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Ten Years of Progress Towards Universal Health Coverage: Has China Achieved Equitable Healthcare Financing?

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Ten Years of Progress Towards Universal Health Coverage: Has China Achieved Equitable Healthcare Financing? Original research BMJ Glob Health: first published as 10.1136/bmjgh-2020-003570 on 18 November 2020. Downloaded from Ten years of progress towards universal health coverage: has China achieved equitable healthcare financing? 1,2,3 1 4,5 Mingsheng Chen, Guoliang Zhou, Lei Si To cite: Chen M, Zhou G, ABSTRACT Key questions Si L. Ten years of progress Introduction This study aims to systematically evaluate towards universal health vertical and horizontal equity in the Chinese healthcare What is already known? coverage: has China achieved financing system over the period 2008–2018 during the equitable healthcare Previous studies on China’s healthcare financing progress towards Universal Health Coverage (UHC), and ► financing?BMJ Global Health mainly focused on vertical equity. to examine how both types of equity have changed during 2020;5:e003570. doi:10.1136/ The benefits package of the health insurance this period. ► bmjgh-2020-003570 scheme in rural China needs further improvements. Methods Household information on healthcare payments Flat rate contributions pose a challenge to health in- was collected from 2398 households involving 7021 ► Handling editor Sanni Yaya surance premiums in China. individuals in 2008, 3600 households involving 10 466 ► Additional material is individuals in 2013 and 3660 households involving 11 550 What are the new findings? published online only. To view individuals in 2018. Redistributive effects of healthcare This study is the first to systemically examine the please visit the journal online ► financing system were decomposed into progressivity, pure (http:// dx. doi. org/ 10. 1136/ vertical and horizontal equity of healthcare financing bmjgh- 2020- 003570). horizontal inequity and reranking. Progressivity analysis in China. and the Aronson- Johnson- Lambert decomposition method ► Healthcare financing experienced redistribution from were adopted to measure the vertical equity and horizontal the poor to the rich during 10 years of progress to- Received 29 July 2020 equity of healthcare financing. wards Universal Health Coverage (UHC) in China. Revised 30 September 2020 Results Over the period 2008–2018, healthcare financing ► UHC has contributed to reducing horizontal inequi- Accepted 20 October 2020 through indirect taxes showed a slightly prorich structure ty in relation to out- of- pocket payments in China’s and healthcare financing through direct taxes showed urban areas. a propoor structure in both urban and rural areas. Urban Employee Basic Medical Insurance experienced What do the new findings imply? redistribution from the poor to the rich during the period ► Issues of horizontal inequity arose with more people 2008–2013, but then experienced redistribution from covered by health insurance programmes in China. the rich to the poor during the period 2013–2018. Urban ► UHC improved access to and utilisation of healthcare http://gh.bmj.com/ Resident Basic Medical Insurance (URBMI), New Rural in urban China. Cooperative Medical Scheme (NRCMS), Urban and Rural ► The health insurance benefits package in rural China © Author(s) (or their needs further improvements. employer(s)) 2020. Re- use Resident Basic Medical Insurance (URRBMI) and out- of- permitted under CC BY- NC. No pocket payments experienced redistribution from the poor commercial re- use. See rights to the rich over the entire period. and permissions. Published by Cooperative Medical Scheme (NRCMS) are Conclusion China’s healthcare financing has experienced on October 1, 2021 by guest. Protected copyright. BMJ. redistribution from the poor to the rich during 10 years the main types of social health insurance that 1School of Health Policy and of progress toward the UHC. UHC improved access to cover the urban and rural populations. These Management, Nanjing Medical and utilisation of healthcare in urban areas. The flat rate insurance schemes involve different contribu- University, Nanjing, China 2 contribution mechanism should be renovated for URBMI, tion schedules. UEBMI is a universal health Creative Health Policy Research NRCMS and URRBMI. Group, Nanjing, China insurance scheme for workers and retirees. 3Center for Global Health, Contributions to the UEBMI scheme are a Nanjing Medical University, fixed proportion of the employee’s salary. Nanjing, China URBMI provides cover for urban residents 4 The George Institute for INTRODUCTION who are not employed, and thus ineligible Global Health, UNSW Sydney, Kensington, New South Wales, In 2009, the Chinese government announced for the UEBMI scheme. Target groups for the Australia a healthcare reform plan that aimed to URBMI scheme were children, the elderly, 5UNSW Medicine, UNSW Sydney, achieve Universal Health Coverage (UHC) by the disabled, laid- off workers and other non- Sydney, New South Wales, expanding social health insurance to provide working urban residents. The scheme was Australia coverage for more than 90% of the popula- mainly financed by government subsidies for 1 Correspondence to tion. Urban Employee Basic Medical Insur- premiums, together with flat rate household Dr Lei Si; ance (UEBMI), Urban Resident Basic Medical contributions. The NRCMS was implemented lsi@ georgeinstitute. org. au Insurance (URBMI) and the New Rural to meet the needs of rural populations. Since Chen M, et al. BMJ Global Health 2020;5:e003570. doi:10.1136/bmjgh-2020-003570 1 BMJ Global Health BMJ Glob Health: first published as 10.1136/bmjgh-2020-003570 on 18 November 2020. Downloaded from 2016, URBMI and NRCMS have been merged into a new type of resident medical insurance, Urban and Rural Resident Basic Medical Insurance (URRBMI), which covered the population in the previous URBMI and NRCMS. Similar to URBMI, the NRCMS and URRBMI featured flat rate contributions. However, although all enrollees paid the same premiums to the NRCMS, the benefit packages varied geographically. In addition to social health insurance, taxation and out- of- pocket (OOP) payments are the two other sources of finance for healthcare in China.2 However, the impact of these sources on healthcare financing is likely to vary. Contributions towards the financing of healthcare may Figure 1 Healthcare financing triangle. Finance from out- of- redistribute household income within a given popula- pocket (OOP) payments and social health expenditure as a tion. This redistribution can be both vertical and hori- percentage of total expenditure on health (TEH). zontal. Vertical redistribution occurs when payments are disproportionately related to ability to pay (ATP). Hori- the 10 years of progress towards UHC in China. Second, zontal redistribution occurs when people with equal ATP the equity of healthcare financing depends not only on contribute unequally to healthcare payments because of its degree of progressivity, but also on the extent of any differential treatment. Vertical and horizontal redistribu- pure horizontal inequity and reranking resulting from tions are generally defined as redistributive effects (REs). it.4 5 Previous studies on healthcare financing in China The total RE can be quantitatively decomposed into have only focused on vertical equity, and a comprehen- three portions: vertical equity, pure horizontal equity sive analysis of healthcare financing equity has never and reranking. Vertical equity implies that people with been undertaken. To our knowledge, only one study has greater economic ability ought to pay more. Pure hori- examined the horizontal equity of healthcare financing zontal equity implies that people with equal economic in China between 2003 and 2008.6 To date, no studies ability should pay the same. Reranking occurs when have systemically examined both vertical and horizontal people change rank order after payments. equity during the progress towards UHC in China. This With regard to UEBMI, contributions are correlated is a serious omission. This study seeks to address this gap with the enrollee’s salary. Thus, the rich make a larger in the literature by evaluating the progressivity, hori- contribution, which contributes to vertical equity. zontal equity and reranking associated with healthcare However, the contribution is not solely linked to salary, financing in China during the progress towards UHC. We but is also correlated with factors such as the enrollee’s conducted three surveys in 2008, 2013 and 2018. The aim age and location. Thus, the UEBMI contribution at a of our analysis is to systemically evaluate equity of health- given income level is uncertain, and the extent of this care financing during the 10 years of progress toward http://gh.bmj.com/ horizontal inequity is unclear. With regard to URBMI, UHC in China, including vertical equity, pure horizontal NRCMS and URRBMI, the flat rate contributions mean equity and reranking. that the rich and poor pay the same premium, thereby contributing to horizontal equity and vertical inequity. Regarding finance from taxation, payments for health- METHODS care are linked to whatever tax bases are used. For Data sources example, much higher income tax rates are imposed on Data for our study were collected via three rounds of on October 1, 2021 by guest. Protected copyright. high- income individuals. This tax schedule is both hori- household surveys conducted in Jiangsu province in zontally inequitable and vertically equitable. However, eastern China. Socioeconomic development varied with regard to some indirect taxes, such as consumption geographically in Jiangsu: the overall economic status is tax, the tax burden can be transferred from one person
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