The new rural cooperative medical system is a major policy introduced in the context of the government's ongoing efforts to solve the "three rural" problem and build a harmonious society. The focus is to help farmers reduce the financial burden caused by major diseases, the policy goal is to reduce the rural population "poverty due to illness" and "return to poverty due to illness" phenomenon. Since the launch of the pilot new rural cooperative medical care system in 2003, the number of pilot counties (cities and districts) in which the system was first launched has risen from 304 to 333 in 2004. By the end of June 2005, 641 counties (cities and districts) nationwide had launched the pilot program, with 163 million farmers participating in the cooperative medical care system.
Recently, the central decision-making level to further reveal the accelerated launch of this pilot policy of bold determination. 2005 September held a "new rural cooperative medical care pilot work conference" decided: 2006 will be the pilot counties? City, district? The number of pilot counties, cities and districts will be expanded from the current 21% of the country's total to about 40%, and a new rural cooperative medical care system will be set up to basically cover rural residents nationwide by 2008, two years ahead of the original target of 2010. The central financial subsidy standard for farmers participating in cooperative medical care will be increased by 10 yuan on top of the original 10 yuan per person per year, raising it to 20 yuan, and at the same time will be increased to 20 yuan for municipal districts in the central and western regions where the majority of the population is in agriculture, and for some of the difficult counties in the eastern regions participating in the pilot program. City? into the scope of the central financial subsidies.
The establishment of a new rural cooperative medical system is a strategic policy aimed at promoting social equity and coordinated development, and is of far-reaching significance in narrowing the gap between urban and rural areas, reversing the unbalanced structure of social development, building a harmonious society, and realizing the five integrated developments. However, this policy, which benefits 760 million people in rural areas, still has some flaws in system design and faces many challenges. Failure to notice these problems and the existence of certain negative incentives may reduce the effectiveness of the system's guarantee or lead to deviation from the policy objectives, affecting the healthy operation and sustainable development of the new rural cooperative medical care system.
One of the main medical compensation policy for major diseases is worthy of reexamination
The new cooperative medical care is based on the probability of major diseases insurance, the policy direction of major diseases, that is, the government subsidies of 20 yuan per capita and 10 yuan per capita of the farmers to pay, are "mainly subsidies for large medical expenses or hospitalization costs".
First of all, the major disease-oriented coverage is prone to induce adverse selection and is not conducive to the establishment of a stable financing mechanism. Since the small chance of occurrence of major illnesses and hospitalized medical services reduces the expected benefits for the insured, healthy people often underestimate the importance of participating in the coverage, while high-risk groups are very willing to participate. Such adverse selection, i.e., "opt-in" and "opt-out," may threaten the sustainability of the financing of the new rural cooperative medical care. After one year of operation, a strange phenomenon has emerged in a number of counties and townships, namely, farmers who participated in the new rural cooperative medical care in the previous year and received subsidies for reimbursement of serious illnesses often chose not to join at this time, because farmers tend to have a certain kind of psychological expectation: "they will not be so unlucky as to get serious illnesses in the first year, and then continue to suffer from serious illnesses in the second year".
Secondly, the current level of funding is difficult to provide effective medical protection for rural residents. 2003 rural per capita health care expenditure of 115 yuan, but the total level of funding for cooperative medicine is only 30 yuan per capita, 30 yuan per person per year cooperative medical fund is still far from being able to solve the problem of rural residents due to poverty, return to poverty due to illness, insufficient protection may ultimately make the cooperative medical care become chicken ribs. Even for major disease assistance, under current arrangements, the *** payment portion is still very high (*** payment ratio reaches 30-50% in most areas), which limits the usefulness of such insurance for poor families, who in many cases are still unable to pay for the cost of seeing a doctor *** payment.
Once again, the targeting of coverage to cover major illnesses in effect abdicates the responsibility to cover the basic medical needs of the majority of the population, and is unlikely to result in good input performance. In the reality of rural life, it is common and frequent diseases that really affect the overall health of rural residents. Many rural residents suffer from serious illnesses because they have no money to pay for treatment of minor illnesses, but carry on with major illnesses. In terms of the performance of health investment, the health effects of intervention for major diseases are far less than those of timely intervention for common and frequent diseases. In addition, the protection of major illnesses leads to the moral hazard of "treating minor illnesses with major medical treatment". A survey found that (Tang Shenglan, 2005), in a pilot county in Gansu, there are many patients who could not be hospitalized were hospitalized to receive treatment.
The difficulty of financing and the high cost of operation and management
First of all, it is difficult to raise funds for cooperative medical care, and the cost of raising funds is high.
The annual financing of the New Rural Cooperative Medical Program requires the staff of the Cooperative Management Office to go door-to-door to raise funds, and the cost of financing is quite high. Grass-roots health cadres at the beginning of the cooperative medical launch, in order to achieve the higher provisions of the participation rate, the trouble, in some pilot areas, the cooperative medical participation rate to meet the standards and even one by one to talk out. At the same time, due to the historical existence of the "cooperative" in the name of all kinds of unreasonable charges and other reasons, resulting in part of the farmers on the township cadres to do the work on the door to do rebellious, coupled with some of the township cadres themselves are not high quality, resulting in increased funding difficulties. This status quo directly restricts the rural cooperative medical care faster spread.
Secondly, the cooperative medical management costs are high, and the related expenses are difficult to effectively implement.
The new rural cooperative medical system lacks organizational capacity and management cost analysis. County-based centralized review and reimbursement of expenses, on the surface, the level of coordination seems to have been very low. However, the actual situation is that the vast majority of counties have hundreds of thousands or even millions of people, and rural residents live quite scattered. Cooperative health care agencies face thousands of households, health status varies greatly and records are limited, the county government in the organization and management capacity to highlight the dilemma, the high cost of management is difficult to load.
The new rural cooperative medical care by the government as the organizer, the pilot county government at all levels to set up a set of corresponding management institutions, the county set up rural cooperative medical care management bureau (usually attached to the county health bureau of the institutions), the townships (townships) to set up a rural cooperative medical care office, the personnel and office expenses are included in the financial budget. This is a considerable expenditure for the county and township governments, which are themselves in a tight financial situation, and for the low level of cooperative medical care financing. And these are only direct system costs. In addition, county-level finances not only have to make arrangements for matching expenditures, but also have to bear a considerable amount of publicity and organizational costs and operational and management costs. Many county governments, forced to arrange for this part of the funding, pass part of the costs on to health institutions, including county hospitals, township health centers and village clinics, which in turn eventually pass on this part of the costs to patients in their operations.
Third, the reverse subsidy and regressive burden is more obvious
First, the "poll tax" form of payment is unfair, regressive burden is more obvious.
Perhaps for the sake of administrative simplicity, the current new rural cooperative medical system adopts the basic form of contribution of 10 yuan per capita, but this is actually a form of "poll tax" contribution, does not take into account the differences in the ability of rural residents to contribute individually and in the family, which will obviously result in the burden of contribution on the poor families. This will obviously result in a heavier burden of contributions on poor families. In contrast, the contribution rate for individuals under the urban workers' medical insurance system is 2% of their own wages, and the unit pays 6% of the employee's total wages, which also takes into account, to a certain extent, the issue of fair burden.
At the same time, because the New Rural Cooperative implements a combination of government subsidies and voluntary participation, as well as a system of reimbursement of medical expenses and the establishment of a higher out-of-pocket rate, this objectively creates a cost threshold, poor families still give up seeking medical treatment due to their inability to advance the full medical costs of a serious illness. This situation not only results in this segment of the population not being able to benefit, but also leads to reverse transfer payments. Since the rich are relatively more capable of paying the fees, they are more likely to enjoy the subsidies provided by the Government and the corresponding medical protection. This objectively creates a situation where the rich are both richer and more secure, and the poor are poorer and less secure. This exacerbates inequality in rural health care and violates the basic principle that the social security system should transfer payments to the poor and alleviate social inequality. In addition, voluntary participation in the system is bound to form a distinction between groups within and outside the system, and it is difficult to effectively avoid the problem of erosion of resources within the system by those outside the system.
Second, there is also the problem of regressive regional subsidies.
The new cooperative medical system adopts the financing principle of combining individual payment, collective support and government subsidies, which determines that the more people enrolled in the system, the more the state financial subsidies will be, and the stronger the cooperative medical fund will be. Wealthier counties and cities, local governments and rural residents have a stronger ability to pay, to carry out the new rural cooperative medical care is relatively easy, but also in some areas, and even appeared in order to capture the central subsidies for the purpose of rapid push to open the phenomenon of pavement. Provinces and cities in the start of the rural cooperative medical pilot, in order to produce a demonstration-led effect, basically are taken out of the local economic development, financial strength of the county as a pilot area, which makes the relatively affluent areas first and more to enjoy the funding of the higher level of government, resulting in an obvious regressive effect of subsidies.
The timing of the new rural cooperative medical care is not good for local governments. That's because China is in the process of abolishing several agricultural taxes, which means further reductions in revenue for townships and counties. Although compensatory transfers from the central government to local governments have somewhat dampened the negative impact of reduced local tax revenues, the problem of financial difficulties at the grassroots level remains prominent. In less economically developed areas, township and village enterprises are not developed, coupled with the abolition of the agricultural tax, the village and village levels rely solely on state transfers to maintain the work of the functioning of the village and village levels are heavily indebted, resulting in a serious lack of investment in cooperative medical care, the lack of start-up funds for financial input, the low rate of participation of farmers in the insurance system, the small size of the fund, and the low rate of coverage of the system.
Fourth, the voluntary participation mechanism is difficult to avoid the problem of adverse selection
In the cooperative medical system before the reform and opening up, although it was stipulated that farmers also participated voluntarily, but given the strong administrative mobilization force and the people's commune-based system at that time, it was in fact mandatory, and therefore most farmers were covered; in the restoration and reconstruction of the cooperative medical system since the mid-to-late 1980s In efforts to restore and rebuild the cooperative medical system since the mid-to-late 1980s, it was still stipulated that peasants could participate voluntarily, but the intention to participate voluntarily was particularly low, which ultimately led to the failure of the rebuilding efforts. Under the current conditions of weakened administrative coercion, farmers have a greater right to choose, resulting in low motivation for low-risk people to participate.
Because the new rural cooperative medical program covers less than 20 percent of average household health costs, many farmers may feel that the program does little to reduce the risk of medical expenditures, and their support for the new rural cooperative medical program diminishes, with the result that they either do not enroll or withdraw from the program. If low-risk policyholders (the young and healthy) are the first to drop out, which is very likely, then the cooperative health program will begin to lose money, and an increase in funding rates may be necessary next. This will further drive low-risk policyholders to drop out, and the program will begin to gradually shrink and eventually collapse, which is called adverse selection.
Voluntary insurance systems are almost always unsustainable because of the problem of adverse selection, when healthy people choose not to participate. International experience has shown that adverse selection can quickly undermine and ultimately lead to the disintegration of an insurance program that was built on a completely voluntary basis. In any population there are high-risk and low-risk policyholders, and if insurance is based on voluntary enrollment, low-risk policyholders will prefer to insure themselves. For this reason, basic health insurance systems in industrialized countries are generally mandatory and take the form of social insurance.
Fifth, the designated health institutions may become the biggest winners, the farmers did not get real benefits
First, the health institutions to use the new cooperative medical policy to generate income, may trigger a new round of emphasis on treatment rather than prevention. The more the system reform leading health institutions, often the easier to take advantage of the policy tilt in the main disease, to obtain economic benefits. The attention of health institutions is directed towards medical care as the center of attention, which is very likely to lead to competition by blindly increasing equipment and facilities and raising the standard of treatment without regard to actual needs, while neglecting practical improvements in services and preventive care.
Secondly, the transfer of funds and payments to public health organizations may protect backwardness and bring about inefficiency. Since reimbursement for the costs of the new cooperative health care is essentially limited to the public health system, this not only eliminates competition between the public and private systems, but also partially removes market pressures from unreformed health institutions. As long as they are public health institutions, poor services and high prices can also take advantage of the new cooperative health policy to gain a share of the market. In particular, rural health centers, which used to be at a disadvantage in market competition, have been brought back to life as a result of the new policy.
Once again, the rigidity of the mechanism for selecting designated hospitals may bring many new problems. Especially in dispersed rural areas, this could mean that patients would have to spend more and travel farther to see a doctor, or it could mean that the new rural cooperative medical care would bring families only a shift from going to private doctors to doctors in public institutions, without actually increasing the number of times a patient goes to see a doctor.
Sixth, the new cooperative medical care on the reasonable control of costs is still a challenge
For the new rural cooperative medical care policy and system is another major challenge is the reasonable control of costs, that is, the fund's stable and sustainable development. As with the urban medical insurance system, the new rural cooperative medical system design, the lack of rural medical service system reform and the cost of payment method reform of the synchronization of the support, so much so that it has to highlight the constraints on patients. The system design has introduced the practices of the urban workers' medical insurance system, such as starting and capping lines, higher **** payment rates, and segmented and proportional reimbursement. These practices are useful for maintaining the balance of funds, but overly strict constraints on patients, especially the excessively high out-of-pocket patient payment ratio will inevitably lead to a decline in the incentive to participate in the insurance.
The current cooperative medical care still lacks effective institutional constraints on supply-side behavior. In many regions, the new rural cooperative medical care program operates on the same or similar model as public and labor insurance, i.e., they both passively reimburse policyholders for their medical bills. This mode of operation is prone to moral hazard on the part of the healthcare provider and even the patient, and is likely to lead to a sharp increase in healthcare expenditure in the end. Some surveys have found that the problems of irrational use of medicines and irrational treatment and examination are more prominent in some designated medical institutions, with sub-average inpatient and outpatient costs rising more rapidly; prescribed medicines and examination items exceed the basic medicines catalog and the prescribed examinations by too much, and many of the costs are not reimbursed, which not only increases the burden of costs on the peasants, but also increases the expenditures of the cooperative medical care fund. Some rural residents have reflected that the medicines they buy through cooperative medical care are expensive, and although they are partially reimbursed, there is no real reduction in the portion they have to bear, and there is no difference between them and the medicines they buy elsewhere. In some places, after the introduction of cooperative medical care, there has been a general upward trend in medical costs, and the reimbursements available to rural patients have been offset by rising medical costs. The goal of reducing the medical burden on farmers through cooperative medicine will be difficult to realize.
Seven, medical insurance does not take care of the growing migrant population
Currently, there are about 100 million rural migrants in China every year, and more and more rural people are flowing into the cities, which is an important factor in promoting economic growth. But migrants from rural to urban areas are in a health insurance vacuum -- without official hukou, they are not eligible for urban health insurance, and the new rural cooperative medical care is likely to require them to return to their place of origin to see a doctor, or if they see a doctor in the city where they work, they will have to bear the risk of having only part of their medical expenses reimbursed by the cooperative medical care. the risk of only partial reimbursement of medical expenses.
If the economic benefits of labor migration are to be fully realized, it is important to ensure that health insurance follows the movement of policyholders. In the long run, as the urban-rural divide weakens further, it may make more sense to bring all of China's residents into a single universal insurance system, as has been achieved or is underway in other countries, including the Philippines, Thailand and Vietnam.
In sum, while the healthcare situation in rural China remains dire, and the government is working to provide healthcare coverage for the nearly 800 million uninsured, with a clear responsibility for increased government investment, the piloting of a new rural cooperative healthcare system is a bold and historic start. Of course, no policy can be perfect, and all are flawed in one way or another or face many challenges. It is always relatively easy to point out the problems, and more challenges come from how to solve them and thus continuously improve the policy, but after all, this is the first step in problem solving. Happily, there is a wealth of experience to draw on, which includes the experience of the urban health care reform in the 1990s, the several attempts in the past aimed at revitalizing rural cooperative health care, as well as experience from overseas health care development. It is reasonable to believe that with the policy thrust of the new rural cooperative medical care and the continuous improvement of the system, it will promote the economic and social development of rural areas in a better direction and facilitate the formation of a harmonious society with coordinated urban-rural, economic and social development
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