A Study On The Effect Of New Rural Cooperative Medical Service Payment Reform On Medical Expenses

As economy develops, the Chinese citizens’ life quality continues to improve, andthe medical expenses increase as well. Because of multiple reasons, medical expenses inChina showed a tendency of excessive growth recent years. Studies indicated that theunscientific medical insurance payment system played an important role in inducing theexcessive growth of medical expenses. At present, a payment called FFS(short for “FeeFor Service”), is still under operation in most parts of China. FFS has been provedunscientific, and will stimulate the doctors to create induced demand. As a result, themedical expenses will increase excessively.The Ministry of Health carried out a scheme aiming to reform New RuralCooperative Medical Service Payment System. Many districts have drafted regulations.This thesis consists of six chapters, focuses on the reform of New Rural CooperativeMedical Service Payment System and its impact on medical expenses. Chapter1isintroduction, illustrates the background of this study, points out that the New RuralCooperative Medical Service Payment System needs reforms urgently, introducesformer research on this subject, then defines two concepts, lists research methods of thisthesis. Chapter2illustrates the evolution of New Rural Cooperative Medical ServicePayment System, analyses its status quo. By applying Game Theory, Chapter3constructs two complete information static game models, one between the doctor andthe insurer, the other between the doctor and the patient. Then we will analyze thechanges of their behaviors and consequent impact on medical expenses. Chapter4analyzes the questionnaires which were filled in by the insured of New RuralCooperative Medical Service in Shengzhou, explores how the medical expenses change,whether the outcome coincides with the conclusion in Chapter3. Then, Chapter5introduces medical insurance payment systems in UK, Germany, United States, thencompares ShengZhou New Rural Cooperative Medical Service Payment System and thethree above. Finally, a conclusion together with some relevant suggestions is come up inChapter6.By constructing complete information static game models between the doctor andthe insurer, the doctor and the patient, this dissertation concludes: when pre-paymentsystem is adopted, in order to maximize his utility, the doctor tend to not create induceddemand. So, to some extent pre-payment system plays a positive role in slowing downthe excessive growth of medical expenses. Analyzing the questionnaires, found that after the payment system reform, the average medical expenses and the averageoutpatient service expenses both decrease. The result coincides with the conclusionfrom the game models.