A Research On Total Health Expenditure And Allocation Of Health Resources In China

It has been an outstanding problem for people to see a doctor difficultly and expensively. A report from the State Council Development Research Center writes, the failure of health system reform lies in inequity and inefficiency of the allocation of health resources. The root of difficulty in seeing a doctor and the high cost of getting a treatment, lies in the same fact that the allocation of health resources lacks equity and efficiency.The quantity and structure of the Total Health Expenditure (THE) shows how health resources are allocated in a country or an area .It helps us to analyze the relationship among the health cause, the national economy and the health demand, and assess the equity, effectiveness and efficiency of health policies. By means of quantitative and structural analysis, theoretic and empirical analysis, the paper analyzes and assesses the allocation of health resources in China. This paper consists of five parts:Partâ… : Introduction. At the beginning of the chapter, the paper briefly introduces the THE in China, and then defines the fundamental concepts that concerned. Finally, the paper makes a brief review of relevant studies on THE. These studies are divided into five groups categories, that is, the calculation of THE, influencing factors of THE, the dynamic relationship between THE and GDP, allocation equity of THE, and allocation efficiency of THE.Partâ…¡: Analyzing the elasticity of THE. First, the paper studies the basic characteristics of five time series, that is to say, THE, GDP, the public health expenditure, the social health expenditure, the out-of-pocket health payment. Second, the paper researches the dynamic relationship between THE and GDP since the reform and opening policy in the way of calculating the income elasticity of THE, and forecasts the proportion of THE in GDP reaches 8% in future years.In addition, the paper calculates the price elasticity and income elasticity of medical service or healthcare, which can be regarded as a standard commodity for all Chinese people. According to the econometric model, the price elasticity and income elasticity of medical service both are about 0.36, which means healthcare is not a luxury but a necessity in China. Because of low price elasticity and income elasticity of medical service, Chinese government should undertake more responsibilities in providing the public health service and basic medical services, improve and strengthen the price regulation of medicines and medical services. Partâ…¢: Analyzing the structure of THE. The paper studies the financing structure and distribution structure of THE in China. For the financing structure of THE, the problems lie in that, because of government weakening the responsibilities in providing the public health service and basic medical services, the proportion of public health expenditure in THE is extremely low, while the proportion of out-of-pocket health payments in THE is excessively high. The structural problems of the distribution structure of THE in China can be summarized as follows. First, the proportion of medical expenses relative to public health expenditure is excessively high; second, the excessive increasing drug expenditure occupies such a big part in THE ; third, the distribution of THE among different areas and different groups is not balanced. At the end of this part, the paper concludes that, the structural problems of THE in China have not only restricted the allocation equity of health resources, but also the allocation efficiency of health resources.Partâ…£:THE and economic growth. The paper calculates the output elasticity of the heath capital which formed by health expenditures or health investment.According to the econometric model, the output elasticity of the heath capital equals to 0.24, which lies between the output elasticity of the material capital and education capital, the former is 0.52 and the latter 0.13. At the end of this part, the paper concludes that it is necessary for Chinese people to extend the investment of healthcare and education, which is helpful for us to speed up the accumulation of human capital, accelerate economic growth, as well as promote the transformation of economic growth mode.Partâ…¤: Relative policy suggestions. Based the above analysis of the dynamic relationship between THE and GDP, as well as the structural problems of THE, the paper brings up much constructive advice for the new health system reform. Firstly, the government, the society and the individual should undertake respective responsibilities for financing healthcare expenditures; secondly, promoting a much more fair distribution of health resources among different areas and different groups; thirdly, perfecting the public health system, and forming a rational proportion of investment between treatment and prevention; fourthly, improving and strengthening the price regulation of medicines and medical services, controlling the excessive increasing drug expenses.