The Impact of the New Rural Cooperative Medical Scheme on Activities and Financing of Township Hospitals in Weifang, China

Since 2003, the New Rural Cooperative Medical Scheme is gradually implemented in China, in order first, to increase access of the poor to health services, reduce out-of-pocket expenditures and avoid catastrophic health expenditures and second to re-oriented patient to township hospitals. The paper estimates the impact of the New Rural Cooperative Medical Scheme on a sample of 24 township hospitals of Weifang prefecture (Shandong province), using a generalized form of differences-in-differences model on longitudinal data over the period 2000-2008. The estimations conclude to the significant and positive impact of the New Rural Cooperative Medical Scheme on inpatient activities and on the bed occupancy rate, and to the significant and negative impact on the average length of stay. As expected, the impact on inpatient activities is higher in poor areas than in non poor ones and the marginal impact is decreasing over time.