Health Service Finance in Rural Health Service Finance in Rural ChinaChina

Community-Based Prepayment Community-Based Prepayment compared to the Out-of-Pocket schemecompared to the Out-of-Pocket scheme

Sukhan JacksonSchool of Economics

University of Queensland, Brisbane,Australia

Adrian C. SleighNational Centre for Epidemiology and Population

HealthThe Australian National University,Canberra, Australia

Li PengHenan Insititute of Parasitic Diseases

Zhengzhou,PR China

Xi-Li LiuHenan Insititute of Parasitic Diseases

Zhengzhou, PR China

AimAim

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 onFocus on1. 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

Gov Ins Scheme (GIS)Labor Ins Scheme (LIS)

Co-op Med Scheme(CMS - communes)

GISLIS

Part GIS, LISOUT-OF- POCKET

(rural)

Revived RCMS (Rural)

NEW RCMS (RURAL)(SET UP FROM 2003)

BY 1990s

by LATE 1990s

IN 1980s

CHINA HEALTH SECTOR RENOVATIONCHINA HEALTH SECTOR RENOVATIONBEFORE 1979

Our Research

Topic

China’s Rural Health CareChina’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

RURALURBA

N

IMPACT OF ECONOMIC

TRANSITION AND HEALTH SECTOR REFORM CAUSED

HEALTH INEQUITIES

Chinese Ministry of Health, Chinese Ministry of Health, and researchers, reported in and researchers, reported in 20022002:

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.

Importance of rural health Importance of rural health financefinance

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.

Evolution of rural co-Evolution of rural co-operative medical schemes operative medical schemes

(RCMS) – 1990s(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

Operational aspects - RCMS in Study Area, HenanOperational 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)

Specifically we asked:Specifically we asked:

Can RCMS deliver more equitable health care than the out-of-pocket system?

(a) better utilization rates?(b) lower patient costs?(c) more viable township hospital

finance?

Henan RCMS StudyHenan RCMS StudyTwo adjacent counties comparedTwo adjacent counties compared Pre-payment health financingPre-payment health financing (RCMS)(RCMS)Gong Yi County (total population 784,000) Av annual farm income 3000 yuan (US$375)

Out-of-pocket system (no RCMS)Out-of-pocket system (no RCMS)Yan Shi County (total population 807,000) Average annual farm income 2600 yuan (US$325)

Figure 1. Malaria study counties in Henan (inset – shaded areas)

Yanshi

Gongyi

Henan Study Counties: Gongyi (RCMS) and Yanshi

(no RCMS)

Methods

Compare: two CMS and two non-CMS two CMS and two non-CMS

township hospitals: 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

Gongyi and Yanshi Counties, 2001. Gongyi and Yanshi Counties, 2001. Selected StatisticsSelected Statistics

100: 97100: 97 M: F sex ratio

6.135.2Death rate /1000/year

12.910.6Birth rate /1000/year

2,716 yuan3,424 yuanAverage net farmer income

5,5505,616Average annual per capita income (yuan)

884,8941,107,802GDP (yuan)

820,589781,945Population

Yanshi County 2001No RCMS

(Out-of-pocket)

Gongyi County 2001 RCMS

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

OUTPATIENTS INPATIENTS

Yanshi Gongyi Yanshi Gongyi

N=424 % N=428 % N=56 % N=59 %

Males 220 51.9 187 43.7 26 46.2 23 39

Age (years)

< 1 23 5.4 9 2.1 2 0.5 0 0

1-14 82 19.4 60 14.0 11 19.6 2 3.4

15-49 201 47.4 234 54.6 30 53.6 38 64.5

50 and over 118 27.8 125 29.2 13 23.2 19 32.2

Occupation

Worker 24 5.7 46 10.8 0 0 4 6.8

Farmer 212 50 199 46.5 34 60.7 37 62.7

Student 63 15 48 11.2 7 12.5 2 3.4

Teacher or cadre 23 5.4 33 7.7 2 3.6 1 1.7

Business or other 102 24.0 102 23.8 13 23.3 15 25.5

OUTPATIENTS INPATIENTS

Yanshi Gongyi Yanshi Gongyi

N=424 % N=428 % N=56 % N=59 %

EducationNil 94 22.2 68 15.9 10 17.9 7 11.9

Primary or Junior 280 66 276 64.5 42 75.1 44 74.6

Senior or above 45 11.1 76 17.8 4 7.2 8 13.6

Persons living in household

1-2 51 12.0 67 15.7 5 9.0 11 18.7

3-4 211 49.8 245 57.2 25 44.7 28 47.5

5 or more 162 38.1 116 27 26 46.4 19 32.2

Dependents eg child-aged- disabled

0-1 166 39.1 228 53.3 19 33.9 27 46.1

2-3 220 51.9 176 41.2 29 51.8 26 44.2

4–5 37 8.8 24 5.6 8 14.3 6 10.2

Rural Co-operative medical scheme member card used

N/A - 250 58.4 N/A - 33 56.0Missing values:Education – outpatients: 3 in Yanshi, 8 in Gongyi; Dependents – outpatients: 3 in Yanshi; Household – inpatients: 1 in Gongyi.

Township hospital outpatients and inpatients sampled (continued)Township hospital outpatients and inpatients sampled (continued)

ResultsResultsOutpatient costsOutpatient 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

Inpatient costsInpatient 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.

Gongyi County (RCMS)

Beishankou Hospital-AYanshi County (non-RCMS)

Guxian Hospital-CGongyi County (RCMS)

Zhanjie Hospital-BYanshi County (non-RCMS)

Licun Hospital-D

Payment in yuan

N=185 outpatients N=195 outpatients p-value

N=154 outpatients N=150 outpatients p-value

Mean SD Min Max Mean SD Min Max Mean SD Min Max Mean SD Min Max

Drugs 18.72 24.31 0 122 26.17 32.99 0 292.5 0.012* 20.69 36.47 0 278.7 16.43 21.40 0 115 0.214

Operation 0 0 0 0 0.64 6.20 0 80 0.15 0.12 1.03 0 10 3.42 22.16 0 170 0.07

Laboratory 5.59 13.83 0 117 5.97 13.52 0 80 0.786 3.53 8.45 0 45 2.70 7.99 0 70 0.379

Registration 0 0 0 0 0.06 0.61 0 6 0.158 0.13 1.60 0 19.8 0.31 0.24 0 0.9 0.171

Processing 1.87 8.71 0 74 7.65 37.30 0 320 0.037* 4.82 12.61 0 80 3.50 11.97 0 100 0.35

Treatment 1.01 9.60 0 116 0.75 5.98 0 60 0.756 0.39 3.16 0 30 2.28 7.68 0 59 0.006*

Others 0.03 0.37 0 5.0 0.87 5.05 0 64 0.022* 0.13 0.78 0 5.5 0.67 4.16 0 30 0.12

Total 22.92 28.17 0 122 36.99 54.22 0 401.2 0.001* 23.07 38.29 0 193 21.76 37.73 0 334.4 0.73

Payment in yuan

N=30 inpatients N=25 inpatients p-value

N=29 inpatients N=31 inpatients p-value

Mean SD Min Max Mean SD Min Max Mean SD Min Max Mean SD Min Max

Drugs 400 564 38 3164 387 674 19 2946 0.942 324 333 48 1320 122 79 14 378 0.003*

Operation 118 217 0 700 226 465 0 1800 0.293 48 122 0 450 169 285 0 830 0.035*

Laboratory 90 101 0 489 56 121 0 560 0.272 74 66 0 370 10 10 0 35 0.000*

Registration 0 0 0 0 0 0 0 0 - 0.1 0.2 0 0.4 0.4 0 0.4 0.4 0.000*

Processing 157 181 0 861 32 85 0 320 0.002* 85 132 0 320 48 80 0 220 0.197

Bed fee 156 305 0 1688 34 131 0 634 0.055 86 64 18 238 25 27 0 149 0.000*

Treatment 24 85 0 420 8.68 30 0 127 0.379 51 72 0 350 85 113 0 623 0.175

Others 26 78 0 380 82 165 0 800 0.133 31 148 0 800 23 32 0 95 0.796

Total 1008 1072 170 6202 826 1477 19 6778 0.610 718 497 219 2183 483 445 45 1401 0.058

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.

Utilization rates & servicesUtilization 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 lowestutilization rates.Possibly service quality was inferior?

RCMS Beishankou had the highest no. of services per visit & longest inpatient stay duration. Possibly over-servicing?

Gongyi County(RCMS)

2.022.321.254.83Number of services per visit

76,49692,14797,198206,564Tot number services provided

20,34921,77452,875*22,099Total patient visits in 2002

17,37617,90224,78620,610Total patient visits in 2001

0.250.300.700.47Hospital Visits per person/yr

24032,740 3,221 3,269 Per capita income/year ( in yuan)

4.14.23.74.2Persons per household

70,87859,36435,55343,441Total population of township

LicunGuxianZhanjieBeishankou

Yanshi County(non-RCMS)

Community Utilization of Township Community Utilization of Township Hospitals 2001 and 2002*Hospitals 2001 and 2002*

1,159,136

22,4703

Zhanjie

1,383,8392,040,9212,467,4603,112,725Total income

1,597,5122,319,388

2,465,335

Patient curative fees

N/AN/A430,731

--62,490Village Patrols

228,295154,169

Preventive

148,072

Beishankou Income

Source

15,975

199,139

Guxian Licun

RCMS reimbursement

TownshipHospital Income

2001+ 2002

RCMS (Beishankou - Zhanjie) boosted total hospital income by 10-14% Important effect

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.

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 Should raise to 10 yuan (US$1.25 - 1 day’s income).income).• Funding from local government only(township & county) nothing from provincial and central governments. More govt funds needed esp. to close rural-urban More govt funds needed esp. to close rural-urban gap.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).

ConclusionsHealth 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.

THE END

Acknowledgements:

This research received financial support from Australian Research Council Large Grant

  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)