Journal
HEALTH ECONOMICS POLICY AND LAW
Volume 15, Issue 1, Pages 56-71Publisher
CAMBRIDGE UNIV PRESS
DOI: 10.1017/S1744133118000385
Keywords
health insurance; out of pocket; provider payment method; supply-induced demand; universal coverage
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Funding
- National Natural Science Foundation of China [NSFC 71734005]
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China has achieved nearly universal social health insurance (SHI) coverage by implementing three statutory schemes, but gaps and differences in benefit levels are apparent. There is wide agreement that China should merge the three schemes into a universal and uniform SHI. However, data on the medical expenses of all inpatients in 2014 at a public Tier-three hospital suggests that supply-induced demand (SID) is a serious concern and that, under the design of the current schemes, a higher benefit level has a greater impact on the total expenses of insured patients. Thus, if SID is not effectively controlled, a universal and uniform SHI may be more harmful than beneficial in China. Finally, we suggest that China should substitute the existing fee-for-service design with a suite of bundled provider payment methods; furthermore, China should replace its current system of pricing drugs that encourages hospitals and doctors to use costlier medications.
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