow of foreign exchange that makes a strict control of
the domestic money supply difficult29. In 1995, inflation is expected to have been reduced
to 15%, however.
28 Before that time, there was a double-track system. There was one official exchange
rate (EEC) at which foreign investors and tourists, and Chinese foreign trade enterprises
needed to convert their currencies. The other track comprised a '’market” exchange rate, used
for the selling of retained foreign exchange by enterprises and individuals and for imports that
were not covered by the official foreign exchange allocations. See UN (1995, p.92).
29 UN (1995, p.92).
6
1.2 The health care system
1.2.1 The health care delivery system
In the 40 years following the establishment of the People’s Republic of China,
significant improvements in health status were achieved. By 1990, life expectancy had
doubled, from 35 to 69 years. During this period, overall mortality dropped from 25 to 6.6
per 1,000 population, while infant mortality declined from 200 to 35 per 1,000 live births30.
These achievements were in no small part the result of improvements in social
conditions and health services. Through a 5-year cycle planning process directed by the State
Council (China’s executive branch), the development of health services at every level of
government was accelerated. As a first step, the "barefoot doctor" concept was heavily
promoted through paramedical training, and urban doctors were sent to rural areas. The
county health bureaus were given responsibility for the implementation of national policy in
their constituencies. The major thrust of China’s active health policy in rural areas after 1949
was a community-oriented primary health care approach.
A three-tiered approach was followed, defining the provision of services and referrals
at village, township and county level. Average county size is now one million population.
Each county has around 25 townships, each with 14 villages with 1,000 population on
average. At village level, a clinic or village health clinic staffed by village doctors (formerly
barefoot doctors), provides basic preventive services, maternal and child health care and
curative primary care to village residents.
At township level, a health centre with in-patient beds provides basic diagnostic,
medical and surgical services. The health centre is staffed by assistant doctors, with two
years of medical education after high school. A separate township facility provides family
planning services.
The county hospital serves as the highest rural referral service, and provides a fairly
full range of medical and surgical services. The diagnostic services in many county hospitals
now include high technology imaging equipment, such as computerized tomography. County
hospitals are staffed by college graduate physicians and provide training for township and
village health workers. In addition, each county usually has a traditional medicine hospital,
with training facilities. By 1990, every county had at least one hospital, 88 % of the
townships had a health centre and 87% of villages had a clinic.
In recent years, however, there appears to be some stagnation in the improvement of
health status, and gaps between urban and rural, and higher and lower income groups are
becoming wider; see further section 1.2.4. Economic reforms indirectly led to the dismantling
of the rural cooperative medical system. Many workers were disenfranchised from public
service and labour insurance systems with the shift towards privatization and increasing
unemployment. Where underemployment was prevalent previously, market economy now
transforms this into formal unemployment. The aging of the population constitutes an
30 Leiyu Shi (1993).
7
increasing problem, particularly as many of the aged are unprotected by the former financing
mechanisms. With the collapse of the RCMS, the traditional approach of relying on family
and savings for medical expenses was challenged by the rising costs of health care, inflation,
migration of children to urban areas as well as the real decrease in the number of children to
support aged parents.
1.2.2 The health care financing system
The financing mechanisms for health care in China differ significantly among
population groups. The major sub-systems are31:
The public service medical care32 , which meant free of charge health care
for government workers at all levels of government (central, provincial, county,
township and village), officials of labour unions, youth and women’s leagues,
the staff of cultural, educational, health and research institutes and students at
approved colleges and universities. The government is solely responsible for
the financing of this system. In all cases, workers and retired members are
covered but family members are not included. This arrangement is based on
the State Council regulations of 1952, termed "Implementing Rules of Free
Medical Service for State Personnel". Around 30 million individuals were
estimated to be covered by this system in 1995.
(i)
Recently the State Council has implemented a reform, on a pilot basis, in two
cities: Zhenjiang City of Jiangsu Province and Jinjiang City of Jiangxi
Province. These pilot systems constitute a fund with contributions from
government as well as individual government workers. The fund comprises
"individual accounts", a "cooperative account" and a "high risk fund". In case
of illness, the worker’s individual account would be used first, to finance the
medical care expenses. Should the individual account become empty, the
cooperative account will be used, but subject this time to co-payments from the
patient. Finally, for high-risk illnesses entailing important expenses, the high
risk account would be used. In the meantime, this system appears to be
introduced in other cities and districts as well.
The labour insurance medical care33, set up as part of the labour insurance
system as a social security measure enacted by the State Council in 1951,
termed "Rules of Labour Insurance in the People’s Republic of China". The
system established to protect workers’ health in industrial and mining
enterprises, railways, post and telecommunications authorities.
The
(ii)
31
For an overview, see also Gu and Tang (1995).
32 Sometimes this is called the "free medical care" system (Yu,1991,p.l5) or "government
insurance system".
33 Also called the "labour protection medical care" system (Yu,1991,p.l5) or "labour
insurance" system.
8
contributions to a merged "enterprise staff welfare fund" come from enterprise
income, and has been set at 5.5 percent of this net income in 1957. In 1969
the Ministry of Finance stipulated that half of the fund would be allotted to
health care. In 1995, it was estimated that 140 million workers and 60 million
family members were covered by this mechanism. Family members are
entitled to half the reimbursement allowed for workers. The system has been
extended to workers of private enterprises, within the social security
framework under the responsibility of the Ministry of Labour. However, TVE
are generally not covered by this system.
Note that the system of the three types of accounts introduced in the pilot
schemes for government workers, has also recently been incorporated in new
pilot schemes for labour insurance.
(iii)
The rural cooperative medical system (RCMS), in areas designated as "rural"
described in detail below.
(iv)
The health insurance system for students, essentially covering the inpatient care
of students in primary and secondary schools and institutions of higher
education. This system is more prevalent in urban areas.
(v)
The systematic health insurance system, which is an annual prepayment for a
package of mandatory services including immunization for children, family
planning and post-natal care. In some provinces, the parents pay an amount
for each child, which covers a full course of immunization, and reimbursement
of treatment costs for any of the target diseases, up to the age of seven years.
There are serious gaps in population coverage resulting from the current classifications.
For example, workers in enterprises in rural areas are not covered by the social security
framework. As an increasing number of "farmers" are now finding full-time or part-time
work in local village and township enterprises, the number of individuals in this category is
increasing. The present policy is to include this salaried population in the target population
for the rural cooperative medical systems.
Another gap results from the individual rather than family membership approach in
the first three sub-systems. The spouse may be covered in his or her own right by one of first
three sub-systems (as government worker, salaried enterprise worker or farmer) but coverage
is not extended or may be very limited for dependent children. In some areas, children in
school may be covered by the system for students, but this coverage is far from uniform
across the country. A similar lack of coverage may be found among the elderly, who are not
government pensioners and are not economically active.
9
1.2.3 RCMS Policy 1950-1993
The cooperative organization of rural health financing began in the early 1950’s,
through the initiatives of communes and brigades in rural areas34. During the 1960’s and
1970’s this method, which came to be termed "cooperative medical systems" (CMS) was
encouraged by the Government and the Communist Party. By the mid-1970’s, it was
estimated that 95% of China’s villages had a CMS, administered by the brigade and with the
village health clinic as the basic health care provider.
The growth of the village35 collective economy provided the basis for the
development of the CMS. CMS funds consisted of yearly contributions paid by participants,
and subsidies from collective welfare funds. Participants’ contributions amounted from 0.5%
to 2% of annual income. The management of welfare funds was supervised by village and
township . The share of subsidies from welfare funds in total CMS revenues varied from
30% to 90%, with an average of 50%37. Note that these welfare funds were made up of
contributions from villages that were in turn based on income from agriculture and enterprise
activities. The other contributors to the CMS were higher levels of Government. These
especially supported the financing of health workers’ income and the medical equipment38.
Concerning the use of CMS revenue, some variation in reimbursement procedure could be
observed: some exempted members from payment for services at village health stations and
township health centres, while others only reimbursed a proportion of costs incurred by the
members.
The CMS was voluntary and not mandated by government legislation or regulations.
In fact, in the years of rapid growth of the CMS no clear guidelines for the establishment and
operation were produced by central or provincial government, and problems of inadequate
funding and weak administration were common. Despite the voluntary nature and lack of
regulations, very few farmers refused to join. Most of those who were not members were
considered class enemies", that is, people who had been landlords or rich peasants prior to
liberalization, or members of counter-revolutionary parties.
By the end of the 1970’s, it was clear that the CMS were effective in health care
development in rural areas. They led to consolidation of rural health services, and enabled
access to basic care for peasants, regardless of their economic situation. Despite the
administrative and financial management weaknesses, the CMS provided a financial basis for
the operation of the health care facilities, in an atmosphere of community participation and
cost sharing for basic health care. As the system had become so widespread, in 1979, "Rural
34
See Tang Shen-Lan et al. (1994, p.10)
35
The term ’’brigade” was used before the 1980’s.
36
The term ’’commune" was used before the 1980’s.
37
Cheng and Liu (1995, p.2).
38
Liu et al. (1995, p.1086).
10
Cooperative Medical System Regulations" were drafted (by the Ministries of Public Health,
Finance and Agriculture) and the term "Rural" was added systematically; one now commonly
uses the term RCMS.
A major break in the development of the rural cooperative health systems occurred in
the early 1980’s, however. Several reasons can be highlighted. First, economic reform
virtually stopped all further advance of the CMS. The resulting shift from the collective
(village) to a household production system meant a significant drop in the original source of
revenue for the system. Government also reduced its financing of recurrent health care costs,
especially at the village and township level, expecting that user fees for health services would
increase39. The introduction of the market mechanism also contributed to a freeing of prices
in the medical sector. Prices of health services soared, and in many places RCMS revenues
could no longer cover costs. Secondly, in some cases, bankruptcy of RCMS schemes was due
to a significant degree of adverse selection40. Thirdly, the State Council did not promulgate
the drafted regulations just mentioned. Hence, a lack of regulations and weaknesses in
administrations was one of the roots of the breakdown. Fourthly, it also appears that the
political support to the RCMS schemes had declined41. In fact, many schemes had been
established during the Cultural Revolution period. As soon as the Communist Party dropped
its support for the revolution, many communities rejected CMS because of its association with
this political upheaval42. Generally, the collapse of the RCMS led to a decreased access to
preventive and curative care. The incidence of some infectious diseases was also reported to
increase43. In this respect, we cite that the incidence of typhoid and paratyphoid rose from
8.8 per 100,000 in 1974 to 14 per 100,000 in 1988. And the incidence of hepatitis A and B
increased from 74.2 per 100,000 in 1974 to 132 per 100,000 in 198844.
Remarkably, in some areas however, the adaptation of RCMS to recognize the
household as the major contributing unit (as opposed to the village or township welfare fund)
enabled continuation. In some other areas, particularly those with higher incomes, new forms
of RCMS were introduced, but the trend was hampered by regulations barring the introduction
of new levies by local government. By 1993, it was estimated that the RCMS covered only
10 percent of the rural population, or 100 million individuals, in only 4.8% of the villages45.
39 Liu et al. (1995,p. 1087).
40 Cheng and Liu (1995, p.5).
41 Gu and Tang (1995,p. 186).
42 Xueshan et al. (1995, p.llll).
43 Cheng and Liu (1995).
44 Liu et al. (1995, p.1090).
45 State Council (1994).
11
1.2.4 The urban-rural disparity
The achievements in health status reached over the past decades in China were
significant. By 1982 life expectancy and infant mortality per 1000 live births was 67.9 years
and 34.7, respectively. What is noteworthy, however, are the discrepancies between urban
and rural areas. For example, in 1987 life expectancy was 71.5 years in urban areas and 66.6
in rural areas. By that year, infant mortality had dropped to 20 in urban areas but could be
as high as 96.2 per 1,000 in the poorest rural areas46. The reasons for such disparity
between urban and rural areas are considered to be linked in part to the economic reforms and
the collapse of many RCMS schemes.
The health care financing mechanisms for government workers and state enterprises
covered only a small percentage of the rural population. The health insurance coverage for
enterprise workers within the social security framework was developed for urban areas, but
not applied in rural areas, despite the rapid growth of village and township enterprises in the
rural areas of many provinces.
Health facilities, particularly at village, township and county level, received a
decreasing share of funding from government (central and provincial) and from other
collective bodies. The upgrading and expansion of the health care facilities was not
accompanied by higher budgets from central or provincial government. On the contrary,
public expenditure on health care has been reduced since the economic reforms of the 1980’s.
The township and county hospitals were authorized to apply user charges and over time, the
revenue-generating potential of these facilities was increasingly recognized. With average
occupancy rates of around 44% in the early 1980s47, township health centres obviously had
room to generate demand.
The disintegration of RCMS meant that the barefoot doctors, who were the major
health care providers in the village health clinic (VHC) operated by the RCMS, were no
longer guaranteed an income through a regular salary. To generate their income, these
doctors were encouraged to apply user charges and many bought the VHCs to be operated
as private practices. It is presumed that after the breakdown of RCMS, more than 85 % of
the rural population came to rely on private practitioners48. By 1990, more than half of
VHC had been sold to individuals or were rented to private practitioners
In all but isolated cases, villagers were billed on a fee-for-service basis. Charges and
profits from the sale of drugs by the village doctor also became important sources of income.
46 Yu (1991, p.57).
47 Leiyu Shi (1993, p.726).
48 Yu (1992, p.34).
49 Xueshan et al. (1995,p.l 113).
12
Note that presently, 93% of rural residents pay out-of-pocket for medical care;
payments amounted to 21.3 Yuan per person in 199O50.
these
In parallel to this process, health care facilities were given high priority by local
government, particularly at the village, township and county levels. Rather than consolidation
of resources within a township, facilities were not only retained but enlarged and added at
each level. In this way, each village retained its VHC, and there was no merging of village
health clinics to serve the population of a cluster of villages. As the township and country
enterprises developed, new and larger hospitals with sophisticated medical equipment became
prime ways of using enterprise profits.
Rural populations were therefore faced not only with charges for primary health care
at the village level, but with substantial charges for hospital-based services. By the beginning
of the 1990’s, household out-of-pocket payment for health care was considered a major
contributing factor in rural poverty. For instance, a national household survey in 1988
showed that of patients in poor counties, 50% of the patients who were not treated were not
because of excessive health care costs. Furthermore, 25% of the rural population that needed
referral to a hospital was not admitted largely because of financial problems. Similar
evidence is from a 1987 study of rural health services in 20 counties in different regions of
the country. It was found that 23 % of ill people did not seek care in moderately poor
countries, compared to 16.5% in rich ones. The cost of care was cited as a common reason
for this behaviour. Hospital utilisation was also influenced by cost of care. Indeed, 45% of
people referred by a doctor in moderately poor counties did not receive hospital care, as
compared to 9% in rich counties; of those who were not admitted, 63% claimed this was due
to cost51. And, in a study among 60 poor families in Yuhan county of Zhejiang province,
47% declared that expensive medical care had been the most important cause of falling into
poverty52.
While on the one hand, the central government understood the impact of all these
trends, it was recognized that government had less influence on the planning and management
of health services at all levels, and even less influence on provider behaviour.
50 Gu and Tang (1995, p. 188).
51 Gu and Tang (1995,p. 188), Xueshan et al. (1995,p. 1113) and Gu, Bloom, Tang &
Lucas (1995).
52 Zhang (1991) cited in Gu and Tang (1995).
13
2. THE RCMS PROJECT 1994-1997
2.1 Political process to reestablish the RCMS
In recognition of the problems noted above, in 1993 the Government of the P.R. China
initiated a series of steps to improve access to health care in rural areas. The RCMS Project
was launched by the MOPH and the Research Centre of the State Council, to carry out
applied research, taking account of work carried out by the World Bank-sponsored "China
Network for Training and Research on Health Economics and Financing" and the results of
research supported by the International Health Policy Programme (IHPP). From the
beginning, the immediate objective of the RCMS Project was to design, implement and test
a number of health insurance schemes in several poor counties. An additional objective was
the enhancement of national capacity for the implementation of rural health insurance.
From the outset, the tendency in terms of policy was to reestablish the rural
cooperative medical systems, with the appropriate modifications to suit changes in economic
reforms, and this objective was designated as one of 10 priority projects of the State Council.
This approach was based on the positive historical experience of the RCMS in the past, but
also recognized the need to develop different RCMS models, rather than the "one model, one
standard" approach of the past.
An important first step was taken by the State Council in 1992 with a general study
of the feasibility of the reintroduction of RCMS. The latter was presented to the top Leaders
who agreed to pursue the reestablishment of RCMS. In an important paper, henceforth called
"State Council Report", the State Council outlined the objectives and overall process of
reestablishment of the RCMS in China53. This report was presented at a Workshop in
Beijing, in March 1994. The Workshop was attended by the State Council, Ministry of Public
Health, State Planning Commission, Ministry of Finance and Ministry of Agriculture.
Researchers from Beijing and Shanghai Medical Universities also attended the Workshop.
The World Health Organization (WHO) was invited to attend the Workshop to participate in
the discussions, give technical presentations on rural health insurance and to investigate its
role in technical assistance to the Project.
The following statements are quoted from the State Council Report as the critical
issues in adopting the policy to re-establish the RCMS:
(i)
The development of rural areas and improvement of farmers’ lives are correlated with
the farmers’ health situation. Without the RCMS, it will be difficult to develop the
rural economy and to improve farmers’ lives on a sustained basis.
(ii)
The access to primary medical care for farmers in backward economic areas needs to
be improved urgently. The purpose is to drastically reduce the problems of poverty
caused by disease and of disease caused by poverty.
53
State Council (1994).
14
(iii)
The development of RCMS is part of the promotion of social security. Farmers
should not loose significant amounts of money or assets (food, animals, etc.) just to
pay for medical expenses. A RCMS, supported by government, is a practical initiative
to tackle this issue.
The State Council Report suggested a goal of achieving reestablishment of the RCMS
in 40% of all villages by the end of the Eight five-year plan in 1995. The goal for the year
2000 was set at RCMS reestablishment in 70% of all villages.
While recognizing the need for variation in the new RCMS models, the State Council
Report included proposals for several basic principles, as quoted below:
(i)
(ii)
(iii)
(iv)
(v)
The RCMS is based on voluntary participation
The RCMS is a non-profit organization.
The RCMS should save resources; resources for health should be used properly so as
to reduce the burden of health care costs on farmers.
The RCMS should be adapted to the local economic situation. The financing should
be adapted to the local farmers’ incomes. Expenditure by the RCMS should depend
on its revenues.
The RCMS should improve the quality of services, and the scope of services should
be extended.
Again based on historical experience, the State Council Report noted that RCMS based
on legislation would be the optimal way to develop the rural health care system. However,
it was recognized that the drafting of legislation should follow a series of research
components, from basic household income and expenditure surveys, through planning and
implementation of RCMS models in a representative number of rural populations across the
country, to monitoring and evaluation of the role, financing, management and impact of the
various models. These statements in the State Council Report strengthened the concept of the
RCMS Project. Following the March 1994 Workshop, the scope of WHO technical and
financial support to the process was determined.
The State Council Report was then submitted to the Peoples’ Congress and the detailed
RCMS Project, taking into account the principles and guidelines of the State Council Report,
was then finalized within the context of government policy, to be carried out from 1994 to
1997. In July 1994, an official launching seminar was held in Shanghai, attended by the
Ministry of Public Health, State Council Research Centre, officials from the pilot provinces
and counties, and with technical support from WHO. The Project received high profile
coverage in the national press, reported in the China Daily on 21 July 1994 as "Rural Health
Programmes to Benefit all Farmers” by Zhu Baoxi.
2.2 Responsibility for the RCMS Project
The RCMS Project is managed by the Department of Medical Administration of the
Ministry of Health (MOH) of the P.R. of China and the State Council, supported by WHO.
A National Project Team has been designated, managed by the Director of the Division of
Primary Health Care, Department of Medical Administration, Dr Wang Shucheng. The
National Project Team is responsible for coordination with other departments in the MOH
15
regarding research and policy developments in related areas. In this way, coordination with
developments in the various World Bank projects is maintained.
While the MOH is responsible for the initial Project design and necessary amendments
over time, specific research functions have been assigned to academic institutions. The
Beijing Medical University and the Anhui Medical University are responsible for the training,
surveys and analysis in two groups of pilot counties. In that capacity, representatives of the
two Universities serve as full members of the National Project Team and attend all seminars
and workshops.
The Ministry of Finance, Ministry of Agriculture and the State Planning Commission
have agreed to participate in the evaluation stages. These authorities have also agreed to
provide funding for large-scale implementation of RCMS, following the demonstration of
satisfactory models through the Project.
Financing of the RCMS Project is shared between the Ministry of Public Health and
WHO, the latter being co-funded by the WHO Western Pacific Regional Office (WPRO) and
the Division of Intensified Cooperation with Countries (ICO) at WHO Headquarters.
WHO/ICO in turn received financial support for this project from the International
Development Research Centre in Ottawa, Canada.
WHO technical support includes assistance in the preparation of guidelines for the
surveys, participation in the workshops related to the design, implementation and monitoring
of the RCMS in the pilot counties, assistance in the development of evaluation tools and
training in aspects of health insurance and health economics. As the workshops are scheduled
to be held in different provinces, the WHO advisors have the opportunity to visit most of the
pilot counties over the Project period. The WHO advisors visit China for periods of 1 - 3
weeks 3 - 4 times a year for these purposes.
2.3 RCMS Project workplan
The RCMS Project follows a practical-implementation oriented strategy research for
the reestablishment of RCMS. It therefore has a series of stages, each with specific activities,
under the following headings:
Stage 1. Selection of Pilot Counties
1.1 Selection of counties at provincial level
Stage 2. Health Sector Review
2.1 Collection of data at county level
2.2 Drafting of health sector reviews
16
Stage 3. Surveys at County Level
3.1 Workshop on health insurance
3.2 Household surveys
3.3 Data analysis
Stage 4. Design of Pilot Systems
4.1 Workshop on system design
4.2 Workshops on system design at county level
Stage 5. Implementation of Pilot Systems
5.1 Management support at county level
5.2 Monitoring
5.3 Study Tours
Stage 6. Evaluation
6.1 Mid-term evaluation
6.2 Final evaluation
6.3 Preparation of evaluation report
Stage 7. Legislation
7.1 Workshop on health insurance legislation
7.2 Study tour
7.3 Drafting of legislation
Stage 8. Dissemination
8.1 National seminar
2.4 Workplan implementation to date
Since the official launching of the RCMS Project in July 1994, the planned activities
have been carried out, with only minor delays. The progress is summarized under the
Workplan heading.
Stage 1. Selection of Pilot Counties
1.1 Selection of counties at provincial level
We refer to Table 1 for an overview of the 14 pilot counties in 7 designated provinces.
Following selection of the provinces and Counties, three townships were selected for
the pilot RCMS in each county. While the same or a similar RCMS may be operating in
17
other townships in the pilot county, only the three townships are designated as part of the
pilot implementation and monitoring activities.
As information about the RCMS Project spreads, several counties in other provinces
with new or modified RCMS have expressed interest in participating in the Project activities.
Each request has been considered, and three counties now participate as "observers”
following the same guidelines for monitoring. These counties are Kaifung in Henan Province,
Nenping in Quangdong Province, and Jiading District near Shanghai. The RCMS in Lading
District is supported by the WHO Primary Health Care Collaborating Centre in Jiading.
Table 1
SELECTION OF PILOT COUNTIES
Province
Counties
Beijing
Fangshan, Pinggu
Jiangxu
Qidong, Xinghua
Zhejiang
Xiaoshan, Haining
Henan
Wuzhi, Xinmi
Hubei
Changyang, Wuxue
Ningxia
Yongning, Lingwu
Jiangxi
Yongxiu, Yihuang
Stage 2. Health Sector Review
2.1 Collection of data at county level
2.2 Drafting of health sector reviews
By mid-1994, each county prepared a report on county demographic and economic
factors and a basic health sector review. The reports did not follow a standard pattern, but
following presentation at the July 1994 Workshop, a good appraisal of the previous and
current extent of RCMS in each county was available, and the decisions on pilot townships
could be made. There appeared to be a mix of counties with townships with fairly stable
RCMS to townships in which the system had completely collapsed.
18
Stage 3. Surveys at County Level
3.1 Workshop on health insurance
The Workshop on the Principles of Health Insurance held in Shanghai in July 1994,
was attended by close to 70 participants. The 3 - 4 representatives from each of the 14
counties included the County Governor, at least one Township Mayor and the County or
Township Medical Officer. As this meeting coincided with the official launching of the
Project, the mix of participants reflected the high political importance of the RCMS Project.
The meeting was attended by representatives of the State Council and several members
of the above mentioned China Network, in addition to all members of the National Project
Team and WHO officials staff.
Technical inputs in the Workshop were first provided by WHO through a two-day
seminar on the principles of health insurance. This was followed by reports from studies on
the RCMS, given by senior professors from four medical universities involved in research on
rural health care financing: Beijing, Shanghai, Anhui and Su Zhou Medical Universities. The
most relevant research, the results of which were presented by Professor Gu Xing-Yuan, is
the collaborative programme of Shanghai Medical University and IHPP, and studies the
implementation of a RCMS model in very poor 3 counties in the mid-west of China.
All the Workshop participants visited several townships in nearby Jiading District, in
which RCMS have been modified to deal with the economic changes. In these RCMS, the
generally higher income townships contribute at a higher level and have better benefits, in
terms of type of health service and level of reimbursement. The visits were facilitated by the
WHO Primary Health Care Collaborating Centre in Jiading District, which has since taken
a role in enabling the Jiading experience to be added to the RCMS Project monitoring as an
’’observer” county.
The last part of the Workshop was used to explain the Project Workplan to all the
county representatives, and to train the county and township medical officers in the household
survey methodology.
3.2 Household surveys
The household surveys were carried out in the second half of 1994, after training at
the Workshop in Shanghai and according to the guidelines provided through a visit by groups
of the National Project Team, with the assistance of Beijing and Anhui Medical University
staff, which took responsibility for data collation and analysis in ten and four counties
respectively. The counties used medical students and sometimes health centre staff to carry
out the interviews.
By September 1994, the completed questionnaires were sent to the two universities,
and after preliminary analysis, the reports were sent back to the counties for use in RCMS
design by October. A workshop on data analysis was held early in November with the
support of two WHO consultants from the Korea Institute of Health Management (KIHM).
19
The results, following data collection and analysis by the teams from Beijing and
Anhui Medical Universities, were presented at a Workshop in Beijing in December 1994, in
which the WHO advisory team participated. Selected major findings from these surveys are
given in section 3 of this paper.
Stage 4. Design of Pilot Systems
4.1 Workshop on system design
4.2 Workshops on system design at county level
In November 1994, members of the National Project Team visited each county to run
a model design workshop, using the information collected in the health sector review and the
household survey as appropriate. This was followed by a Workshop on Model System Design
in Beijing in December 1994, for the representatives of all the counties, and in which the
WHO advisory team participated. Representatives of the State Council participated in the
opening session of this Workshop.
Stage 5. Implementation of Pilot Systems
By October 1995, 13 counties had established the model RCMS in 3 townships each,
with the exception of one country, which has 7 townships in its study. In 7 counties, the
same RCMS model design is applied in the 3 townships. In 2 counties, 2 of the 3 townships
have the same design, while one is different. In 5 counties, each of the three townships has
its own design.
Tongxian County left the RCMS Project and was replaced by Fangshan County in
Beijing Province. In Fangshan County and Pinggu County, a county government decision on
implementation is pending. Among the reasons given for the delay is the fact that many
residents have other forms of health insurance. As the county is close to Beijing
Municipality, a significant number of workers are covered through the labour social security
system or as public servants. The health insurance scheme for school children is also well
developed in that county.
5.1 Management support at county level
Several technical visits have been paid by the National Project Team to each of the
pilot counties. Contacts are then established with the responsible staff for RCMS at both
county and township level. Especially, training in computer applications for management is
provided at county level.
5.2 Monitoring
Each pilot county has an annual plan for implementation of RCMS. The National
Project Team and the WHO advisors then pay a technical visit to each county in order to
discuss any problems in implementing the plan, and to examine proposals for solving these.
20
6.
Evaluation
6.1 Mid-term evaluation
A mid-term evaluation seminar was organized in Yinchuan (Ningxia Province) for
responsible staff from the 14 participating counties. The purpose was to discuss any problems
related to RCMS implementation and to prepare an adjustment of original plans; for instance,
issues were discussed regarding the setting of contribution levels, collection of contributions,
definition of benefits, financial management, membership of different population categories
etc. As a background to these discussions, lectures were delivered by the National Project
Team and the WHO advisors on the principles of health insurance and RCMS, the linkage
between basic medical care and RCMS, international experiences in rural health insurance,
the financial aspects of rural health insurance, and health information systems.
Special forms for evaluating progress were also used, so as to check in a systematic
way whether counties follow the timing and the components of their plan. This information
was used by the National Project Team to, in turn, make a comparative analyis of the
performance of RCMS in the 14 counties.
2.5 Activities regarding RCMS legislation
From mid-1994 on, the main responsibility for advice on RCMS legislation was given
to the Department of Medical Administration of the MOH. Together with domestic experts,
this Department worked on a draft plan for the contents of the legislation. This draft plan
also took account of earlier inputs from the Department of Health Policy and Law of the
MOH.
In February 1995 the Department of Medical Administration organized a workshop
in Beijing about RCMS legislation. In this workshop two other MOH departments
(Department of Health Policy and Law, the Department of Health Finance and Planning), the
National Project Team., academic experts, and directors of county and provincial health
bureaus participated as well. During the workshop the draft plan was discussed. From
February to March 1995, the Department of Medical Administration supported by domestic
experts modified the draft plan based on the discussion of that workshop. In April 1995, in
the Annual National Meeting of Medical Administration, the Department of Medical
Administration presented the new version of the RCMS draft plan to the meeting. Based on
the discussion during that Meeting, the Department of Medical Administration again modified
the draft plan.
In the meantime, the Department of Medical Administration sent a document with the
plan for the contents of the legislation to the Minister of Health. At the end of 1995, this
plan was transmitted by the Minister of Health to the Legislation Bureau of the State Council.
21
3. RESULTS OF PREPARATORY HOUSEHOLD SURVEYS
3.1 Introduction
In September 1994, the 14 counties that are part of the ROMS project were involved
in a household survey about incomes and health expenditures54.
From each province, two counties were selected. And from each selected county, 3
townships were chosen. The provinces were designated in such a way that they represented
the most developed, the less well developed and the least developed parts55 of China. The
counties were chosen for their previous work in rural primary health care work, for the
presence of public health bureau staff interested in RCMS. In each county then, townships
were chosen so as to represent the different economic levels within the county. From each
townships, three villages were further selected. Finally, in each village 60 families were
randomly selected; we have therefore 540 interviewed families per county.
3.2
Average income in 1993
Income has to be understood here as cash income. In other words, the value of self
production of food or other income in kind is not included; neither is the value of the housing
services if the interviewed family is the owner of a house.
Figure Al56 reveals important income differences between counties in our sample.
This is illustrated, for instance, by the fact that the most well-off county, Xiaoshan of
Zhejiang Province, has an average income that is about 8 times as much as that of Yihuang
county of Jiangxi province. The relevant data are also presented in Table Al. Note, in
addition, that in their study on income inequality in China, Hussain et.al (1994) report on
widening inequalities between counties since the economic reform. They cite a number of
factors such as land quality, proximity to a city, and the possibility to engage in nonagricultural activities such as those in TVE.
Income inequality is also prevalent within counties. As an example, we study income
distribution in Qidong County. In Figure A2, the distribution of income is portrayed; on the
vertical axis one finds the cumulative percentages of the population ranked from the poorest
to the richest are on the horizontal axis, whereas the cumulative percentages of income
received by these population percentages are on the vertical axis. The straight line in the
54 The main results are published, in Chinese, in Ministry of Health (1995).
55 The provinces of Zhejiang, Jiansu and Beijing, the provinces of Hunan and Hubei, and
the provinces of Jiangxi and Ningxia represent the most developed, less well developed and
least developed parts of China.
56 Henceforth, the prefix ’’A” indicates that the figure or table can be found in the Annex.
22
middle of the figure is relevant in the case of complete equality57. The curve58 below this
straight line reflects an unequal income distribution. For instance, it can be verified that the
first 50% of the population in Qidong County, reveive less than 27% of total income. The
extent of employment in TVE among households is cited by Hussain et.al (1994) as one of
the contributing factors to income inequality in Jiangsu Province to which Qidong County
belongs.
An inequality indicator, the Gini-coefficient, was computed using the household
income data for Qidong. Its value is 0.3245 and therefore reveals some inequality 59. This
inequality may be underestimated, however, due to the fact that several consumption items
(self-consumption of food and housing) are not included in the income measure. Moreover,
the Gini-coefficient does not reveal adequately the gap between the poorest and the other
population groups. It is estimated, for Qidong, that the population group with the average
income in Qidong have a cash income that is about seven times as much as the poorest group.
And the richest population group has an income that is about 14 times as much as the poorest
category. It is this income disparity that provides one of the arguments for the development
of a health care system that ensures access to the low-income population.
3.3 Average health care expenses
In Table A2, we present the average health care expenses per family and per county.
The variation is large: from a minimum of 188.08 Yuan in Yongxiu to a maximum of 729.10
in Xiaoshan. For the two poorest counties (with an average income per capita of less than
100$), average health care expense per household is 261 Yuan. The latter finding is
confirmed by a study by Song (1995). This author found that, for 30 poor counties, average
personal health care expense per household was 269 Yuan 60 61.
57 In the case of complete equality, every percentage of the population earns an identical
percentage share of county income. The straight line in Figure 2 exactly portrays this
situation.
58
Also denoted as the ’’Lorenz curve".
59 Referring to Figure A2, it can be understood that the area between the curve and the
straight line is an indicator of inequality: the greater this area, the greater the inequality. The
Gini-coefficient measures the deviation from complete equality, by dividing this particular
area by the lower triangle’s area. The Gini-coefficient varies from 0 (complete equality) to
1 (complete inequality); see Sen (1973, ch.2).
60 These are 30 counties distributed among the 14 provinces in Northwest, Southwest and
Central China. The study is part of a wider project undertaken by the Chinese Network of
Health Economics, supported by UNICEF and the IHPP.
61 Gu Xing-Yuan and Yu Hao (1995) mention health care expenditures per capita for 3
poor counties: 13 Yuan in Shibing County, 25.7 Yuan in Donglan County and 60.2 Yuan in
Xunyi County. Assuming that family size is about 4 per family, the health care expenditures
per family would be 52 Yuan, 102.8 Yuan and 241 Yuan in the above mentioned counties,
23
Many factors are likely to intervene in the production of this variation. One
determinant which we are able to study further is the effect of the county’s income level on
health care expenditure. The simple hypothesis is that, as a county’s economic capacity
grows, its demand for health care grows as well. A higher income at county level also better
sustains a greater use of medical technology, especially so at the level of county or provincial
hospitals. In Figure A3, we present health care expenses of counties that are ranked
according to income (from low to high income). One clearly sees a pattern of positive
correlation between expenses and income62.
We can also study the share of health care expenditures in income. Figure A4
presents this share for the 10 counties ranked according to income level. The shares vary
between a minimum of 5.73% for Wuxue (ranked Sth according to income level) to a
maximum of 14.63% for Xinmi (ranked 4th according to income level). One can observe a
clear tendency towards an inverse relationship between the level of income and the share of
health care. In other words, the poorer63 the county, the higher the share of income that
families allocate to health. The latter illustrates that ROMS schemes have an important role
to play in the protection of families from the burden of high health care costs.
3.4 The structure of health care expenses
Four categories of health care are distinguished: outpatient services, medical services
for chronic disease patients, inpatient services and emergency services. Tables A3 to A6
present the average health care expenses related to these four categories, respectively. These
expenses are to be understood in the "gross" sense, before any form of reimbursement. In
most counties, some form of health insurance 64 already exists. Part of the interviewed
families may thus be insured, and receive some reimbursement. However, in general effective
reimbursement percentages are quite low and do not exceed 20%. Patient’s "net" expenses
do not deviate much from the gross expenses, and are therefore not discussed.
One notices that a distinction is made between different types of providers. There are
basically five possible types of providers: the private doctor, the village clinic, the township
health centre, the county hospital and the hospital at provincial level. Several remarks are in
order. First, the private doctor has become a part of the health care system. However, as yet,
the private doctor does not provide hospital services. Secondly, outpatient health care
expenses are larger when that type of care is given in township health centres and hospitals.
In turn, outpatient care in township hospitals is less costly than in county hospitals. Thirdly,
respectively.
62 The simple correlation between health care expense and income was found to be 0.679.
A cross-section least squares regression also reveals that the "income elasticity" of health
expense is 0.45. The latter means, for instance, that a 10% increase in income will tend to
increase demand for health care by 4.5% (=0.45 x 10%).
63 In terms of cash income.
64 See section 1.2.2 for an overview of health insurance mechanisms.
24
inpatient care is more expensive at provincial level than at township and county level.
Fourthly, regression analysis confirms that the level of cost of care is higher in the better-off
counties than in the poorer ones. The latter reflects a tendency for providers to enhance
inputs into medical care when the economic capacity of the county rises.
3.5 Non-use of publicly-provided health services
3.5.1 The level of non-use
The current discussion about the non-use of health services pertains to 12 of the 14
counties. Data were collected concerning the need for outpatient and inpatient health services,
and the subsequent use of these services. In Figure A5, we present the percentage of non
users of both health services combined in each of the 12 counties ranked according to income.
One can observe a tendency for the percentage of non-users to decrease with the level of
income. In the first four counties, the percentage of non-use varies between 15% and 30%.
In three of the five counties ranked with the higher incomes, this percentage is below 15%;
in the counties of Haining and Xiaoshan, this percentage is even lower than 10%65.
Note that the counties of Xinghua, Haining and Xiaoshan had some RCMS scheme
operating at the time of the study. The establishment of RCMS in these counties could have
contributed to a lower percentage of non-users as well66.
3.5.2 The causes of non-use
We distinguish 5 types of causes: (i) no money to pay for health services; (ii) other
sources for health care (including self-treatment and traditional medicine); (iii) the patient
thinks the disease is not serious and/or will recover spontaneously; (iv) no time to seek health
services; (v) other reasons.
Figure A6 depicts the results; detailed data are available in Table A7. One
immediately observes that in every county, there is a variety of causes of non-use. It is
interesting to note that in the 6 counties with the lowest incomes between 20% and 40% of
non-users cited lack of money was the main cause of non-use67. This cause is less important
65 For a subsample of 12 counties, the hypothesis of independence between income levels
and the extent of non-use could be rejected via a Chi-square test, at the 10% significance
level. Two categories of income (Y) were distinguished, namely Y < $150 and Y> $150.
For non-use (NU), two categories were selected as well, namely NU < 20% and NU > 20%.
66 For a subsample of 8 counties, the hypothesis of independence between the percentage
of non-use and the existence of RCMS in a county could be rejected via a Chi-square test at
the 5% significance level.
67 For a subsample of 11 counties, the hypothesis of independence between lack of money
and the level of income was rejected as well via a Chi-square test at the 5% significance
level. For a subsample of 8 counties, the hypothesis of independence between lack of money
and the existence of RCMS in a county could be accepted, however, at the 5% significance
25
in the other counties. Other causes merit equal attention, however. Consulting with "other"
providers of health care (including self-treatment), is a quite significant source for non-use
as well. Moreover, several ill people are deliberately non-users, because they think the
disease is not important or that they will recover without special care. Quite a number of ill
also invoke "no time" as a cause of non-use. This is especially the case of both the poorest
(Yihuang) and richest county (Xiaoshan).
3.5.3 Attitudes about the RCMS
In all counties, a form of RCMS was established before the onset of the economic
reform. In some counties, it was more or less disestablished during this reform. Other
counties continued to operate the RCMS, however. In any case, many people have a memory
about rural health insurance as an institution. This enabled them to voice opinions about
disadvantages and advantages of RCMS. In Tables A8 and A9, we present for each county,
the main advantages and disadvantages, respectively, that were cited most by the interviewees.
The advantage of RCMS cited by most counties is the convenience of having medical
services near people’s homes (column 1 in Table A8). The advantage of RCMS to provide
a mechanism for interfamily solidarity was also mentioned (column 3). Finally, the reduction
of the financial burden on the family or individual was cited as another major advantage of
the RCMS.
Among the disadvantages, one of the most frequently cited (column 1 of Table A9)
was the low reimbursement of RCMS systems. Of course, the mirror image of the latter
problem is the low revenue from contributions. The level of contributions may be so low that
it is difficult to insure against health care expense adequately. In three counties, the problem
of an inadequately endowed RCMS-fund (due to low contributions) is recognized (column 2).
The use of village leaders’ power to claim better services was also seen as a major
disadvantage (column 3). Overuse of medical care by patients68 was also cited in three
counties as a disadvantage. Five counties also mention the problem that the RCMS accounts
are not published regularly so that members remain ignorant about financial management
(column 5).
level.
68 Also called "moral hazard" in the health insurance literature.
26
4. INFORMATION FROM IMPLEMENTATION OF THE ROMS
4.1 Variation in county design
The variations in the ROMS design between counties is overshadowed by variations
within counties, by townships. Of the seven provinces, none have the same ROMS model in
all pilot townships of the two selected counties. Seven counties have designed the same
model for each of the three pilot townships. In the remaining counties, variations are found
by township, from minor variations in contribution amount to major variations in benefits,
population coverage and management. The major elements in the design and their variation
are described below.
4.2 Population coverage
By October 1995, the ROMS design within the framework of the Project had been
implemented in 13 of the 14 pilot Counties; see Table 2. The population coverage data
presented at the October 1995 Workshop on Implementation should be considered in the light
of two factors: first, the RCMS may have existed before the Project in a particular township,
and second, if new, the date of implementation may differ by several months across Counties.
The insured population includes farmers and enterprise workers registered in the specific rural
areas.
4.3 Management level
The level of RCMS Management shows less variation: 12 Counties have township
level management, while one has county level and one has village level management.
In most townships, the contribution collection function is carried out by village leaders
on a once a year basis. The funds are then transferred to the township level management.
The village leaders collect from farmers’ homes, according to a list of registered households,
at a time decided by the RCMS management and village leader. This essentially means that
those who did not choose or were unable to register at the time of collection may not have
an opportunity to do so until the collection time for the following year. This is a serious
drawback and reflects some incompatibility of the current RCMS operation to a voluntary
process. Registration tends to be based on the village list of farmers, and is therefore not
adapted to a household or family registration including all family members.
TVE and private enterprises transfer the contribution for workers directly to the RCMS
management. In some cases this is done on a monthly basis, but the payment from
enterprises may also be made on a semi-annual or annual basis. It appears, however, that
registration functions such as the issuing of registration cards is planned on a yearly basis,
at the same time each year.
In the initial design, the RCMS managements planned to spend from 1 - 6 % of their
revenue on administration, with 3 % given as the most common figure. In addition, 1.5 to
12% was budgeted as a reserve fund and 3 - 10% as a risk fund; the risk fund serves to
finance high cost illnesses. These allocations tended to be the same for the three townships
in each county, but not for the two counties in the same province. The three components 27
administration, reserve and risk - totalled 12 - 15%, leaving 85 - 87% for health care services
(curative as well as preventive).
Table 2
RCMS POPULATION COVERAGE BY TOWNSHIP
Province
Beijing
Jiangxu
Zhejiang
Henan
Hubei
Ningxia
Jiangxi
County
Percentage of
population covered
Fangshan
not implemented
Pinggu
not implemented
Qidong
68-85
Xinghua
38-61
Haining
32-54
Xiaoshan
67-91
Xinmi
31-64
Wuzhi
100
Wuxue
100
Changyang
94
Yongning
76-100
Lingwu
80
Yongxiu
83-90
Yihuang
not reported
28
4.4 Contributions to the RCMS
The sources of RCMS revenues are the contributions from farmers, those from village,
township or county government, and workers’ contributions. All schemes have individual
farmer contributions. The lowest contribution is 5 Yuan per farmer per year, whereas the
highest is 20 Yuan. There is some tendency for individual contributions to be higher, the
higher the income level in the county. Government contributions, at all levels, vary between
1 and 4 Yuan. Low individual farmer contributions are not necessarily compensated by high
government contributions however. In ten counties, the RCMS schemes receive subsidies
from township and village government. Three schemes receive grants from county
government. Only two schemes receive subsidies from all levels of government.
In eleven counties, TVE are present. Employers and/or workers from these enterprises
contribute to the RCMS, either via a percentage contribution on workers’ income or via a flat
contribution. In about half of these counties, contributions derive from applying a percentage
on workers’ income; this percentage varies from 3 to 5 % of income. In several counties,
employers and workers share half of the total contributions. In some other, only the
enterprise may be responsible for paying the contribution. Again, there seems to be no link
between the level of these contributions and the level of economic development.
A remark is in order about the extent to which contributions are pooled into one
RCMS fund. In most townships contributions are grouped into one RCMS account.
However, in eight townships, separate accounts for farmers and workers have been
established. One of the possible explanations for this behaviour might be that the limits of
financial solidarity between workers and farmers have been trespassed. The latter can happen
when the average worker’s contribution far exceeds the average farmer’s contribution. The
absence of willingness to pool funds is exacerbated when workers judge that farmers’
declared income is far below their real income and that, therefore, their capacity to pay
RCMS contributions is underestimated.
4.5 Benefits and reimbursement structure
In all counties, the health insurance benefits are stated as reimbursement levels for the
various types of services. In most counties, enterprise worker reimbursement levels are higher
than for farmers, reflecting the higher contribution rates.
Most (12 of the 14) counties have some village level benefits, covering consultations
and/or drugs, at a low reimbursement level of 20% of the charge or as a fixed amount (such
as exemption from charges up to 1 or 2 Yuan). Effectively, it would appear that a patient
would still have to pay about 80% of the village health clinic charge for a single event or
contact.
Variation in benefits for township and county level out-patient and in-patient care is
very wide. In some townships, only consultations and operations are covered, in other drugs
and diagnostic services for out-patients and in-patients are also partially reimbursed. Most
RCMS have fixed different levels of reimbursement for the various types of services, and for
different levels of charge, from a low 20% to a high 70%. For example, 20% may be
reimbursed for in-patient care , but excluding drugs, up to a ceiling of 1,000 Yuan, and then
29
30% may be reimbursed above that amount to the next ceiling, usually with a specific
maximum total reimbursement per admission or per person per year. Drugs may have a
different rate, and even specific types of X-rays may have different reimbursement rates. This
reimbursement as a benefit is complicated and probably not easily understood by the insured
person.
To make a general appraisal of reimbursement level, it would appear that effective
reimbursement for services provided in township, county and higher level facilities is around
30% of the total charge. Some RCMS models use the risk fund for very high charges for the
very seriously ill patients. In most cases, the patient has to pay the full charge and then seek
reimbursement from the RCMS office, usually located in the township health centre. The
reimbursement is made once a month, and only once every quarter in one county.
4.6 Provider payment arrangements
At village level, there seem to be basically two types of service contracts for village
health doctors. One arrangement is whereby all of the earnings of the village health doctor
is based on consultation fees as well as a percentage of the drug fees. The second contract
is a combination of a fixed salary plus a percentage of drug fees. In some counties,
pharmaceutical companies pay a commission to the village health doctor based upon the value
of total prescriptions.
At higher levels of health services provision, doctors’ earnings seem to be mostly
based upon a contract stipulating a fixed salary, and an allocation based on a fraction of
hospital fee revenues. It is likely that in many instances doctors also benefit from a special
allowance paid to them (or paid indirectly via the health centre or the hospital) by
pharmaceutical companies.
4.7 Information system
A personal computer (8 MB internal memory, 190 MB hard disk, 33 Mhz) with printer
has been set-up in the health bureau of every pilot county. Training in the database program
FOXPRO has been provided to selected persons of the health bureaus. These have been
assigned to responsibility to put in data concerning the development of ROMS in their county.
Generally the database has two main components. First, a basic infonnation
component, and secondly, the diagnosis and expenditure component. The basic information
component contains at least the following items: township and village number, registration
number, name, sex and age of the patients, the name of the head of the family, and the
contribution. The latter is entered both for farmers and workers.
Input of data concerning diagnosis of illnesses of members, and the resulting total cost,
depends on the information returned by the RCMS management committees to the county
health bureaus. Generally, counties still have to start this component, as they only acquired
the computers recently and started by entering the basic information data. This second
component will be particularly valuable for the monitoring of quality of health care at all
levels, as well as about any differences in diagnostic and prescription behaviour between
providers.
30
5. SIMULATION OF ADJUSTMENTS IN THE ROMS: THE CASE OF QIDONG COUNTY
5.1 The purpose of simulation
From the previous section, it is clear that the RCMS schemes in the 14 pilot counties
are in an initial stage of development. In view of the objective of improving access to health
care among the population, several characteristics are likely to be modified in the future.
First, the structure of reimbursement rates as well as of contributions from the various
partners (government, enterprises, individuals or families themselves) may have to be
adjusted. For instance, overall contributions may have to be increased in order to insure a
higher reimbursement and thus a better protection. In doing so, a greater participation from
government may be warranted. Secondly, targets may have to be set concerning the level of
health care costs at the various echelons of the health system, in order to contain costs. This
cost-containment may have a favourable (downward) effect on the required contribution
levels. Thirdly, the public health bureaus who are responsible for the RCMS may want to
set targets regarding the structure of health service utilization. For instance, utilisation of
hospital care may have to be lowered in favour of an increase in outpatient and preventive
care.
Many policy changes may thus be have to be considered. A simulation model that
represents well the structure of RCMS and is able to study adequately the above mentioned
aspects, will prove to be quite useful to RCMS management. Various alternative
combinations of measures and policy changes can be simulated, and results can be obtained
very rapidly. In this chapter, we demonstrate how the WHO/ICO Health Insurance Simulation
Model can be used to study alternative policies; we apply it to the situation of Qidong
County, only69.
5.2 Qidong County: the initial RCMS design
At the occasion of the mid-term evaluation Seminar of the RCMS project in October
1995, Qidong County announced that the current coverage rate, for the three pilot townships
combined, of farmers as well as the self-employed and industrial workers was 73.7% and
95.8%, respectively. The yearly contribution for industrial workers is 3 to 4% of their
income, whereas the other population groups (farmers and children) pay a flat premium of
18 to 20 Yuan per person per year. Village government contributes 2 Yuan per farmer and
child to the RCMS revenue fund. Management of RCMS is at township level. In all but one
township, the contributions from workers and farmers are pooled. Membership in RCMS is
also arranged on an individual rather than on a family basis. Data for 1995 on health care
utilization and health care costs, as well as on reimbursement rates, were also provided by the
RCMS management of Qidong County.
The simulation model will be used to analyze the financial implications of the RCMS
structure proposed in October 1995 and to produce forecasts for the period 1996-2000. In
Table 3, we present the parameters and data that served as input into this ’’baseline”
69 For a detailed overview of the structure of this simulation model, see Carrin, Murray
and Sergent (1993).
31
simulation. One observes that the basic features of the RCMS implemented in September
1995 are maintained. Note that, as far as contributions for farmers and children is concerned,
an average of 19 Yuan has been retained. Likewise, the percentage contribution for workers
has been set at 3.5%. Some additional characteristics are added for this baseline simulation,
however. First, health care costs as well as health insurance contributions are adjusted fully
for inflation throughout the simulation period. And, secondly, we assume that all
contributions, whether from workers, farmers or government, are pooled into one RCMS fund.
The simulated structure of health insurance contributions is depicted in Figure 1,
whereas revenue and expenditure of the RCMS scheme are depicted in Figure 2; the
corresponding data are also presented in Tables A10 and All.
We observe from Figure 2 that the RCMS in this baseline simulation is in financial
equilibrium70. The latter does certainly not mean, however, that the RCMS is an adequate
protection device against health care costs. In this initial design, the level of co-payments is
considerable, thus leaving sizeable charges to patients.
70 One may remark that there is some discrepancy between total expenditure and revenue
in Table A10. We tolerate a discrepancy of up to 0.4% of total revenue, however; it is
assumed that any loss is financed via reserves whereas any surplus is deposited into a reserve
fund.
32
Table 3
INPUTS FOR THE SIMULATION ANALYSIS OF THE INITIAL ROMS DESIGN
Inputs
Variables
1. Demography1
-total estimated population in 1996
-population growth rate
-percentage of dependents in the total population
87,914
1.4%
22.1%
2. Economic environment1
14%
- domestic inflation
3. Labour force and income1
- share in total adult population of the population of
. farmers
. industrial workers
. government workers
- average annual income in 1995 (Yuan)
. industrial workers
. government workers
- nominal income growth per population category
. industrial workers
. government workers
33
82.16%
14.12%
na2
4,150
na
14%
na
4. RCMS design 1
- government subsidy per farmer and child (Yuan)3
- health insurance contributions (as a % of income)
. industrial workers
. government workers
- health insurance contribution for children (Yuan)3
- health insurance contribution per farmer (Yuan) 3
- percentage of insured in the population of
. children
. farmers
. industrial workers
. government workers
2
3.5%
na
19
19
73.7%
73.7%
95.8%
na
5. Health care costs (in Yuan)
and co-payments (as a % of health care costs) 1,4
- outpatient care (acute); village health centre
- outpatient care (acute); township health centre
- outpatient care (acute); county hospital
- outpatient care (chronic); village health centre
- outpatient care (chronic); township health centre
- outpatient care (chronic); county hospital
- emergency care (village health centre)
- emergency care (township health centre)
- emergency care (county hospital)
- inpatient care (township health centre)
- inpatient care (county hospital)
9 (65%)
20 (65%)
20 (65%)
13 (65%)
89 (65%)
96 (65%)
15 (50%)
489 (50%)
600 (50%)
417 (50%)
1100 (50%)
6. Health service utilization (per person) 1
- outpatient care (acute); village health centre
- outpatient care (acute); township health centre
- outpatient care (acute); county hospital
- outpatient care (chronic); village health centre
- outpatient care (chronic); township health centre
- outpatient care (chronic); county hospital
- emergency care (village health centre)
- emergency care (township health centre)
- emergency care (county hospital)
- inpatient care (township health centre)
- inpatient care (county hospital)
34
0.7122
0.3561
0.3561
0.0878
0.0439
0.0439
0.0084
0.0042
0.0042
0.0439
0.0439
7. Targets for health care costs
unit costs per health
service, in constant
prices of 1996, remain
stable throughout 199620005
8. Targets for health services
health service utilization
rates remain constant
throughout 1996-2000
9. Other expenditure
The share of both
administrative
costs and reserves in
total
health insurance
expenditure is between
5% and 7% during the
period 1996-2000
- Administration
- Reserves
Notes:
i
2
3
4
5
Unless otherwise indicated, these input data are valid for the period 1966-2000.
na= not applicable
These flat contribution amounts are adjusted for inflation on a yearly basis.
The first and second figures in the adjacent columns refer to the health care cost and the
co-payment rates (in brackets) respectively.
These are adjusted for inflation in order to obtain unit costs in current prices.
35
FIGURE 1
Structure of Health
Insurance Contributions
the
Based on
initial RCMS design of Qidong County
300
250
200
I 150
100
50
0
1996
1997
Children
1998
Farmers
1999
Gov. subsidy
36
2000
Industrial workers
FIGURE 2
Simulated Revenue and Expenditure of the ROMS
Based on the initial RCMS design of Qidong County
5
4
3
s|
E
2
1
♦—
♦
1996
1997
♦
0
1998
1999
Total expenditure
Administrative expenditure
Reimbursements
Total revenue
37
2000
5.3 Simulation of adjustments in the RCMS of Qidong County
Below we discuss selected and important ways to adjust the management of the RCMS
in Qidong County. Two scenarios are discussed, whereby the second scenario incorporates
the hypotheses made in the first one. Only the results of the second scenario are presented
in greater detail.
5.3.1 Lowering the co-payment rates
In the present simulation, we concentrate on lowering the co-payment rates for health
services. We suppose that the co-payments for all outpatient care and emergency care will
be 50 %, whereas co-payment rates for inpatient care will reduce to 40%. It is hypothesized
that these would be effective as of 1996. The result is that important financial shortfalls arise,
namely around 24% of total RCMS revenue.
5.3.2 Increasing government contributions and farmer contributions
The greater degree of financial protection assumed in the previous scenario is only
feasible through the upward adjustment of health insurance contributions. Again, we assume
that the percentage contributions on the income of industrial and government workers can not
be increased. This means we can only turn to farmers and government for higher
contributions.
Let us assume that henceforth, apart from the village government, the township as well
as the county government contribute 2 Yuan per farmer and child in 1996; note that these
contributions would again be adjusted for inflation for future years. Despite this increase, the
RCMS would remain in financial disequilibrium. An increase of farmer contributions is again
used as a way to balance the RCMS budget.
The adjusted structure of health insurance contributions and of the total revenue and
expenditure of the RCMS scheme is depicted in Figures 3 and 4, respectively. The data are
also presented in Tables A12 and A13. One notices that the farmers’ contributions are
certainly higher than in the original baseline scenario. However, it is important to point out
that these contributions are still below the average expected health care cost incurred by
patients and reimbursed by the RCMS. In other words, a financial solidarity between
government, industrial and government workers, on the one hand, and farmers, on the other,
still exists.
5.4 Caveats
Above we have studied two adjustments to the initial design of the RCMS scheme.
These adjustments basically concerned a greater degree of risk-sharing. Of course, RCMS
policy does not have to be restricted to these particular adjustments. We stress that there is
no intrinsic truth in the alternative simulation analysis that we performed. Much more
discussion will be necessary about various aspects of the development of the RCMS. The
simulation tool used here can surely be of assistance in this task. However, the actual use
of this tool needs to be preceded by a thorough deliberation by RCMS management on the
future course of rural health insurance.
38
We do suggest some points for further discussion and analysis, however. First, is it
not essential to exempt the poorest families from paying contributions ? To what extent will
the levels of the contributions of the contributing members have to be adjusted, in order to
finance these exemptions ? Or is it feasible that county, provincial or central government
would increase their contributions so as to secure membership of the poor ?
Secondly, how will the administration of the RCMS be planned in the future ? Is
management at county level feasible ? If yes, is it possible to realize economies of scale,
thereby decreasing the share of administrative costs in RCMS expenditure ?
Thirdly, it will be worthwhile to examine the structure of health service costs. Do
these reflect an adequate delivery of services, or is it possible that they are the result of
overconsumption and/or supplier-induced demand ? The latter question needs certainly to be
examined in view of other authors’ findings on health care cost levels. For instance, Hsiao
(1995) and Gu and Hao (1995) report fees for outpatient services in poor rural areas that are
much lower, namely between 50% and 60% of those recorded in Qidong County.
Fourthly, it would be useful to study the morbidity structure per population group.
Can major differences be observed between groups ? As long as RCMS is voluntary, it would
indeed be useful to examine major differences across population groups. Such a study could
possibly alert policy makers to adverse selection.
Finally, integration of preventive services into the RCMS and the subsequent impact
on the structure of health insurance contributions as well as on total revenue and expenditure
of the RCMS could be studied.
39
FIGURE 3
Structure of Health Insurance Contributions
Simulated adjusted RCMS design, Qidong County
300
250
200
! 150
100
50
0
1996
Children
ztz
ztz
-A-
1997
199»
1999
Gov. subsidy
Farmer!
40
2000
Industrial workers
FIGURE 4
Simulated Revenue and Expenditure of the RCMS
Simulated adjusted RCMS design, Qidong County
6
5
4
§ 2
zJ 2 3
E
2
1
—♦—
♦
♦
1997
1998
1999
0
1996
Total expenditure
Administrative expenditure
Reimbursements
Total revenue
41
2000
6. PERSPECTIVES FOR CONTINUED DEVELOPMENT
6.1 Reflections for adjustment in RCMS implementation
6.1.1 Definition of beneficiaries
The economic development in rural areas is of such a nature that new professions have
arisen, such as that of worker in a TVE, that of a self-employed small businessman, possibly
with a modest number of worker-employees, or that of a self-employed craftsman. These
may all be residents in rural areas, yet they can hardly be qualified as a farmer. In addition,
in several townships, migrant workers are present that either perform odd jobs or are hired
as full-time workmen such as construction workers.
It would be beneficial to RCMS development if a terminology could be developed that
better reflects the real professional activities undertaken. The latter is important because the
RCMS management needs to establish the benefits and contributions for each professional
category. Generally, contributions by workers tend to exceed those of farmers; one often
invokes that the worker’s earnings exceed those of farmers and that therefore their capacity
to pay for RCMS is larger. It would be logical therefore that, for instance, an employee in
a small business is indeed registered as a worker and not as a farmer. Likewise, a selfemployed businessman is in principle not to be registered as a farmer. Contributions for those
self-employed could be set such that they reflect the purchasing power of this particular
population group.
Increasing attention will also have to paid to the group of migrant workers. Their
contributions will have to be tailored to their standard of living. It should also be studied to
which extent the length of their presence in a particular county should play a role in benefit
and contribution setting.
6.1.2 Level of contributions and pooling
(i)
Generally one could envisage to increase contribution levels for both workers, farmers
and others in several counties. From the household surveys, one learned that a main cause
for negative attitudes towards RCMS was the low benefit level. Higher benefits are thus
warranted to attract more members, but these in turn would require higher contributions. It
is granted that it would be easier to increase contributions in counties with a relatively high
income level. A special effort will also be needed to assess the income levels of the farmers
and other self-employed. For instance, in several counties, it is said that farmers earn more
than presently assumed. An increased contribution for farmers could therefore be examined.
In most pilot counties, village, township and county governments contribute to the
financing of RCMS. Again the question arises to which extent these contributions could
increase. Perhaps a reexamination of local public finance with respect to this issue could be
encouraged. Such an increase could contribute to financing an increase in benefits for the
population as a whole. But it could also be used to provide funding for the care of the
uninsured poor: one possibility, for instance, is that additional government funds are used to
purchase RCMS membership for the poorest. Finally, the possibilities for provincial and
central government to co-finance the development of RCMS could also be explored.
42
(ii)
Pooling of risks and contributions is an essential ingredient of social health
insurance71. Presently, in several counties, the RCMS keep separate accounts for farmers
and workers. The latter limits risk-sharing, of course. It is said that enterprises and their
workers are reluctant to have funds pooled. Perhaps one of the reasons is that workers
speculate that farmers have higher incomes and, hence, that they should contribute more.
If immediate and total pooling proves to be unacceptable, a special contract between
RCMS management and the various professional groups can be established: this contract
(valid for, say, 2 to 3 years) would stipulate how the degree of pooling could be gradually
increased, and how the various contribution and benefit levels would be adjusted over the
given time period.
6.1.3 Benefits
It would further the link between the RCMS and health development on the whole,
if one were to define first the types of benefits, and, subsequently the reimbursement (or co
payment) structure72. In general, one would recommend a total or large reimbursement (zero
or small co-payment) for preventive services, in view of their benefits at the individual and
society level. Primary curative services also merit the highest reimbursement (lowest co
payment) rate possible. Not only would it stimulate access to basic care. But good primary
care services can also reduce the need for more costly hospitalization.
It can be examined how one could include all necessary components of treatment of
illness, whether at the outpatient or inpatient level. In this sense, there is no important
justification to exclude coverage of drug costs from the benefits. Fear of abuse from the
patient’s and provider’s side may explain several exclusions from benefits. In this case,
however, incentives to change patient and provider behaviour may be need to be established.
The RCMS management could organize or co-finance health education about the correct use
of drugs or certain types of unwarranted treatment. RCMS management can also help in
adjusting provider behaviour. For instance, it can inquire into contracts whereby income is
no longer linked to the volume of drug prescription.
In general the reimbursement (co-payment) levels need to be increased (decreased) in
the RCMS pilot schemes, in order to raise the attractiveness of health insurance. Moreover,
the reimbursement (co-payment) structure can be simplified, towards a limitation of the
number of different reimbursement (co-payment) percentages and of the different types of
health care services to which they apply. The latter will simplify RCMS administration and
lower administrative costs. It will also increase the understanding of the RCMS members and
patients.
71 For a thorough overview of the principles of social health insurance, see Normand and
Weber (1994).
72 Alternatively the co-payment structure could be defined.
43
6.1.4 Management: registration and information system
The RCMS management committees are advised to reflect upon a more open
registration policy. Currently, several RCMS schemes limit their registration to one or two
specific times during the year. Of course, potential members that are keen to join outside
these registration periods need to wait to get registered. In order to improve the attractiveness
of RCMS, one may think of a policy where registration is possible in any week of the year,
possibly several times during the week. Registration can also be encouraged by the use of
a marketing approach. Promotion in various ways, for instance via newspapers, leaflets,
television or radio-announcements could be considered. In other words RCMS could be seen
more by its managers as a business, but one with not-for-profit objectives. One of its prime
objectives is to improve access to care among all population groups. Therefore, it is all the
better when modem marketing techniques are used, if they help to achieve this objective.
RCMS management can also strive to become an effective user of the RCMS data
information system. The latter should be conceived as an active tool to improve the
membership, the monitoring of health services utilisation and provider behaviour, and the
financial analysis of revenues and expenditures. Regarding membership, the information
system can serve to indicate occurrence of adverse selection, as it can produce the age
distribution of RCMS members. The data on health services allow one to study the relative
importance of outpatient vs. inpatient services, or that of services provided at the village level
versus those provided at higher health service levels. They also make it possible to monitor
provider behaviour, as soon as diagnosis, treatment and resulting health care expense are
entered on a patient-by-patient basis.
6.15 Provider payment
Above it was indicated that most provider contracts provide powerful incentives to
prescribe, as earnings of health personnel at all levels are linked to drug consumption. This
permanently establishes the risk of overprescription. Whereas the latter may have a negative
impact on health, it also unnecessarily increases the payments of patients. It is understandable
that an attempt to reduce these negative effects by strongly reducing the link between provider
contracts and drug prescription is likely to be met with some resistance from providers. At
township and county level, incomes are also related to fees for other services, such as
laboratory services, X-rays and surgery. Again certain excessive treatment or surgery may
be found. Hence, from a health standpoint, it is advised to monitor such services and
examine their rationale.
The question is which types of contracts could be compatible with a greater rationality
in medical treatment, while at the same time be acceptable to providers. RCMS management
could explore various types of contracts in the future, whereby health personnel is assured of
acquiring an adequate income level. One is to make a contract containing a fixed but
improved salary. Alternatively, a contract could determine that income is linked uniquely to
the provision of a package of health services to members; in other words providers could be
paid on a capitation basis. A third contract could contain a fixed salary component plus a
capitation amount. Finally, it could also be stipulated that the savings from a more rational
approach to prescription, diagnostic treatment, medical treatment and surgery will be partially
shared with health personnel.
44
6.2 Linkage with RCMS Project objectives: development of legislation
The RCMS Project has been able to considerably influence the activities that prepare
final legislation:
(i)
Health insurance management methods are proposed for inclusion in the legislation.
The following issues are addressed: general organisation and coverage, the information
system (including monitoring and evaluation), contribution collection, pooling funds and cost
sharing, benefit package and reimbursement matters, cost-containment and patient referral
between village, township and county.
(ii)
Considerable attention has been paid to the voluntary vs. compulsory character of the
RCMS. At the same time, this has led to the issue of the degree of pooling of contributions
within the RCMS. The National Project Team has consistently advocated the need for
pooling of resources, at least in the long run. In addition, the appeal of a system covering
all of the population has been highlighted.
(iii)
In the previous period of RCMS, the level of management has been the village. The
RCMS Project has argued instead that a minimum of population coverage is necessary for the
spreading of risks to succeed. Hence, a management at township level, and preferably at
county level, has been advocated.
(iv)
Currently, preventive services are financed via channels other than RCMS; they may
involve the payment of contributions by households. The integration of curative and
preventive services has been promoted as a further goal for the RCMS, however.
It has been made clear that RCMS is not independent from the Government’s plan to
(v)
establish social security in rural areas.
As said above in section 2.5, the Legislation Bureau of the State Council received a
draft plan for legislation from the MOH. The MOH plans to organize a further meeting,
however, during the first half of 1996. The participants in this meeting will be the State
Council and Ministry of Agriculture, Ministry of Finance and the National Planning
Committee. The purpose is prepare a new draft plan. The MOH intends to produce a final
draft before the end of this year to the State Council. After approval, the State Council then
publishes the Legislation.
45
7. CONCLUSIONS
The nature of the RCMS Project needs to be well understood. It involves research,
through various methodologies such as household surveys, collection and analysis of health
care expenditure across 14 counties in 7 provinces. The process studied is the implementation
of the RCMS, which has taken on different levels of importance across the counties and in
the selected pilot townships in these counties. Although all rural counties, the population
structure by occupation and income varies. The strength of this Project is in its intervention
input and continuity in following progress.
There is now more systematic thinking about the management of RCMS, through
workshops and discussions where ideas can be exchanged. A concrete interim ouput is that
each county has had to define its model, write the details of the scheme and in fact develop
a programme at county and particularly township level. It should be recalled that the lack
of written plans and regulation was given as one of the factors which facilitated the collapse
of the RCMS.
46
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49
ANNEX
Table Al
Members of interviewed families, and average income per capita in 1993
County
Members of
interviewed
families
Average income
per capita in 1993
in Yuan
in USS1
Tongxian
1327
1913.28
239
Pinggu
1922
1625.60
203
Xinghua
1895
1710.58
214
Qidong
1369
2025.27
253
Xiaoshan
1994
4868.49
609
Haining
2112
2650.87
331
Yongxiu
2136
917.23
115
Yihuang
2204
607.46
76
Yongning
2361
827.23
103
Lingwu
2517
964.46
121
Xinmi
2204
887.80
111
Wuzhi
2278
767.94
96
Changyang
1983
984.21
123
Wuxue
2280
1249.19
156
1 The exchange rate used was 8 Yuan
1 USD (World Bank, 1994b)
50
Table A2
Average household income, average health care expenses and the share of health care expenses in
family income, 1993
Average household
income
Average health
care expenses
Share of health care
expenses in
household income
(in %)
Tongxian
6134.94
342.09
7.64
Pinggu
5785.93
444.74
10.86
Xinghua
6036.41
333.99
9.89
Qidong
5134.44
280.19
10.19
Xiaoshan
17878.10
729.10
7.81
Raining
10387.09
411.59
5.80
Yongxiu
3634.88
188.08
6.37
Yihuang
2479.35
211.94
11.76
Yongning
3657.49
412.73
13.66
Lingwu
4495.46
561.37
12.12
Xinmi
3622.24
529.98
14.63
Wuzhi
3240.69
309.90
9.56
Changyang
3612.06
280.00
7.75
Wuxue
5271.57
302.05
5.73
County
51
Table A3
Average health care expenses for outpatient services (per case)
Provider
County
Private doctor
Village clinic
Township
health centre
County
hospital
Tongxian
16.50
10.65
80.15
167.50
Pinggu
39.00
7.12
33.92
72.50
Xinghua
22.96
15.49
67.43
85.42
Qidong
15.22
9.06
108.02
20.00
Xiaoshan
16.44
24.49
65.39
ns
Haining
ns
17.82
36.35
57.14
Yongxiu
10.68
12.93
30.20
58.87
Yihuang
13.93
10.47
13.04
120.91
Yongning
18.56
11.97
26.12
33.83
Lingwu
32.84
14.58
22.11
92.04
Xinmi
13.23
11.58
41.31
171.06
Wuzhi
34.94
11.55
44.02
57.32
Changyang
28.71
24.59
44.70
na
Lingwu
22.15
26.13
61.83
167.11
Note: ns = no services administered
52
Table A4
Average health care expenses for chronic diseases (per case)
Provider
County
Private doctor
Village clinic
Township
health centre
County
hospital
Tongxian
43.33
59.52
142.70
296.52
Pinggu
18.00
27.33
85.62
279.15
Xinghua
89.00
17.82
131.20
90.06
Qidong
24.84
12.68
88.82
95.51
Xiaoshan
32.07
46.56
92.97
450.93
Raining
168.75
35.92
87.08
82.54
Yongxiu
24.90
55.26
137.06
57.94
Yihuang
25.83
20.64
41.98
49.06
Yongning
49.50
62.84
56.29
279.32
Lingwu
43.75
28.32
47.42
149.36
Xinmi
173.90
115.62
335.41
599.00
Wuzhi
138.57
106.84
145.65
172.56
Changyang
28.75
101.46
165.13
234.78
Wuxue
800.00
88.12
144.18
380.00
53
Table A5
Average health care expenses related to emergency services (per case)
County
Provider
Private doctor
Village clinic
Township
health centre
County
hospital
Tongxian
ns
10.80
54.94
70.00
Pinggu
ns
25.00
250.00
412.45
Xinghua
ns
19.91
73.19
140.00
Qidong
ns
15.48
489.31
600.00
Xiaoshan
ns
500.00
638.75
3240.19
Raining
ns
8.33
157.57
220.25
Yongxiu
15.35
48.15
82.23
116.11
Yihuang
20.55
10.96
21.56
62.94
Yongning
ns
269.00
216.67
701.67
Lingwu
ns
ns
ns
308.70
Xinmi
20.40
15.27
362.09
62.50
Wuzhi
146.67
100.00
941.67
2257.14
Changyang
800.00
15.00
572.96
1900.00
ns
187.31
393.98
977.62
Wuxue
Note: ns means "no services" administered
54
Table A6
Average health care expenses related to inpatient services (per admission)
Provider
County
Township
health centre
County
hospital
Provincial
hospital
Tongxian
200.09
893.75
1685.71
Pinggu
819.57
713.59
4357.14
Xinghua
574.41
988.89
2395.85
Qidong
417.13
1100.00
479.00
Xiaoshan
811.23
4920.85
2000.00
Haining
440.11
981.02
4728.62
Yongxiu
157.43
800.00
114.58
Yihuang
91.43
339.33
395.37
Yongning
215.00
399.00
2033.63
Lingwu
540.00
592.50
1150.56
Xinmi
556.52
1350.80
990.00
Wuzhi
ns
1750.00
1500.00
Changyang
381.64
280.00
566.67
Wuxue
122.86
446.67
ns
Note: ns means "no services" administered
55
Table A7
Non-use of publicly provided health services and causes
County
Percentage
of non-use
Causes of non-use
Other
reasons
No time
Not
serious
Other
sources
No
money
Yihuang
19
23
21
27
30
0
Wuzhi
21
9
41
43
1
6
Yongning
na
Xinmi
23
34
42
18
1
5
Yongxiu
28
37
21
18
10
15
Lingwu
na
Changyang
22
36
5
42
5
12
Wuxue
14
35
21
23
2
20
Pinggu
19
10
33
28
5
23
Xinghua
13
20
20
35
9
17
Tongxian
27
5
64
18
13
0
Qidong
22
16
51
19
7
7
Haining
8
Xiaoshan
5
34
18
7
na
na
na
14
28
Note: na= not available yet
56
Table A8
The four most important advantages of RCMS, cited by interviewees
Advantages
County
Convenience to use
medical services
near to where
people live
Ensures every
farmer access to
basic medical
service
(1)
Provides the
opportunity to help
each other (to
spread the financial
risk among the
population)
To lighten the
financial burden
of the family or
the individual
(3)
(4)
(2)
Yihuang
70.7
Wuzhi
13.2
Yongning
42.0
37.1
na
Xinmi
Yongxiu
26.3
40.1
Lingwu
Changyang
25.6
41.4
28.6
25.4
na
40.8
22.1
Wuxue
Pinggu
20.0
32.8
48.9
Xinghua
55.2
19.3
60.7
41.7
32.4
25.7
40.0
Tongxian
33.3
Qidong
30.4
20.6
52.6
Haining
57.2
28.7
42.8
Xiaoshan
68.0
17.6
57
38.8
Table A9
The five most important disadvantages of RCMS, cited by interviewees
Disadvantages
County
The reimbursement
is too low to solve
the financial
burden problem
The RCMS fund is
not well endowed,
so RCMS may
’’run at spring and
break down in the
fall”
The leaders of the
village used their
power to get more
chance to get better
services and better
medicine
RCMS
members tend
to overuse
medical
services, and
waste medicine
because services
and medicines
are cheaper
(1)
(2)
(3)
(4)
Yihuang
42.8
Wuzhi
8
Yongning
31.5
22.0
10.6
na
Xinmi
Yongxiu
25.4
34.3
Lingwu
5
19.6
21.9
30.6
na
Changyang
29.1
14.3
Wuxue
66.9
30.2
Pinggu
10.6
23.7
Xinghua
17.1
11.5
Tongxian
45.2
25.6
Qidong
63.1
8.0
Haining
76.3
Xiaoshan
47.6
10.7
58
37.2
35.7
Table A9 (continued)
County
Disadvantages
The RCMS accounts are
not published regularly, so
farmer do not know the
RCMS financial
management status and do
not have a chance to
monitor
(5)
Yihuang
Wuzhi
Yongning
Xinmi
Yongxiu
Lingwu
Changyang
16.1
Wuxue
19.1
Pinggu
Xinghua
16.9
Tongxian
Qidong
5.4
Haining
Xiaoshan
10.3
59
Table A10
Structure of health insurance contributions
(Based on the initial RCMS design of Qidong County)
in Yuan
Health insurance
contributions per
year per person
Years
1996
1997
1998
1999
2000
Industrial workers1
145
166
189
215
245
Farmers
19
22
25
28
32
Children
19
22
25
28
32
Government
subsidy2
2
2.3
2.6
3
3.4
(village level)
Notes:
1 These amounts correspond to 3.5% of projected yearly income.
2 Government subsidy per farmer and per child
60
Table All
Revenue and expenditure of the RCMS
(Based on the initial RCMS design of Qidong County)
in million Yuan
Expenditure and
Revenue
Total expenditure
of which...
- administrative
expenditure
- reimbursements
Years
1996
1997
1998
1999
2000
2.565
2.962
3.421
3.951
4.563
0.165
2.400
0.188
2.774
0.214
3.206
0.244
3.707
0.279
4.285
2.557
2.956
3.417
3.950
4.566
Total revenue
of which...
- premiums
- government
subsidies
2.406
2.781
3.214
3.716
4.295
0.151
0.175
0.202
0.234
0.270
Memorandum
item:
Reimbursement
amount per
insured (Yuan)
37
42
48
55
62
61
Table A12
Structure of health insurance contributions
(Simulated adjusted RCMS design, Qidong County)
in Yuan
Health insurance
contributions per
year per person
Years
1996
1997
1998
1999
2000
Industrial workers1
145
166
189
215
245
Farmers
25
29
32
37
42
Children
25
29
32
37
42
Government
subsidy2
6
6.8
7.8
8.9
10.1
(village, township
and county)
Notes:
1 These amounts correspond to 3.5% of projected yearly income.
2 Government subsidy per farmer and per child
62
Table Al3
Revenue and expenditure of the RCMS
(Simulated adjusted RCMS design, Qidong County)
in million Yuan
Years
Expenditure and
Revenue
1996
1997
1998
1999
2000
Total expenditure
of which...
- administrative
expenditure
- reimbursements
3.174
3.667
4.236
4.893
5.652
0.165
3.009
0.188
3.479
0.214
4.021
0.244
4.649
0.279
5.373
Total revenue
of which...
- premiums
- government
subsidies
3.194
3.693
4.269
4.934
5.704
2.740
3.168
3.662
4.233
4.893
0.454
0.525
0.607
0.702
0.811
Memorandum
item:
Reimbursement
amount per
insured (Yuan)
46
53
60
69
78
63
Average income per capita
1993
6
in US$
---------700
5
600
in thousand Yuan
1-
4
500
400
3
300
o\
2
1
0
yih
wuz yongn xinm yongx
lin
chan
llll
wux
pin
county
Yuan
Figure Al
ZZ us$
xing
tong
200
id
sd
100
0
qid
hai
xiao
Distribution of household income
in Qidong County, 1993
Cumulative % of income
O''
Uh
0
Figure A2
0.1
0.2
0.3
0.4
0.5
0.6
0.7
Cumulative % of population
0.8
0.9
1
Household income and
health care expenditure, 1993
Thousands of Yuan
Yuan
800
600
400
200
Q ------------------------- I------------------------- 1------------ 1------------1------------------------- 1-------------------------------------- 1_________
yih
wuz yongn xinm yongx
lin
chan
wux
pin
xing
tong
county
household income
Figure A3
health care exp.
qid
hai
0
Share of health care expenditure in
household income, 1993
Thousands of Yuan
20-------------------------
Percent
0.16
0.14
15
0.12
0.1
10
0.08
0.06
*
K-
^0.04
0.02
yih
wuz yongn xinm yongx
chan
wux
pin
xing
*
share
county
average income
Figure A4
i
I
i
tong
qid
hai
- 0
xiao
Non-users of publicly provided
health services
Percentage
30
25
20
15
oo
10
5
0
yih
wuz
xinm yongx chan
wux
pin
County
% of non-users
Figure A5
xing
tong
qid
hai
xiao
Causes of non-use
of publicly provided health services
percentage
70 1--------------60
50 -
40
30
20
III I
1
10 0
L"
I
yih
wuz
r
T
I
xinm
yongx
chan
i^
wux
z-
X
X
X;
I
i
pin
xing
tong
LI—U
not serious
county
\
Figure A6
no money
other sources
no time
other reason
qid
xiao
Position: 1272 (4 views)