Research On Regional Inequality Of The New Rural Cooperative Medical Care System Based On Two-stage Nested Theil Decomposition Method

Since the pilot and implementation of New Rural Cooperative Medical System (NCMS) in 2003, it has achieved a lot of success, such as a comprehensive coverage of the rural population, the significantly increased financing fund and so on. However, there are still some defects in the NCMS, such as the level of financing and compensation is still lower compared to the farmers’medical cost, the increasing farmers’medical costs because of the shortage of basic medical and health service resources, the increasing difference of fiscal health expenditure due to the unbalanced level of regional social and economic development, which expanding the horizontal inequality of NCMS. The inequality of NCMS is the most important question in those questions, which could directly affect famers’enthusiasm and damage their rights to enjoy the service of the medical security. As a result, we must focus on solving the inequality of NCMS when the development of the NCMS reached a relatively stable stage.Firstly, based on the literature review at home and abroad, this paper uses descriptive statistics to analyze the inequality of the NCMS. Through comparative analysis, it is found that there is obvious inequality in the financing and benefit of the NCMS. Due to the ability of local government fiscal spending differences that the NCMS financing and compensation policies are different between geographical proximity cities or provinces. The rights and interests of the farmers to enjoy the medical services are quite unequalSecondly, in order to further study the causes of the inequality of the NCMS financing and compensation, this paper use the NCMS data based on the cities. The whole country is divided into three parts, which are three zones, provinces in each zones and cities in each province. It use a second stage decomposition method of Theil index to measure the inequality of each part. As a result, it was found that the difference between provinces is the main cause of the NCMS inequality, the contribution rate reached at 70.74% in 2013. And the cities’difference is the second reason which contribution rate reached at 20.13%. The difference between three zones makes the least influence to the inequality.Thirdly, in view of the main cause of the NCMS inequality (difference between provinces), this paper try to find out the influence factors in the expansion of the differences through empirical research. This paper uses the CLAD estimation method to make regression analysis. The factors include inter regional differences in economic development, rural development and the local government fiscal expenditure structure. Finally, it was found that all of these factors can influence the inequality. And the differences of economic expand the inequality. The improving of rural economy can reduce the inequality. The higher proportion of health care expenditure, the smaller the inequality of the NCMS.Finally, this paper analyzes and summarizes the empirical results, and puts forward relevant policy recommendations. Including regional economic development strategy, urban and rural development proposals, fiscal expenditure structure adjustment, basic medical and health service resources.