The Study Of Solutions To The Contradiction Between Supply And Demand Emerging From The Implement Of New Rural CMS

The difference between new and old-type rural CMS is the leading role of thegovernment, the intervention to the problem of Health Care System in Rural Areas is tomaintain the social equity, In fact, as a mean to change peasants’ medical purchasing power,New Rural CMS does not obey the principle of efficiency and the well running of thesystem will bring fairness and efficiency. Through several years’ operation of New RuralCMS, a certain protection effect has been obtained. However, due to the design flaws ofthe system, it led to the contradiction between supply and demand gradually.In this case, based on the theories of welfare economics, health economics,information economics and so on, this study firstly elaborates the causes of thecontradictions between supply and demand by analyzing the theories of government andpeasants’ behavior. At the same time, it verifies the operating efficiency of the systemwhich depends on the investment from the government and peasants by the use ofLagrange formula. Secondly, this study establishes the models of contradictions betweensupply and demand (Two main models of adverse selection and the utility of Co-paymentinsurance). What’s more, it further probes into the solutions of the contradiction betweensupply and demand through establishing the model of separating equilibrium. On the abovebasis, the study analyzes and proves the contradiction between supply and demand in theprocess of implementing New Rural CMS, which are the problems of adverse selection anddeficiency of the protection of the system, it also discusses the reasons led to thecontradiction between supply and demand from system designing aspect. Finally, thisstudy suggests some solutions under the guidance of theory model and the real worldpractices, especially the introduction of separating equilibrium model. The conclusion ofthis study: to solve the contradiction between supply and demand depends on theinnovation of the system. As a matter of fact, the contradiction between supply and demand that discussed inthis study treats New Rural CMS as a product, which means the real contradiction is theone between the government (the supplier) and peasants (demanders) rather thancontradiction between supply and demand produced by the system. In order to make thepeasants get adequate insurance without increasing the burden of the government is thebest optimization balance point between suppliers and demanders. It accords with the basicprinciple of the combination of government endowment redistribution and competitivemarket that emphasized in welfare economics, for which lays emphasis on perfecting thesystem so as to increase peasants’ purchasing power and realize fairness and efficiency.New Rural CMS insures peasants’ benefits from two aspects: degree of protection and thetypes. Because the system is operated by following most of the principles, reverse selectionwill influence the degree of peasants’ insurance, and voluntary insurance mechanism aswell as serious diseases insurance oriented concept will increase peasants’ reverse selection.In this case, this study suggests that both serious and minor diseases should be insured anddual pooling patterns（Hospital and Outpatient Pooling）should be insisted. Separatingequilibrium model of payment classification and grading compensation which emphasis onthe dual responsibility of the government and peasants also should be adopted. In addition,exploring the interconnection settlement approach of migrant workers’ remote medicalcosts to increase their willingness of joining the insurance and gradually transfer it to acompulsory involvement can solve the contradiction between supply and demand in theprocess of implementing New Rural CMS and to put the insurance function of the systeminto full play.