Income And Medical Services And Its Flexibility

With reform, opening-up and economic development, the living standards improved to a large extent and medical costs increase rapidly. The urban-rural dual economic structure, urbanization, transition of medical policies from government, and the aging people are influencing factors for medical expenditure.the paper is based on Grossman's heath capital model of demand for health, employing panel data from 31 China provinces between 2003 and 2008 to analysis medical expenditure and its influencing factors with a model employing the empirical method of considering income and other factors. Based employs the empirical method of measuring income elasticity while considering other factors. Based upon reality, the thesis calculate the elasticity of medical expenditure more accurately, dividing provinces into three groups as high, middle and low income group, adding controlling variables such as urbanization and bed utilization rate.Results show that there is difference of income elasticity of medical expenditure between cities and rural areas. The elasticity in rural areas is greater than that in cities the elasticity of cities in high income group is greater than low income group; the income elasticity of rural areas shows no significant difference between groups. After considering urbanization, the income elasticity has dropped dramatically and shows a positive relation. The number of doctors correlates the medical expenditure in cities positively, but shows no significant relation in rural areas. Aging index shows no significant relation in cities, but correlates positively in rural areas.Finally, this thesis suggests:improve social security system, put more emphasis on low income group; strengthen supervision upon medical facilities; protect medical benefit of workers from rural areas in the process of urbanization;improve marginal efficiency of rural medical care, alleviate the medical care burden of rural residents.