IDEAS home Printed from https://ideas.repec.org/p/ags/ubzefd/116746.html
   My bibliography  Save this paper

The New Cooperative Medical Scheme (NCMS) and its implications for access to health care and medical expenditure: Evidence from rural China

Author

Listed:
  • Liu, Dan
  • Tsegai, Daniel W.

Abstract

The New Cooperative Medical Scheme (NCMS) program was implemented in response to ‘illness-led poverty’ and poor state of healthcare in rural China. Supported by government subsidy, more and more poor rural households are now enrolled in the NCMS. This paper investigates the impact of the NCMS program on improving health care utilization and reducing medical expenditure with a specific focus on the endeavors to unravel the heterogeneous effects of the program for the different regions and income groups. We utilize the China Health and Nutrition Survey data (CHNS) to provide prolific cross section and longitudinal information. A total sample of 6,293 individuals and 2,058 households are included in the analysis. Propensity score matching method and bounding approach are used to infer the causal effect of NCMS and examine the influence of unobservable factors respectively. Major findings indicate that there is a systematic adverse selection in the NCMS program, both in health- and economic-related aspects. Especially in western regions, households with high ratio of migrant workers are less attracted to the NCMS program. The NCMS program improved medical care utilization for the poor and regionally, western regions benefitted more from the program. The NCMS program also induces a moral hazard problem in western regions.

Suggested Citation

  • Liu, Dan & Tsegai, Daniel W., 2011. "The New Cooperative Medical Scheme (NCMS) and its implications for access to health care and medical expenditure: Evidence from rural China," Discussion Papers 116746, University of Bonn, Center for Development Research (ZEF).
    • Handle: RePEc:ags:ubzefd:116746
    DOI: 10.22004/ag.econ.116746
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/116746/files/DP155.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.116746?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Antonio Trujillo & Jorge Portillo & John Vernon, 2005. "The Impact of Subsidized Health Insurance for the Poor: Evaluating the Colombian Experience Using Propensity Score Matching," International Journal of Health Economics and Management, Springer, vol. 5(3), pages 211-239, September.
    2. Wagstaff, Adam & Lindelow, Magnus & Jun, Gao & Ling, Xu & Juncheng, Qian, 2009. "Extending health insurance to the rural population: An impact evaluation of China's new cooperative medical scheme," Journal of Health Economics, Elsevier, vol. 28(1), pages 1-19, January.
    3. Jalan, Jyotsna & Ravallion, Martin, 2003. "Estimating the Benefit Incidence of an Antipoverty Program by Propensity-Score Matching," Journal of Business & Economic Statistics, American Statistical Association, vol. 21(1), pages 19-30, January.
    4. Deon Filmer & Jeffrey S. Hammer & Lant H. Pritchett, 2002. "Weak Links in the Chain II: A Prescription for Health Policy in Poor Countries," The World Bank Research Observer, World Bank, vol. 17(1), pages 47-66.
    5. Zheren Wu, 2010. "Self‐selection and Earnings of Migrants: Evidence from Rural China," Asian Economic Journal, East Asian Economic Association, vol. 24(1), pages 23-44, March.
    6. Bryson, Alex & Dorsett, Richard & Purdon, Susan, 2002. "The use of propensity score matching in the evaluation of active labour market policies," LSE Research Online Documents on Economics 4993, London School of Economics and Political Science, LSE Library.
    7. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 249-275.
    8. A. Smith, Jeffrey & E. Todd, Petra, 2005. "Does matching overcome LaLonde's critique of nonexperimental estimators?," Journal of Econometrics, Elsevier, vol. 125(1-2), pages 305-353.
    9. Wagstaff, Adam & Lindelow, Magnus, 2008. "Can insurance increase financial risk?: The curious case of health insurance in China," Journal of Health Economics, Elsevier, vol. 27(4), pages 990-1005, July.
    10. Marco Caliendo & Sabine Kopeinig, 2008. "Some Practical Guidance For The Implementation Of Propensity Score Matching," Journal of Economic Surveys, Wiley Blackwell, vol. 22(1), pages 31-72, February.
    11. Sascha O. Becker & Marco Caliendo, 2007. "Sensitivity analysis for average treatment effects," Stata Journal, StataCorp LP, vol. 7(1), pages 71-83, February.
    12. Arrow, Kenneth J, 1996. "The Theory of Risk-Bearing: Small and Great Risks," Journal of Risk and Uncertainty, Springer, vol. 12(2-3), pages 103-111, May.
    13. James J. Heckman & Hidehiko Ichimura & Petra E. Todd, 1997. "Matching As An Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 64(4), pages 605-654.
    14. Menno Pradhan & Fadia Saadah & Robert Sparrow, 2007. "Did the Health Card Program Ensure Access to Medical Care for the Poor during Indonesia's Economic Crisis?," The World Bank Economic Review, World Bank, vol. 21(1), pages 125-150.
    15. Eddy van Doorslaer & Owen O'Donnell, 2008. "Measurement and Explanation of Inequality in Health and Health Care in Low-Income Settings," WIDER Working Paper Series DP2008-04, World Institute for Development Economic Research (UNU-WIDER).
    16. James P. Smith, 1999. "Healthy Bodies and Thick Wallets: The Dual Relation between Health and Economic Status," Journal of Economic Perspectives, American Economic Association, vol. 13(2), pages 145-166, Spring.
    17. Xiaoyan Lei & Wanchuan Lin, 2009. "The New Cooperative Medical Scheme in rural China: does more coverage mean more service and better health?," Health Economics, John Wiley & Sons, Ltd., vol. 18(S2), pages 25-46, July.
    18. Zeckhauser, Richard, 1970. "Medical insurance: A case study of the tradeoff between risk spreading and appropriate incentives," Journal of Economic Theory, Elsevier, vol. 2(1), pages 10-26, March.
    19. Petra E. Todd & Jeffrey A. Smith, 2001. "Reconciling Conflicting Evidence on the Performance of Propensity-Score Matching Methods," American Economic Review, American Economic Association, vol. 91(2), pages 112-118, May.
    20. Jowett, M. & Contoyannis, P. & Vinh, N. D., 2003. "The impact of public voluntary health insurance on private health expenditures in Vietnam," Social Science & Medicine, Elsevier, vol. 56(2), pages 333-342, January.
    21. Wagstaff, Adam, 2005. "The economic consequences of health shocks," Policy Research Working Paper Series 3644, The World Bank.
    22. Adam Wagstaff & Eddy van Doorslaer, 2003. "Catastrophe and impoverishment in paying for health care: with applications to Vietnam 1993–1998," Health Economics, John Wiley & Sons, Ltd., vol. 12(11), pages 921-933, November.
    23. Denis Drechsler & Johannes Jütting, 2005. "Private Health Insurance for the Poor in Developing Countries?," OECD Development Centre Policy Insights 11, OECD Publishing.
    24. Sepehri, Ardeshir & Simpson, Wayne & Sarma, Sisira, 2006. "The influence of health insurance on hospital admission and length of stay--The case of Vietnam," Social Science & Medicine, Elsevier, vol. 63(7), pages 1757-1770, October.
    25. Sascha O. Becker & Andrea Ichino, 2002. "Estimation of average treatment effects based on propensity scores," Stata Journal, StataCorp LP, vol. 2(4), pages 358-377, November.
    26. Menno Pradhan & Nicholas Prescott, 2002. "Social risk management options for medical care in Indonesia," Health Economics, John Wiley & Sons, Ltd., vol. 11(5), pages 431-446, July.
    27. Hurley, Jeremiah, 2000. "An overview of the normative economics of the health sector," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 2, pages 55-118, Elsevier.
    28. Shahidur R. Khandker & Gayatri B. Koolwal & Hussain A. Samad, . "Handbook on Impact Evaluation : Quantitative Methods and Practices," World Bank Publications, The World Bank, number 2693, September.
    29. Johar, Meliyanni, 2009. "The impact of the Indonesian health card program: A matching estimator approach," Journal of Health Economics, Elsevier, vol. 28(1), pages 35-53, January.
    30. Owen O'Donnell & Eddy van Doorslaer & Ravi P. Rannan-Eliya & Aparnaa Somanathan & Shiva Raj Adhikari & Deni Harbianto & Charu C. Garg & Piya Hanvoravongchai & Mohammed N. Huq & Anup Karan & Gabriel M., 2007. "The Incidence of Public Spending on Healthcare: Comparative Evidence from Asia," The World Bank Economic Review, World Bank, vol. 21(1), pages 93-123.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Diana Cheung & Jean-Pierre Laffargue & Ysaline Padieu, 2016. "Insurance of Household Risks and the Rebalancing of the Chinese Economy: Health Insurance, Health Expenses and Household Savings," Pacific Economic Review, Wiley Blackwell, vol. 21(3), pages 381-412, August.
    2. Jessica Ya Sun, 2020. "Welfare consequences of access to health insurance for rural households: Evidence from the New Cooperative Medical Scheme in China," Health Economics, John Wiley & Sons, Ltd., vol. 29(3), pages 337-352, March.
    3. Liu, Kai & Wu, Qiaobing & Liu, Junqiang, 2014. "Examining the association between social health insurance participation and patients' out-of-pocket payments in China: The role of institutional arrangement," Social Science & Medicine, Elsevier, vol. 113(C), pages 95-103.
    4. Zhiyuan Hou & Ellen Van de Poel & Eddy Van Doorslaer & Baorong Yu & Qingyue Meng, 2014. "Effects Of Ncms On Access To Care And Financial Protection In China," Health Economics, John Wiley & Sons, Ltd., vol. 23(8), pages 917-934, August.
    5. Liu, Hong & Zhao, Zhong, 2014. "Does health insurance matter? Evidence from China’s urban resident basic medical insurance," Journal of Comparative Economics, Elsevier, vol. 42(4), pages 1007-1020.
    6. Yang, Miaoqing, 2018. "Demand for social health insurance: Evidence from the Chinese New Rural Cooperative Medical Scheme," China Economic Review, Elsevier, vol. 52(C), pages 126-135.
    7. Colin Green & Bruce Hollingsworth & Miaoqing Yang, 2021. "The impact of social health insurance on rural populations," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 22(3), pages 473-483, April.
    8. Chen, Bingzheng & Feng, Frank Y. & Powers, Michael R. & Qiu, Joseph, 2019. "Risk-revealing contracts for government-sponsored microinsurance," Pacific-Basin Finance Journal, Elsevier, vol. 57(C).
    9. McBain, Florence, 2014. "Health insurance and health environment: India’s subsidized health insurance in a context of limited water and sanitation services," Working Papers 179200, University of Bonn, Center for Development Research (ZEF).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dan Liu & Daniel Tsegai & David Litaker & Joachim Braun, 2015. "Under regional characteristics of rural China: a clearer view on the performance of the New Rural Cooperative Medical Scheme," International Journal of Health Economics and Management, Springer, vol. 15(4), pages 407-431, December.
    2. Sarah Alkenbrack & Magnus Lindelow, 2015. "The Impact of Community‐Based Health Insurance on Utilization and Out‐of‐Pocket Expenditures in Lao People's Democratic Republic," Health Economics, John Wiley & Sons, Ltd., vol. 24(4), pages 379-399, April.
    3. Johar, Meliyanni, 2009. "The impact of the Indonesian health card program: A matching estimator approach," Journal of Health Economics, Elsevier, vol. 28(1), pages 35-53, January.
    4. Sparrow, Robert & Suryahadi, Asep & Widyanti, Wenefrida, 2013. "Social health insurance for the poor: Targeting and impact of Indonesia's Askeskin programme," Social Science & Medicine, Elsevier, vol. 96(C), pages 264-271.
    5. Bagnoli, Lisa, 2019. "Does health insurance improve health for all? Heterogeneous effects on children in Ghana," World Development, Elsevier, vol. 124(C), pages 1-1.
    6. Ashimwe, Olive, 2016. "An Economic Analysis Of Impact Of Weather Index-Based Crop Insurance On Household Income In Huye District Of Rwanda," Research Theses 265675, Collaborative Masters Program in Agricultural and Applied Economics.
    7. Palmer, Michael G., 2014. "Inequalities in Universal Health Coverage: Evidence from Vietnam," World Development, Elsevier, vol. 64(C), pages 384-394.
    8. Ali, Shehzad & Cookson, Richard & Dusheiko, Mark, 2017. "Addressing care-seeking as well as insurance-seeking selection biases in estimating the impact of health insurance on out-of-pocket expenditure," Social Science & Medicine, Elsevier, vol. 177(C), pages 127-140.
    9. Wagstaff, Adam & Lindelow, Magnus & Jun, Gao & Ling, Xu & Juncheng, Qian, 2009. "Extending health insurance to the rural population: An impact evaluation of China's new cooperative medical scheme," Journal of Health Economics, Elsevier, vol. 28(1), pages 1-19, January.
    10. Wendimu, Mengistu Assefa & Henningsen, Arne & Gibbon, Peter, 2016. "Sugarcane Outgrowers in Ethiopia: “Forced” to Remain Poor?," World Development, Elsevier, vol. 83(C), pages 84-97.
    11. Ashimwe, Olive, 2016. "An Economic Analysis Of Impact Of Weather Index-Based Crop Insurance On Household Income In Huye District Of Rwanda," Research Theses 276460, Collaborative Masters Program in Agricultural and Applied Economics.
    12. Sodokin, Koffi & Djafon, Joseph Kokouvi & Dandonougbo, Yevessé & Akakpo, Afi & Couchoro, Mawuli K. & Agbodji, Akoété Ega, 2023. "Technological change, completeness of financing microstructures, and impact on well-being and income inequality," Telecommunications Policy, Elsevier, vol. 47(6).
    13. Arraiz, Irani & Calero, Carla & Jon, Songqing & Peralta, Alexandra, 2015. "Planting the seeds: The impact of training on mando producers in Haiti," 2015 Conference, August 9-14, 2015, Milan, Italy 212622, International Association of Agricultural Economists.
    14. Khaled Makhloufi & Bruno Ventelou & Mohammad Abu-Zaineh, 2015. "Have health insurance reforms in Tunisia attained their intended objectives?," International Journal of Health Economics and Management, Springer, vol. 15(1), pages 29-51, March.
    15. Abebaw, Degnet & Fentie, Yibeltal & Kassa, Belay, 2010. "The impact of a food security program on household food consumption in Northwestern Ethiopia: A matching estimator approach," Food Policy, Elsevier, vol. 35(4), pages 286-293, August.
    16. Joseph J. Capuno & Maria Melody S. Garcia, 2008. "Can information about local government performance induce civic participation? Evidence from the Philippines," UP School of Economics Discussion Papers 200808, University of the Philippines School of Economics.
    17. Tommaso Nannicini, 2007. "Simulation-based sensitivity analysis for matching estimators," Stata Journal, StataCorp LP, vol. 7(3), pages 334-350, September.
    18. Feddersen, Arne & Maennig, Wolfgang, 2012. "Sectoral labour market effects of the 2006 FIFA World Cup," Labour Economics, Elsevier, vol. 19(6), pages 860-869.
    19. Azam, Mehtabul, 2018. "Does Social Health Insurance Reduce Financial Burden? Panel Data Evidence from India," World Development, Elsevier, vol. 102(C), pages 1-17.
    20. Marco Caliendo & Sabine Kopeinig, 2008. "Some Practical Guidance For The Implementation Of Propensity Score Matching," Journal of Economic Surveys, Wiley Blackwell, vol. 22(1), pages 31-72, February.

    More about this item

    Keywords

    Health Economics and Policy;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:ubzefd:116746. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/zefbnde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.