The impact of health insurance on financial risk protection in Ningxia, China

In 2009 China launched an ambitious health care reform to ensure equal and affordable access to basic health care for all by 2020. The reform was not only a response to changing patterns of disease, rising health expenditures, and widening regional inequalities, but part of a wider strategy to improve the social security system covering residents in order to increase domestic consumption. Its success will be defined by the efficient use of funds in financing and delivering health care. Against this backdrop, this dissertation evaluates the importance of health insurance characteristics on measures of financial risk protection, household saving and consumption, and preference for health care providers. It uses an experimental design to study the effect of more generous outpatient coverage and a tiered reimbursement structure that sets rates higher at primary care facilities than tertiary hospitals. While middle income households benefitted most in terms of financial risk protection, poorer and sicker households increased utilization at primary care facilities and food consumption â two pathways by which health insurance can improve health outcomes. This suggests that as outpatient coverage improves those most vulnerable will increase their access to health care, where there was previous underutilization, but not necessarily see an improvement in financial risk protection. The increased cover would also offer greater protection for those already using healthcare, but on its own not necessarily change their utilization patterns or reduce household savings. Looking at the quality-price trade-off in choice of provider reveals that, while at lower levels of household consumption demand for outpatient care is elastic with respect to price, as living standards rise past subsistence, individuals begin to value other provider characteristics. Together, these findings highlight the importance of benefit design and quality improvements at lower levels of care to shift patterns of utilization and ensure health services are accessed cost-effectively. (Thesis word count: ˜ 44,800 plus references and appendices)