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Health Service Finance in Rural China

Health Service Finance in Rural China Community-Based Prepayment compared to the Out-of-Pocket scheme Sukhan Jackson School of Economics University of Queensland, Brisbane,Australia Adrian C. Sleigh National Centre for Epidemiology and Population Health

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Health Service Finance in Rural China

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  1. Health Service Finance in Rural China Community-Based Prepayment compared to the Out-of-Pocket scheme Sukhan Jackson School of Economics University of Queensland, Brisbane,Australia Adrian C. Sleigh National Centre for Epidemiology and Population Health The Australian National University,Canberra, Australia Li Peng Henan Insititute of Parasitic Diseases Zhengzhou,PR China Xi-Li Liu Henan Insititute of Parasitic Diseases Zhengzhou, PR China

  2. Aim 1. Compare pilot community-based prepayment with the out-of-pocket system in rural China 2. “How can China organize finance for equitable health care to rural citizens ie most of its huge population?” Focus on 1. Utilization rates 2. Cost of health services to patients at township (commune) hospitals-lowest level for farmers to access qualified doctors) 3. Effect on hospital incomes and their viability

  3. CHINA HEALTH SECTOR RENOVATION BEFORE 1979 IN 1980s Gov Ins Scheme (GIS) Labor Ins Scheme (LIS) Co-op Med Scheme (CMS - communes) Part GIS, LIS OUT-OF- POCKET (rural) BY 1990s GIS LIS by LATE 1990s Revived RCMS (Rural) NEW RCMS (RURAL) (SET UP FROM 2003) Our Research Topic

  4. China’s Rural Health Care 3-tier health delivery system Focus of our study . utilization . patient costs . services provided Top level – county hospital Middle level – township hospitals (township medical centres) Basic level – village clinics run by paramedics

  5. IMPACT OF ECONOMIC TRANSITION AND HEALTH SECTOR REFORM CAUSED HEALTH INEQUITIES URBAN RURAL

  6. Chinese Ministry of Health, and researchers, reported in 2002: Many sick farmers were hesitant to seek medical treatment for fear of considerable out-of-pocket expenses. If a family has a serious illness, the whole family may become destitute.

  7. Importance of rural health finance China’s political stability is highly dependent on rural development - ie living standard improving. Farmers’ discontent is something the Chinese government does not ignore. An important issue is the health of 800 millionrural residents, 70% of China’s total population.

  8. Evolution of rural co-operative medical schemes (RCMS) – 1990s • 350 counties in 22 provinces started an RCMS by 1997 • Counties collect annual pre-payments from local population as community health insurance • Unfortunately, many RCMS counties, lacking financial resources and political support, dropped out one by one

  9. Operational aspects - RCMS in Study Area, Henan • Finance. Some support from local governments (county and township). • In Gongyi, county government - 1 yuan ($ 0.12)/head • Participating township governments - 2-3 yuan ($ 0.25-0.37)/head. • RCMS farmer-members - premium of 2-5 yuan ($ 0.25-0.62)/head. • Management. The RCMS management committees function at three levels: county (Gongyi) level, township and administrative village. Townships manage their own RCMS (township pop range 8-40 thousand)

  10. Specifically we asked: • Can RCMS deliver more equitable health care than the out-of-pocket system? • better utilization rates? • lower patient costs? • more viable township hospital finance?

  11. Henan RCMS Study Two adjacent counties compared Pre-payment health financing(RCMS) Gong Yi County (total population 784,000) Av annual farm income 3000 yuan (US$375) Out-of-pocket system (no RCMS) Yan Shi County (total population 807,000) Average annual farm income 2600 yuan (US$325)

  12. Gongyi Yanshi Henan Study Counties: Gongyi (RCMS) and Yanshi (no RCMS)

  13. Methods Compare: two CMS and two non-CMS township hospitals: (i) Utilization rates, viability of hospital (ii) costs paid by patients (services & drugs) [(iii) Community satisfaction, manager survey]* * Data not presented here To address the issue of equitable health care

  14. Gongyi and Yanshi Counties, 2001. Selected Statistics Gongyi County 2001 RCMS Yanshi County 2001 No RCMS (Out-of-pocket) Population 781,945 820,589 GDP (yuan) 1,107,802 884,894 Average annual per capita income (yuan) 5,616 5,550 3,424 yuan 2,716 yuan Average net farmer income Birth rate /1000/year 10.6 12.9 Death rate /1000/year 5.2 6.13 M: F sex ratio 100: 97 100: 97

  15. Township hospital outpatients or inpatients sampled in Gongyi (RCMS) and Yanshi (non-RCMS), Aug 2001

  16. Township hospital outpatients and inpatients sampled (continued) Missing values: Education – outpatients: 3 in Yanshi, 8 in Gongyi; Dependents – outpatients: 3 in Yanshi; Household – inpatients: 1 in Gongyi.

  17. Results Outpatient costs (RCMS vs non-RCMS) Average total cost per visit* RCMS Beishankou = 22 yuan (US$2.75) RCMS Zhanjie = 23 yuan (US$2.87) Non-RCMS Guxian = 37 yuan (US$4.5) Non-RCMS Licun = 22 yuan (US$2.8) *Average daily income = US$1.25 (10 yuan) or less

  18. Inpatient costs(RCMS vs non-RCMS) Average cost per inpatient admission* RCMS Beishankou = 1008 yuan (US$126) RCMS Zhanjie = 718 yuan (US$89.7) Non-RCMS Guxian = 826 yuan (US$103) Non-RCMS Licun = 483 yuan (US$60) *Average monthly income = 300 yuan (US$38) or less.

  19. p-value is the value for a 2-tailed test of difference in means between (a) Beishankou and Guxian (b) Zhanjie and Licun. * indicates the values between RCMS and non-RCMS that were statistically significantly different at the 5% level.

  20. Utilization rates & services (RCMS vs non-RCMS) Visits per person per year No. of services/visit RCMS Beishankou = 0.47 4.83 RCMS Zhanjie = 0.70 1.25 Non-RCMS Guxian = 0.30 2.32 Non-RCMS Licun = 0.25 2.02 Although Licun = least expensive, it had the lowest utilization rates.Possibly service quality was inferior? RCMS Beishankou had the highest no. of services per visit & longest inpatient stay duration. Possibly over-servicing?

  21. Yanshi County (non-RCMS) Beishankou Zhanjie Guxian Licun 43,441 35,553 59,364 70,878 Total population of township Persons per household 4.2 3.7 4.2 4.1 Per capita income/year ( in yuan) 3,269 3,221 2,740 2403 0.47 0.70 0.30 0.25 Hospital Visits per person/yr Total patient visits in 2001 20,610 24,786 17,902 17,376 Total patient visits in 2002 22,099 52,875* 21,774 20,349 206,564 97,198 92,147 76,496 Tot number services provided 4.83 1.25 2.32 2.02 Number of services per visit Community Utilization of Township Hospitals 2001 and 2002* Gongyi County (RCMS)

  22. Licun Beishankou Guxian Income Source 154,169 148,072 228,295 15,975 199,139 - - Village Patrols 62,490 Preventive RCMS reimbursement 430,731 N/A N/A 2,465,335 2,319,388 1,597,512 Patient curative fees Total income 3,112,725 2,040,921 2,467,460 1,383,839 TownshipHospital Income 2001+ 2002 RCMS (Beishankou - Zhanjie) boosted total hospital income by 10-14%Important effect Zhanjie 22,4703 1,159,136

  23. REFLECTIONS ON STUDY FINDINGS • Gender equity not bad for access to medical treatment • More female inpatients than males – maternity cases. • Utilization rates for outpatient visits are quite low: • RCMS hospitals visit rates higher than non-RCMS • Utilization rates for inpatients also low: RCMS hospitals & non-RCMS similar, despite higher costs at RCMS. • RCMS yield good income for hospital. Pre-payment system had no evidence of moral hazards in our sample.

  24. REFLECTIONS ON HEALTH EQUITY • “Can China organize finance to provide • equitable health care to its rural population?” • RCMS premiums are too low at present to provide • adequate insurance coverage, and require govt input too. • Should raise to 10 yuan (US$1.25 - 1 day’s income). • Funding from local government only(township & county) • nothing from provincial and central governments. • More govt funds needed esp. to close rural-urban gap. • RCMS helped for catastrophic cases, but not other cases. • RCMS yields substantial income for township medical centres – ensuring they continue (key medical care points).

  25. Conclusions Health care would be more equitable under community-based insurance than the out-of-pocket system, but it needs much more government help. China Central Government has begun a new RCMS (Party Central Committee/State Council document No. 13, 2003). Central government - 10 yuan per head per year for rural farmers in China’s Western Area; if local government provides no less than 10 yuan per head per year, and each rural farmer contributes 10 yuan per head for enrolment – rebates will include drugs.($ 1.25) Our study is timely with China’s reforms in rural health financing. Research outcomes are considered and accepted by Chinese government.

  26. THE END Acknowledgements: This research received financial support from Australian Research Council Large Grant Thank you

  27. Beishankou Guxian Zhanjie Licun Registration 11,918 16,030 11,787 3,790 Western drugs 316,859 617,820 476,958 217,560 Chinese drugs 0 70,584 641 0 Herbal drugs 33,977 36,066 7,996 0 Vph home visits 0 60 0 0 Treatment fees 208,806 19,727 126,543 170,833 Processing fees 115,559 83,390 0 0 Injection fees 34,186 48,570 12,097 68,496 Infusion fees 63,464 0 0 0 Ultra sound B 59,340 18,265 20,770 7,355 Gastroscopy 0 8,090 5,188 0 EEG 1,300 0 2,035 0 ECG 16,678 8,222 5,644 4,310 Laboratory 88,925 59,655 40,819 29,287 X-ray 36,984 51,060 33,137 21,011 Rheoencephalogram 0 0 965 0 TCD 0 8,536 0 0 Operation 219,444 76,622 38,251 64,019 Other A 0 14,732 524 0 Other B 0 6,260 4,250 0 Bed fees 75,001 26,297 1,444 2,961 Total yuan 1,282,441 1,169,987 789,049 589,622 Income from patient fees at RCMS (red font) and non-RCMS township hospitals (2002)

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