| 1. Background and ObjectivesThe health care sector is a major livelihood issue, as it is closely related to the health of billions of people and the happiness of every household. However, unaffordable and unnecessary medical care has been complained more and more frequently. The problem in the drug market that expensive drugs sold well was still serious. Our earlier research found that affordable medical care should be given priority.The problem has caused serious consequences to the society. On one hand, it caused the abnormal speed of health expenditure growth and affected the balance of health insurance; on the other hand, the over-rapid growth of health expenditure increased the burden of medical costs of the general public and aggravated the poverty caused by illness, making the problem " seeing a doctor is expensive " more serious. Medical institutions complained that the money provided to health was inadequate and the fee standards were very low. Medical security departments worried about the quick rise of medical expenditure and the disequilibrium of the fund. The governments worried that the problem of " seeing a doctor is expensive " might endanger the harmony and stability of the society.The governments have paid much attention to the problems and promulgate policy which has oriented the development of the health system in order to solve them. But how to reform? How to solve the problem of social repercussions entirely? There are still some questions to answer:What variables affect health care expenditure and its constitution? What is the future trend of the Chinese health care expenses? How to conduct scientific prediction? How to simulate the relationship between health care expenditure and its constitution and the factors?The objective of the study is firstly to explore the variables that affect health care expenditure and its constitution. And then use the panel data model of 10 provinces to analyze the relationship between health care expenditure and its constitution and the factors. On this basis, we use the database to predict health care expenditure and its constitution of 2015 in China. Finally, we make a comparison between the predicted expenditure and constitution of 2015 and the expenditure and constitution of the international experience. 2. Materials and MethodsThe macro model of health system was selected as the principle methods, and selected the panel data model as the applied research method. The framework and thinking of the quantitative study of health care expenditure and its institution in China formatted on the basis of preliminary research of the total project.The data used in the study was collected mainly from statistics including China Statistical Yearbook, China Health Statistical Yearbook, China Population and Employment Statistics Yearbook and health accounts funding information of the year from 2002 to 2010, and China Total Expenditure on Health Report published by China Health Economics Institute from 2009-2010.Then we collated those data collected from these statistics to be a database which could be analyzed directly. After Unit Root test, data conversion and confirming the lag period, we analyzed the relationship between health care expenditure and its constitution and the factors, and then predicted health care expenditure and its constitution of the year 2015.3. Main Results3.1 The factors which affected health care expenditure and its constitutionAfter using the keywords "health care expenditure", "influence factors" and " out of pocket spending " and their combination to search literatures in the CNKI database since 1979,we found that there were a lot of factors that affected health care expenditure and its constitution, such as GDP, population proportion of people over 65, population proportion of people below 14, the government budget health spending, social health spending, population, fiscal revenue, fiscal expenditure, the number of doctors, infant mortality, urbanization concentration, health care expenditure, basic medical security plan of urban residents, consumer price index, Chinese and western medicines and health supplies price index, medical institutions per thousand population, the intensity of health service, per capita health cost of hospital patients, per capita health consumption level of each rural resident, per capita health consumption level of each urban resident, per capita disposable real income, consumption level, rural consumption level, urban consumption level, the end of urban and rural residents RMB savings deposit balance, life expectancy, chronic disease, social insurance coverage. The factors distributed in structure submodule, process submodule, result submodule, and the external environment submodule including population needs submodule, social economy submodule, politics submodule, etc. After the comprehensive consideration of expert consultation and the principle of comprehensive, scientific, able to be evaluated, systematic and representative demonstration,we finally decided to classified the factors which were put in the equation into 5 dimensions:economy dimension which included per capita GDP, per capita disposable real income of urban residents, per capita disposable real income of rural residents; demography dimension which included population, population proportion of people over 65, population proportion of people below 14; structure dimension which included the proportion of the government budget health in financial expenditure; process dimension which included per outpatient service charge and per hospital service charge; result dimension which included maternal mortality and perinatal mortality.3.2 The process and result of model building3.2.1 The process of model buildingBased on the unit root test,we found that there were several stable factors which included the proportion of out of pocket spending, maternal mortality,wai births mortality, population, population proportion of people over 65, population proportion of people below 14, per outpatient service charge,and per hospital service charge. Other variables were unstable and should be transformed before putting into equation.Per capita GDP had lagging effect to health care expenditure and its constitution. We found the lag period was 1 according to the Akaike s Information Criterion and the Schwarz Criterion. On this basis, we determined the general format of the model according to the F statistics and the influence form according to the Hausman tests. Then we built the equation of the relationship between health care expenditure and its constitution and the factors.3.2.2 The result of the model buildingThe equation of the relationship between the total health expenditure in GDP and its influencing factors was simulated by fixed effect model as:αi* is the difference of each cross section. LNH is the logarithmic transformation of total health expenditure in GDP. LNGDP is the logarithmic transformation of Per capita GDP, while LNGDP(-1) is the logarithmic transformation Per capita GDP lagged 1 period. LNO is the logarithmic transformation of the proportion of the government budget health in financial expenditure. MM is the maternal mortality. OL is the population proportion of people over 65. FF is per hospital service charge.The result suggested that per capita GDP lagged 1 period, the proportion of the government budget health in financial expenditure, population proportion of people over 65, per outpatient service charge had a positive effect on the total health expenditure in GDP, while per capita GDP and maternal mortality had a negative effect.The equation of the relationship between out of pocket spending and its influencing factors was simulated by random effect model as:αi* is the difference of each cross section. OOP is the proportion of out of pocket spending. LNGDP is the logarithmic transformation of Per capita GDP, while LNGDP(-1) is the logarithmic transformation Per capita GDP lagged 1 period. LNO is the logarithmic transformation of the proportion of the government budget health in financial expenditure. MM is the maternal mortality. OL is the population proportion of people over 65. FB is per ouypatient service charge.The result showed that the proportion of the government budget health in financial expenditure, and per outpatient service charge had a positive effect on the proportion of out of pocket spending.3.3The prediction of health care expenditure and its constitution and the gap between the prediction and the international common experienceWe can predict Chinese health care expenditure and its constitution of 2015 according to the building model. Total health expenditure in GDP will be 6.5% in 2015, higher than 6.0% according to the international common experience which was drawn from the 113 countries of which the performance of Health system was better than China. The proportion of out of pocket spending of China will be 35.7% in 2015, lower than 38.5% according to the international common experience. But it should be paid attention that the result is based on the increasing investment on health these years. If the investment is decreased, the goal be achieved is not certain.4. Conclusion4.1TotaI health expenditure in GDP of China was still low, and there was a large gap between different regionsThe annual growth speed of total health expenditure is 16.6% from 2001 to 2009, quicker than the growth of GDP 15.2%. Total health expenditure in GDP of China in 2007 was only 4.3%, ranked 149 in the 191 world countries, which is lower than that of 2000. Although total health expenditure in GDP worldwide kept a higher proportion and rising trend, China's total health care expenditure remained in a comparatively low level, below 5.5 percent all the time. This showed that Chinese health expenditure had not break the social payment ability and still has larger growth space.Total health expenditure in GDP of 2015 will be 6.5%, higher than that of the international experience. But it should be paid attention that the result is based on the increasing investment on health these years. If the investment is decreased, the goal be achieved is not certain. Therefore the key of the health reform is to make sustainable development of the health expenditure.Meanwhile, there was a large gap between different regions. Total Health Expenditure in GDP of underdeveloped region, such as Gansu, Yunnan, Xinjiang, was higher than the average and had a rising trend. While Total Health Expenditure in GDP of developed regions, such as Shanghai, Zhejiang, Tianjin, Guangdong, Fujian, was lower than 5.0%.4.2 The proportion of out of pocket spending was still higher than that of the government and the social spending, and there was a large gap between different regionsThe proportion of out of pocket spending of China in 2007 was 55.3%, leading China to be one of the countries in the world with the highest individual proportions, ranked 46 in the 191 world countries. The proportion of out of pocket spending was 38.2%at the large financial investment condition in 2009, higher than that of Cuba, the Czech republic, the Netherlands and Britain in 2007.Meanwhile, there was a large gap between different regions. Shanghai, Fujian, Gansu shared a lower proportion of out of pocket spending, and the proportion of Shanghai was even lower than 30%.While Jilin, Heilongjiang, Guangdong shared a higher proportion, higher than 40%.4.3 Health sector did not benefit equally from the development of economyPer capita GDP had a negative effect on the total health expenditure in GDP, while Per capita GDP lagged 1 period had a positive effect. The result that the negative coefficient is larger than the positive coefficient suggested that the development of health service lagged behind the economy although the government enlarged the investment on health.4.4 Raising the proportion of government health spending in financial expenditure is the inevitable way to solve the problems of "seeing a doctor is expensive"The proportion of out of pocket spending in 2015 will be 35.7% according to the trend of 2001-2009. It is hard to achieve the goal that the proportion of out of pocket spending decreasing to 30.0%. Therefore, the government should invest more money to health to achieve the goal.If we are ready to decrease the individual proportion to 30.0% in 2009, what we should do is increasing 492.1 billion yuan to the health, and the total Health Expenditure in GDP of China will be 6.4%.If we are ready to decrease the individual proportion to 30% in 2015, what we should do is increasing 890.7 billion yuan to the health on the basis of 170.7 billion yuan, and the total Health Expenditure in GDP of China will be 7.7%.
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