| Background and ObjectivesThe Rural Cooperative Medical System (RCMS) has great significance inensuring health care for rural residents, so as to protect rural productivity andcontribute a lot to sustainable economic development in rural areas, finally maintainsa harmonious society. That also means, in order to improve health protection amongrural population and reduce the risk of medical expenses, it is necessary to keepRCMS implementation in effective and sustainable way, And adequate measurementof financing demand and mechanism of dynamic financing growth is the prerequisitefor a long-term RCMS.Measurement of financing demand is one of the most critical factors, whateverto make up new scheme for certain region without cooperative medical system ormodify established schemes for piloted regions. To some extent, currently fixedpremium standard has nothing to do with medical needs of the demand sides, whichmight lead to imbalance between collection and reimbursement. There incursconcerns over RCMS, in one hand over-fund leaves unused and unwanted economicburden, the other hand limited protection due to insufficiency of fund weakensattraction for rural people. During the implementation of pilot spread, RCMS getsinto a hobble because of absence of adequate measurement techniques. The difficultproblems lie in relationship between insurance premium and actual medical demand,as well as how to measure financing demand and keep up with dynamic tendency,which brings risks for development of RCMS.This study is to outline systematic analysis of RCMS's financing demand andexplore scientific measuring methods and processes. With betterment and integrationof established techniques of eliminating impoverishment due to medical expenses, webuild quantitative methodology to measure financing demand. Then data fromhousehold survey are applied to validate feasibility of the methods, which providemethodology reference for policy-makers to figure out actual medical demand andestablish sound premiuln standard, contributing to drawing up a scientific collectingand reimbursing scheme. Materials and MethodMethods employed in this research include literature epagoge, household survey,focus group discussion, second-hand data collection, logic deduction and mathematicmodel analysis and simulation demonstration, etc. Combined with qualitative andquantitative methods, we build systematic analysis framework that illustrates logicstructure of financing demand, based on which establish mathematic models to makeout relationship between medical risks and financing demands, compute soundpremium standard and project it's dynamic tendency. Data from household survey insample regions are applied to verify feasibility of the measurement method.This study choose middle-income regions as sample of survey, including Jiadingin Shanghai, Weifang in Shandong and Changzhou in Jiangsu, Which cover 3provinces, 10 counties, 49 township, 166 villages with sum of 9767 households andnumber of rural population accounting to 32355. All data of household survey arecollected and analyzed to simulate measurement of local financing demand.Main Results1. Establishment of qualitative analytic models of financing demand of RCMSBased on policy aims of RCMS and principles of insurance, we illustrate thepositioning of RCMS. In view of farmer's primary medical needs, insurance coverageof RCMS should consist of two parts, one is primary needs of catastrophic diseasesand the other is basic needs of common diseases. With systematic analysis, it isexpatiated clearly that logic relationship between various of medical needs andfinancing demands, also identified measurable index and funding structure, etc. Thesystematic framework involves two submodels, one is for primary financing demandand the other for complementary financing demand.Primary financing demand aims at medical services of both catastrophic andcommon diseases. Catastrophic diseases is specialized those ones turning intoimpoverishment due to medical expenses, with measurable index as threshold ofimpoverishment caused by diseases, extent of impoverishment and premium, etc.Financing demand of common diseases is reflected through manpower costs of thesupply sides, namely the baseline of maintaining operation of medical institutions,with measurable index as demand number of medical staff and salary level, etc. Thereare three major funding sources: subsidies from higher-level government, the collective welfare fund and premium from individuals. As for catastrophic diseases, interms of higher risk and lower probability, devotion by government should lead thedominant proportion and encourage participation of more rural residents. Whilecommon diseases have characteristic of lower risk but higher probability, individualcontribution should be emphasized.Complementary financing demand aims at non-primary medical needs. First ishospitalized risks of expense sects related to middle income under theimpoverishment threshold; the second is considered fund gap of medicine expensesrelated with common diseases. Furthermore, some special groups are taken intoaccounts, such as the poor group and population of higher risk in medical services.The former take on double burden of the premium and medical expenses, the latterbear high medical risks in probability and cost loss compared to average standard,which should be supplemented by specialized insurance schemes.The concept of financing demand for RCMS has inner hierarchy: medical needsof catastrophic diseases is the primary protection, named minimum financing demand;the second is needs of common diseases, which makes up of primary financingdemand together with minimum financing demand; complementary financing demandis reasonable expansion of primary financing demand, which is out of the focus ofRCMS. Moreover, many factors including economic growth, population aging,expansion of insurance coverage, have impact on change of financing demand,showing self-growth with the same protection level and dynamic alteration withenlargement of protection level.Applying data via survey of farmers' willingness, concerns on impoverishmentdue to medical expenses turn into the top problem of health care in all three regions.Most people choose protective scheme of catastrophic diseases or both catastrophicand common diseases, which united with amount to 93.5%, 95.0% and 81.5%respectively in three regions. The result is in accordance with identification ofprimary financing demand that comprises medical needs of catastrophic as well ascommon diseases.2. Establishment of quantitative measurement of financing demand for RCMS(1) Measurement and simulation of catastrophic diseases' financing demandBased on former critical techniques such as confining of impoverishmentthreshold, measurement of impoverishment due to medical expenses, static and dynamic premium metrical methods, we build interactive model of "expensesect-RR-impoverishment caused by diseases-reimbursing rate-premium", definerelationship among impoverishment caused by diseases, insurance coverage andpremium, resulting in measurement method of minimum financing demand forcatastrophic medical needs.Exemplified with simulation of sample region 1, it needs 98.85 YUAN percapita, which is equivalent to 1.25% of local average annual income per capita, toeliminate impoverishment caused by diseases. If taken out the top 20% richpopulation, according to adjusted impoverishment threshold, premium grows to129.62 YUAN per capita, reaching 1.63% of average yearly income per capita.Considering reimbursement range and rate, for example, with 80% expense rangereimbursed and 70% of reimbursing rate, premium turns down to 55.4 YUAN (equalto 0.7% of average yearly income) and 72.6 YUAN (equal to 0.9% of average yearlyincome) for deduction of top 20% rich people, which is bearable to average ruralpopulation. Simulation computation testifies rationality and feasibility of themeasurement method of minimum financing demand.(2) Measurement and simulation of common diseases' financing demandThrough analysis of major operational costs required to maintain the supply sides,we infer that the most basic financing demand should match expenditure of manpowercosts, and establish measurement method of common diseases' financing demand forRCMS.Using data from the third nation-wide health service survey, common diseases'financing demand, in view of medical staff, arrives at 119.3 YUAN and 43.4 YUANper capita respectively, which take on different standard of average manpower cost,the former with average expenditure per staff of medical institutions and the latterwith average salary of state organizations. To developed regions, such premiumstandard is acceptable according to local income level. But to regions of low income,it might be more feasible and rational to count average manpower cost with averagesalary of state organization.3. Measurement and simulation of complementary financing demandBesides minimum and primary financing demand, how to make out the priorityor ranking of other variety of hospitalized risks. The same with former criticaltechniques-measurement of hospitalized economic risks, defining the poor population and people of high risks, also building dynamic model of "expensesect-RR-reimbursing rate-premium", we find out interactive relationship among othermedical risks, insurance coverage and premium, so as to define supplementarymedical needs of rural residents.Exemplified with sample region 1, it amounts to 58.62 YUAN per capita (equalto 0.74% of annual income per capita) to resolve risks of expense sects from averageincome to impoverishment threshold, while to risks of expense sects from "50%～" to"90.0%～100.0%" of average annual income, premium turns into 82.36 YUAN percapita, equivalent to 1.04% of average income. How to decide expanding range ofprotective coverage depends on local economic capability of fund collection.4. Projection model of financing demand for RCMSProjection model of self-growth of financing demand is grounded on dynamicpremium measurement to forecast change tendency in near future. If no change ininsurance coverage, primary financing demand is affected by consumer price indexand income growth from the point view of the demand-side. As for change inprotection, both expansion of coverage and reimbursing level are to be accounted for.Coverage expansion first takes expense sect risks of people with middle to lowincome. If collecting capability permitted, supplementary demand of commondiseases and special group also could be covered. Reimbursing level involvesenlargement of reimbursement structure and increase of reimbursing rate, leading togrowth of dynamic premium wanted.According to data of sample region 1, in 5 years, premium per capita forself-growth of minimum demand raises from 55.4 to 66.8 YUAN in 80% expensesreimbursed with reimbursing rate of 70%, while for top 20% rich population'sdeduction, the result is from 72.6 to 87.6 YUAN. The accrual of common diseasedemand, 5 years later, increases from 119.3 to 144.0 YUAN in average staffexpenditure of medical institutions, with 43.4 to 52.4 YUAN in average salary of stateorganizations. Premium growth after protective level increase is reckoned on differentcombination of enlargement of insurance coverage and augmentation of reimbursinglevel.Simulation of demand growth forecast shows that fixed amount of premium levelwould definitely lag behind dynamic growth of people's medical needs, running fundpool of RCMS into imbalance of colleting and paying. Major exploration and innovation1. Employed systematic analysis and logic deduction, founded on basic principles andideas of community sharing, we explore character and positioning of RCMS undermacro environment of the whole rural insuring system. It is illustrated that insurancerange of RCMS should give attention to both catastrophic and common diseases'primary medical needs.2. Focus on point view of the demand-side, we find out intersection of insurancerange of RCMS and primary medical needs for rural people, and define connotationand extension of the concept of financing demand, so as to establish qualitativeanalytic framework of financing demand. That model expatiates directly relationbetween primary medical needs and financing demand, interprets hierarchy ofdemand that comprises of minimum, primary and complementary financing demand,and outlines tendency of demand growth. Qualitative framework provides logicmindset and theoretic base for quantitative study and methodology of measurement.3. Measurement method of financing demand systematic integrates multi-technique,such as defining of impoverishment threshold, measuring impoverishment caused bydiseases, hospitalized economic risk scale, restive and dynamic premium computation,identification of special groups. Among that we also improve single techniqueincluding establishment of impoverishment threshold and premium calculation, andmake up interactive relationship of critical index, "expensesect-impoverishment-RR-reimbursement structure-reimbursing rate-premium".4. We define measurable index for minimum impoverishment and complementaryfinancing demand, present that manpower costs reflecting common diseases' primarydemand, so as to establish measuring method for minimum, primary andcomplementary financing demand. Via analysis of factors affecting change ofpremium demand, projection model of premium growth is applied to forecasttendency of various financing demands.5. Qualitative and quantitative measuring method for financing demand providesmethodology sustentation for scientifically making up of premium standard, contributes to improvement of financing mechanism, and conduces to achievement ofpolicy objectives and sustainable development of RCMS. Both of the analytic mindsetand framework could be used as references for research in urban insurance systemdesign.
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