Health Insurance Reforms in China YAN, FEI Prof., Chair, Dept. of Social Medicine School of Public Health, Fudan University fyan@shmu.edu.cn

Outlines General introduction Development of Health Insurance Schemes Challenges & Strategies

General introduction The goal of the health reform is to establish a primary health care and insurance system to assure that every citizen has equal access to affordable basic health care.

Health Insurance Reform URBMI The Urban Resident-based Basic Medical Health Insurance (starting since 2007) UEBMI The Urban Employee-based Basic Medical Health Insurance (launched in Dec. of 1998) NRCMS The New Rural Cooperative Medical Scheme (starting since 2003) MAF Medical Assistant Funds for vulnerable people (introduced between 2003 and 2007) Supplementary and commercial health insurance plans Public Welfare Health Insurance Public agencies Labour Health Insurance Enterprises Cooperative Medical Scheme Rural residents

Health Insurance Schemes Name Eligibilities Management Service package Source of fund UEBMI Urban employed, pensioners, & Self-employed workers Municipal Department of Human Resources and Social Security Outpatient and inpatient services The premium is collected in the form of a payroll tax, , 6% of which is provided by employers and 2% is contributed by employees. About 2000yuan in total. For self-employed, individual premiums. URBMI Children, students, elderly, disabled, other non-working urban residents The same as above inpatient services and catastrophic illness, outpatient services in some areas Premiums are pooled at the municipal or prefectural level, and contributed by individual premium and subsidy of government, government subsidies make up over 70 percent of the total fund.

Health Insurance Schemes Name Eligibilities Management Service package Source of fund NRCMS Rural registered residents County NCMS office Outpatient and inpatient services The premium is from individual premium and subsidy of government including local and central government, government subsidies make up over 80 percent of the total fund. The premium for poor is by government. Medical Assistant Vulnerable people Civil Affairs Department Outpatient and inpatient services. additional reimbursement after general insurance. The fund is from special budget by government

Development of NRCMS History The RCMS was initiated in the late 1950s in China. RCMS was developing significantly in the 1960s and 1970s, covering around 90% of Chinese villages by end of 1970s, which were jointly funded by individual contributions and the co-operative economy.

Unfortunately, RCMS collapsed in most places of China in the mid 1980s when China’s agriculture sector was privatized. Only about 5-10% of the Chinese rural population, mostly in the richer eastern coastal areas, were still covered by RCMS during the 1990s.

Development situation In 2002 the Central government sponsored a national conference on rural health development in which a document “Decision on further strengthening rural health development”. The Decision proposed the establishment of new RCMS with financial support from the central government to reduce the number of people living in poverty that is caused by serious illnesses and the payment of expensive medical care. The NRCMS was launched in July 2003 in over 300 counties.

Enrolment For expanding population coverage, a number of strategies have been implemented, including: To increase government subsidies. To increase awareness of the families about benefits of the schemes. - To change the individual-based to family-based enrolment policy. - To simplify procedures of enrolment and reimbursements. - To change timing for premium collection. - To extend scope of services and benefit package to attract people.

Enrollment rate (%) (%) Data from: China health statistics yearbook 2008,2014,2015

Management of NRCMS Implementing a finance mechanism of a combination of government financial assistance, rural residents enrollment premium, and collective economy support Transferring payment by the public finance to the middle and western China Aiding the poor rural residents to join in the NRCMS and get additional subsidy from the Ministry of Civil Affairs Taking the county as a pooled unit to enhance the risk pooling ability

Embodied the main function of the government in the development of the NRCMS The State Council established a joint-ministry meeting system Guaranteeing the structure of the NRCMS organization and leadership, and a sound running mechanism.

Benefit Package of the NRCMS (by the end of 2008) Pooling fund offers to inpatient care for all enrollees, with family medical savings accounts for outpatient care (58.3%) Overall pooling fund offers to both inpatient and outpatient care for all enrollees. (32.2%) Overall pooling fund offers to inpatient care (9.4%) now Outpatient pooling fund extended Reimbursement proportion 50% outpatient care, 75% inpatient care

The catastrophic diseases covered by NRCMS in most areas 2011 Congenital heart disease of children Acute leukemia of children Breast cancer Cervical cancer Severe mental illness End-stage renal disease Multidrug-resistant tuberculosis Opportunistic infection of AIDS 2012 Congenital heart disease of children Acute leukemia of children Breast cancer Cervical cancer Severe mental illness End-stage renal disease Multidrug-resistant tuberculosis Opportunistic infection of AIDS Lung cancer Esophageal cancer Gastric cancer Colon cancer Colorectal cancer Chronic myelogenous leukemia Acute myocardial infarction Cerebral infarction Hemophilia Type Ⅰ diabetes hyperthyroidism Cleft lip and palate 2010 Congenital heart disease of children Acute leukemia of children

Increasing of premium level of NRCMS Yuan Increasing of premium level of NRCMS 16

million person-times Reimbursement proportion 50% outpatient care, 75% inpatient care Data from: China health statistics yearbook 2008,2014 17

Financing and expenditure of NRCMS a hundred million http://www.china.com.cn/aboutchina/data/ylws/2007-12/17/content_9393652.htm Financing and expenditure of NRCMS Data from: website of the National Bureau of Statistics

Progress of UEBMI Million people 19 Data from: China health statistics yearbook 2008,2014,2015 19

Progress of URBMI Million people 20 Data from: China health statistics yearbook 2008,2014,2015 20

（million person-times) Progress of MFA （million person-times) Data from: China health statistics yearbook 2008,2009,2014,2015 21

Health care untilisation 2003 2013 rural urban Outpatients visit rate（%） 13.9 11.8 12.8 13.3 Un-visit rate (%) 45.8 57.0 22.0 32.9 Hospitalization rate during last year (%) 3.4 4.2 9.0 9.1 Un-hospitalization rate (%) 30.3 27.8 16.7 17.6 Data from: China National health household survey

Challenges Disparities in fund and benefit packages between the schemes. Lack of mobility for the rural migrants. Inefficiency in operation of the schemes. Limited capacity for financial protection. Cost escalation (providers & users). Poor quality of medical care.

Policy options To unify the three health insurance schemes. To use cross-region settlement To raise fund pooling level to increase financial protection. (prefectural, provincial level) To adjust the contribution between government and individuals.

Policy options To strengthen capacity of management and administration of the schemes. To use provider payment systems to enhance efficiency performance and quality of care of the schemes. Cost containment (monitoring, payment methods)

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