Management capacity and health insurance: the case of the New Cooperative Medical Scheme in six counties in rural China

Abstract. In 2003, China launched the New Cooperative Medical Scheme (NCMS) as a form of health insurance for rural areas. Counties play an important part in the management of the system, raising issues over the capacity of local government to manage complex health insurance systems. This paper examines the extent and impact of county level managerial capacity to manage the NCMS. The paper is largely based on qualitative data but supported by quantitative data. Policy makers, NCMS administrators, health providers and residents were interviewed in May 2006 in six counties in rural China. Management capacity was defined as the capability to bring together and use resources to carry out responsibilities. The results are grouped into three areas of management capacity: staff, organizational and contextual. Respondents complained about inadequate staffing, poor organizational resources and conduct of responsibilities in areas such as premium collection and remuneration. Key problems in contextual capacity included: counties are restricted in their ability to use resources for management; counties lack support from other organizations and suffer from a conflict of responsibilities. This paper underlines the importance of effective management capacity for NCMS at the decentralized level and suggests pointers for the content and process of management capacity development.