Demand for health insurance and demand for health care in rural China

In the wake of the collapse of the rural Cooperative Medical System in the early 1980s, efforts have been focused on initiating self-financed risk-pooled health insurance schemes in rural China. This study explores and examines important issues about the development of China's rural health insurance. The data consists of interviews with 2,105 heads of households and 233 countryside doctors, along with 8,848 individual health service surveys in 144 villages in eastern China. The interviews and surveys were conducted from February through May 1990.; This study used a survey instrument to quantify household demand for medical insurance and applied a two-part model to assess the degree to which the rural population could self-finance for risk-pooled schemes and the risk attitude toward financial loss during illness; it also used a minimum desired or acceptable income scale and regression analyses to estimate the minimum costs for an insurance scheme to contract a countryside doctor. Finally, the study used multiple regressions to analyze the effect of current rural insurance schemes on medical access.; The study finds that there is under-demanded for either outpatient or inpatient insurance in rural China. Only 63 percent of households would like to pay for outpatient insurance, and only 50 percent for inpatient insurance. The theoretical outpatient premium would merely cover 19 percent of the projected expenses. while the inpatient premium would only cover 75 percent of the actual expenses. The results show that income is a predominant and positive factor influencing households' demand for health insurance.; The study finds that 55 percent of countryside doctors would prefer private practice. Their desired income level for work under an insurance scheme is related to their total income and income from practice with an elasticity of positive 0.24 and 0.22, respectively. The existing insurance schemes improved the probability of outpatient access by 27 percent, also reducing their insured financial burden of outpatient and inpatient costs as compared to those self-insured.; The study concludes that the development of self-financed rural health insurance will be a slow process. Meanwhile, it confirms the positive and significant impact of the existing rural medical insurance schemes on improving access for the rural population.