How does the New Cooperative Medical Scheme influence health service utilization? A study in two provinces in rural China

Background: Many countries are developing health financing mechanisms to pursue the goal of universal coverage.

In China, a rural health insurance system entitled New Cooperative Medical Scheme (NCMS) is being developed since

2003. Although there is concern about whether the NCMS will influence the serious situation of inequity in health

service utilization in rural China, there is only limited evidence available. This paper aims to assess the utilisation of outpatient and inpatient services among different income groups and provinces under NCMS in rural China.

Methods: Using multistage sampling processes, a cross-sectional household survey including 6,147 rural households

and 22,636 individuals, was conducted in six counties in Shandong and Ningxia Provinces, China. Chi-square test,

Poisson regression and log-linear regression were applied to analyze the association between NCMS and the utilization

of outpatient and inpatient services and the length of stay for inpatients. Qualitative methods including individual

interview and focus group discussion were applied to explain and complement the findings from the household

survey.

Results: NCMS coverage was 95.9% in Shandong and 88.0% in Ningxia in 2006. NCMS membership had no significant

association with outpatient service utilization regardless of income level and location.

Inpatient service utilization has increased for the high income group under NCMS, but for the middle and low

income, the change was not significant. Compared with non-members, NCMS members from Ningxia used inpatient

services more frequently, while members from Shandong had a longer stay in hospital. High medical expenditure, low reimbursement rate and difference in NCMS policy design between regions were identified as the main reasons for the differences in health service utilization.

Conclusions: Outpatient service utilization has not significantly changed under NCMS. Although utilization of

inpatient service in general has increased under NCMS, people with high income tend to benefit more than the low

income group. While providing financial protection against catastrophic medical expenditure is the principal focus of

NCMS, this study recommends that outpatient services should be incorporated in future NCMS policy development.

NCMS policy should also be more equity oriented to achieve its policy goal.