Delivering universal health coverage for an aging population: an analysis of the Chinese rural health insurance program

Wenhui Zhou, Yanfang Zheng, Alec Morton, Feng Luo

Research output: Contribution to journalArticle

Abstract

There is now high level international commitment to the goal of universal health coverage. But how can countries make this a reality in the face of a limited budget and an aging population? Since 2008, China has been rolling out an ambitious reform program, which aims to achieve affordable health insurance coverage for all Chinese citizens. Under this reform program, Chinese living in rural areas are eligible to enroll in a subsidized scheme called the New Cooperative Medical System (NCMS). Using a three stage game model involving a government, a private fund manager and population, we explore the impact of population aging on NCMS. Our model highlights the role of government regulation and subsidy in ensuring operation efficiency of the system. We show that at optimality the government sets the operating framework for the fund manager to constrain the potential for monopoly profits. The Government subsidizes the scheme to prevent an adverse selection death spiral. However, the effectiveness of the subsidy in achieving this goal is moderated by the age structure of the population. Our model gives insights into the strengths of the NCMS framework and also can be used to support decisions about resource allocation and understand how scheme dynamics may unfold as the Chinese population ages further.
LanguageEnglish
Pages204-224
Number of pages21
JournalChina Economic Review
Volume52
Early online date29 Jul 2018
DOIs
Publication statusPublished - 31 Dec 2018

Fingerprint

Universal Coverage
Rural Health
Health Insurance
health insurance
coverage
Health
health
reform program
Population
Financial Management
subsidy
Government Financing
Government Regulation
manager
insurance coverage
Insurance Coverage
age structure
Resource Allocation
Budgets
monopoly

Keywords

  • cooperative medical scheme
  • premium subsidy
  • contract

Cite this

@article{6cee4264b94a441ab983ba2795ff4bf7,
title = "Delivering universal health coverage for an aging population: an analysis of the Chinese rural health insurance program",
abstract = "There is now high level international commitment to the goal of universal health coverage. But how can countries make this a reality in the face of a limited budget and an aging population? Since 2008, China has been rolling out an ambitious reform program, which aims to achieve affordable health insurance coverage for all Chinese citizens. Under this reform program, Chinese living in rural areas are eligible to enroll in a subsidized scheme called the New Cooperative Medical System (NCMS). Using a three stage game model involving a government, a private fund manager and population, we explore the impact of population aging on NCMS. Our model highlights the role of government regulation and subsidy in ensuring operation efficiency of the system. We show that at optimality the government sets the operating framework for the fund manager to constrain the potential for monopoly profits. The Government subsidizes the scheme to prevent an adverse selection death spiral. However, the effectiveness of the subsidy in achieving this goal is moderated by the age structure of the population. Our model gives insights into the strengths of the NCMS framework and also can be used to support decisions about resource allocation and understand how scheme dynamics may unfold as the Chinese population ages further.",
keywords = "cooperative medical scheme, premium subsidy, contract",
author = "Wenhui Zhou and Yanfang Zheng and Alec Morton and Feng Luo",
year = "2018",
month = "12",
day = "31",
doi = "10.1016/j.chieco.2018.07.007",
language = "English",
volume = "52",
pages = "204--224",
journal = "China Economic Review",
issn = "1043-951X",

}

Delivering universal health coverage for an aging population : an analysis of the Chinese rural health insurance program. / Zhou, Wenhui; Zheng, Yanfang; Morton, Alec; Luo, Feng.

In: China Economic Review, Vol. 52, 31.12.2018, p. 204-224.

Research output: Contribution to journalArticle

TY - JOUR

T1 - Delivering universal health coverage for an aging population

T2 - China Economic Review

AU - Zhou, Wenhui

AU - Zheng, Yanfang

AU - Morton, Alec

AU - Luo, Feng

PY - 2018/12/31

Y1 - 2018/12/31

N2 - There is now high level international commitment to the goal of universal health coverage. But how can countries make this a reality in the face of a limited budget and an aging population? Since 2008, China has been rolling out an ambitious reform program, which aims to achieve affordable health insurance coverage for all Chinese citizens. Under this reform program, Chinese living in rural areas are eligible to enroll in a subsidized scheme called the New Cooperative Medical System (NCMS). Using a three stage game model involving a government, a private fund manager and population, we explore the impact of population aging on NCMS. Our model highlights the role of government regulation and subsidy in ensuring operation efficiency of the system. We show that at optimality the government sets the operating framework for the fund manager to constrain the potential for monopoly profits. The Government subsidizes the scheme to prevent an adverse selection death spiral. However, the effectiveness of the subsidy in achieving this goal is moderated by the age structure of the population. Our model gives insights into the strengths of the NCMS framework and also can be used to support decisions about resource allocation and understand how scheme dynamics may unfold as the Chinese population ages further.

AB - There is now high level international commitment to the goal of universal health coverage. But how can countries make this a reality in the face of a limited budget and an aging population? Since 2008, China has been rolling out an ambitious reform program, which aims to achieve affordable health insurance coverage for all Chinese citizens. Under this reform program, Chinese living in rural areas are eligible to enroll in a subsidized scheme called the New Cooperative Medical System (NCMS). Using a three stage game model involving a government, a private fund manager and population, we explore the impact of population aging on NCMS. Our model highlights the role of government regulation and subsidy in ensuring operation efficiency of the system. We show that at optimality the government sets the operating framework for the fund manager to constrain the potential for monopoly profits. The Government subsidizes the scheme to prevent an adverse selection death spiral. However, the effectiveness of the subsidy in achieving this goal is moderated by the age structure of the population. Our model gives insights into the strengths of the NCMS framework and also can be used to support decisions about resource allocation and understand how scheme dynamics may unfold as the Chinese population ages further.

KW - cooperative medical scheme

KW - premium subsidy

KW - contract

UR - https://www.sciencedirect.com/journal/china-economic-review

U2 - 10.1016/j.chieco.2018.07.007

DO - 10.1016/j.chieco.2018.07.007

M3 - Article

VL - 52

SP - 204

EP - 224

JO - China Economic Review

JF - China Economic Review

SN - 1043-951X

ER -