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In late 2006, the Chinese government appointed a high-level inter-ministerial commission—composed of fourteen government agencies, co-chaired by the National Development and Reform Commission and the Ministry of Health—to develop a blueprint for China’s healthcare system. One party to that process, China’s Insurance Regulatory Commission (CIRC), has developed a program of cooperation with its U.S. counterpart, the National Association of Insurance Commissioners (NAIC). To provide input to policymaking, representatives of CIRC, NAIC, private insurers in China and the United States, as well as Chinese and American scholars of health insurance gathered in Yichang, Hubei, PRC, on 18-19 June 2007, for a joint seminar on the role of commercial health insurance in the Chinese and U.S. healthcare systems.

The first section of this field report provides a brief description of China’s health care reforms in the past decades. The second section highlights the progress and challenges to date in developing commercial health insurance in China, and the final section summarizes the recommendations that the NAIC Commissioners provided to CIRC in 2007 at this critical juncture in China’s health policy reforms.

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Field Note in Perspectives: China and the World
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Karen Eggleston
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Since the mid-1980s, health maintenance organizations (HMOs) have grown rapidly in the United States.  Despite initial successes in constraining health care costs, HMOs have come under increasing criticism due to their restrictive practices.  To remain viable, this would seem to suggest that HMOs have to change at least some of these behaviors.  However, there is little empirical evidence on how restrictive aspects of HMOs may be changing.  The present study investigates one mechanism for constraining costs that is often associated with HMOs – the role of the primary care physician as a gatekeeper (e.g., monitoring patients’ use of specialist physicians).  In particular, we estimate the effect of primary care physician involvement with HMOs on the percentage of their patients for whom these physicians serve as gatekeepers.  We examine these relationships over two time periods: 2000-2001 and 2004-2005.  Because physicians can choose whether and to what extent they will participate in HMOs, we employ instrumental variables (IV) estimation to correct for endogeneity of the HMO measure.  Although the single-equation estimates suggest that the role of HMOs in terms of requiring primary care physicians to serve as gatekeepers diminished modestly over time, the endogeneity-corrected estimates show no changes between the two time periods.  Thus, one major tool used by HMOs to constrain health care costs – the physician as gatekeeper – has not declined even in the era of managed care backlash.

Published: Fang, Hai, Hong Liu, and John A. Rizzo. "Has the use of physician gatekeepers declined among HMOs? Evidence from the United States." International journal of health care finance and economics 9.2 (2009): 183-195.

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Asia Health Policy Program working paper #2
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Embedded in traditional culture perpetuating family-centered elderly care, informal care is still viewed as a family or moral issue rather than a social and policy issue in South Korea. Using newly available microdata from the Korean Longitudinal Study of Aging, this study investigates the effect of informal caregiving on labor market outcomes in South Korea. By doing so, this study provides evidence to inform elderly long-term care policy in South Korea, and also fills a gap in the international literature by providing results from an Asian country. Empirical analyses address various methodological issues by investigating gender differences, by examining both extensive and intensive labor market adjustments with two definitions of labor force participation, by employing different functional forms of care intensity, and by accounting for the potential endogeneity of informal care as well as intergenerational co-residence. Robust findings suggest negative effects of informal caregiving on labor market outcomes among women, but not among men. Compared with otherwise similar non-caregivers, female intensive caregivers who provide at least more than 10 hours of care per week are at an increased risk of being out of the labor force by 15.2 percentage points. When examining the probability of employment in the formal sector only, the effect magnitude is smaller. Among employed women, more intensive caregivers receive lower hourly wages by 1.65K Korean Won than otherwise similar non-caregivers. Informal care is already an important economic issue in South Korea even though aging is still at an early stage.

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Asia Health Policy Program working paper #1
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Young Kyung Do
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Korea introduced three major health-care reforms: in financing (1999), pharmaceuticals (2000), and provider payment (2001). In these three reforms, new government policies merged more than 350 health insurance societies into a single payer, separated drug prescribing by physicians from dispensing by pharmacists, and attempted to introduce a new prospective payment system. The change of government, the president’s keen interest in health policy, and democratization in public policy process toward a more pluralist context opened a policy window for reform. Civic groups played an active role in the policy process by shaping the proposals for reform —a major change from the previous policy process that was dominated by government bureaucrats. However, more pluralistic policy process also allowed key interest groups to intervene at critical points in implementation (sometimes in support, sometimes in opposition), with smaller political costs than previously.

Strong support by the rural population and labor unions contributed to the financing reform. In the pharmaceutical reform, which was a big threat to physician income, the president and civic groups succeeded in quickly setting the reform agenda; the medical profession was unable to block the adoption of the reform but their strikes influenced the content of the reform during implementation. Physician strikes also helped them block the implementation of the payment reform. Future reform efforts in Korea will need to consider the political management of vested interest groups and the design of strategies for both scope and sequencing of policy reforms.

Soonman Kwon is Professor of Health Economics and Policy, and Director of the BK (Brain Korea) Center for Aging and Health Policy in Seoul National University, South Korea. After he received his Ph.D. from the Wharton School of the University of Pennsylvania, he was assistant professor of public policy at the University of Southern California in 1993-96. Prof. Kwon has held visiting positions at Harvard School of Public Health (Fulbright Scholar and Tekemi Fellow), London School of Economics (Chevening Scholar), Univ. of Trier of Germany (DAAD Scholar), and Univ of Toronto. He is on the editorial boards of Social Science and Medicine (Elsevier), Health Economics Policy and Law (Cambridge U Press), and Health Systems in Transition (HiT, European Observatory). He has occasionally worked as a short-term consultant of WHO, ILO, and GTZ (German Technical Cooperation) on health financing and policy in China, Cambodia, Lao PDR, Malaysia, Mongolia, Pakistan, Philippines, and Vietnam. He has also been a consultant of Korean government for the evaluation of its development aid programs in North Korea, Ecuador, Fiji, Mexico and Peru.

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Soonman Kwon Professor Speaker Seoul National University
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The Asia Health Policy Program has launched a new working paper series on health and demographic change in Asia with a working paper on informal caregiving for the elderly in South Korea. Authored by Young Kyung Do, the inaugural postdoctoral fellow in comparative health policy with the Asia Health Policy Program, the first working paper provides evidence to inform elderly long-term care policy in South Korea.

As Dr. Do notes in the abstract of his paper, informal care is embedded in traditional culture perpetuating family-centered elderly care and is still viewed as a family or moral issue rather than a social and policy issue in South Korea. Using newly available microdata from the Korean Longitudinal Study of Aging, the study investigates the effect of informal caregiving on labor market outcomes in South Korea. It fills a gap in the international literature by providing results from an Asian country. Empirical analyses address various methodological issues by investigating gender differences, by examining both extensive and intensive labor market adjustments with two definitions of labor force participation, by employing different functional forms of care intensity, and by accounting for the potential endogeneity of informal care as well as intergenerational co-residence. Robust findings suggest negative effects of informal caregiving on labor market outcomes among women, but not among men. Compared with otherwise similar non-caregivers, female intensive caregivers who provide at least 10 hours of care per week are at an increased risk of being out of the labor force by 15.2 percentage points. When examining the probability of employment in the formal sector only, the effect magnitude is smaller. Among employed women, more intensive caregivers receive lower hourly wages by 1.65K Korean Won than otherwise similar non-caregivers. Informal care is already an important economic issue in South Korea even though aging is still at an early stage.

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Demographic change and long-term care in Japan, chronic non-communicable disease in China, national health insurance in South Korea, TB control in North Korea, pharmaceutical policy in the region and global safety in drug supply chains -- these are some of the topics explored in a new Stanford course: East Asian Studies 117 and 217,  "%course1%." Taught in fall 2008 by Karen Eggleston, Director of the Asia Health Policy Program, the course has enrolled students not only of East Asian studies but also other undergraduate majors as well as graduate students from the School of Education, School of Medicine, and Graduate School of Business.

 

The course discusses population health and healthcare systems in contemporary China, Japan, and Korea (north and south). Using primarily the lens of social science, especially health economics, participants analyze recent developments in East Asian health policy. In addition to seminar discussions, students engage in active exploration of selected topics outside the classroom, culminating in individual research papers and group projects that present findings in creative ways. For example, several students prepared an overview of health and healthcare in North Korea; three MBA students prepared a proposal for a healthcare venture in China (+PPT+ 1.2MB); and others attended related colloquia, interviewed researchers, and prepared summaries for public posting, such as the article on gender imbalance in China.

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This conference, sponsored by the Asia Health Policy Program at the Walter H. Shorenstein Asia-Pacific Research Center and the Global Aging Program of Stanford Center on Longevity, explored the impact of rapid aging on economic growth, labor markets, social insurance financing, long term care, and health care in China, Japan, and Korea.

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Michael H. Armacost Speaker
David Bloom Speaker Harvard University
Judith Banister Speaker The Conference Board
Naoki Ikegami Speaker Keio University
Soonman Kwon Speaker Seoul National University
Shripad Tuljapurkar Speaker Stanford University
Marcus W. Feldman Speaker Stanford University
Naohiro Ogawa Speaker Nihon University
Andrew Mason Speaker University of Hawaii
Shanlian Hu Speaker Fudan University
Edward Norton Speaker University of Michigan
Shuzhuo Li Speaker Xi'an Jiaotong University
Maria Porter Speaker University of Chicago
Meng Kin Lim Speaker National University of Singapore National University of Singapore
Kai Hong Phua Kai Hong Phua Speaker National University of Singapore National University of Singapore
John C. Campbell Speaker University of Michigan Emeritus
Byongho Tchoe Speaker Korea Institute for Health and Social Affairs
Young Kyung Do Speaker Asia Health Policy Program
Jian Wang Speaker Shandong University
Dolores Gallagher-Thompson Speaker Stanford School of Medicine
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On October 2, 2008, Dr. Marcus Feldman of Stanford's Biology department delivered the first colloquium in the series on "The Implications of Demographic Change in China," co-sponsored by the Asia Health Policy Program and the Stanford China Program. Dr. Feldman discussed the sex-ratio imbalance and gender studies in China.

As Dr. Feldman noted, the total fertility rate in China has dropped dramatically in recent years, due in large part to the Chinese government's One Child Policy, which was introduced in 1979. In the early 1970s, the fertility rate averaged almost 6 births per woman, dropping to about 1.6 after the year 2000. China's sex ratio of males to females at birth (SRB), meanwhile, has risen. In 1975, the SRB was about 106 male births per 100 female births, and in 2005 had climbed to over 120 male births per 100 female births. When parity (birth order) is taken into account, the ratio becomes even more startling; for the first birth, the ratio is close to even (about 108 in the year 2005), but exceeded 145 in 2005 for the second birth and even higher for the third birth (almost163 in 2005). Research indicates that the imbalanced SRB is largely concentrated in the lower coastal regions of mainland China, where the population is predominantly Han. Shaanxi, Anhui and Jiangxi Province have the highest ratio of male to female births.

Evidence of gender imbalance is not merely limited to the ratio at birth; high ratios of male to female children are seen through ages 0-4, indicating that son preference affects not only which children survive birth, but also the survival rate of females in early childhood. In fact, research indicates that while excess girl child mortality (EGCM) has decreased for infants less than a year old in the period between 1973 and 2000, it has become increasingly pronounced for children between the ages of 0-4 and 5-9, with EGCM rates increasing every year.

Two Studies

Two studies were carried out in 1997 and 2000 by the Institute for Population and Development Studies of Xi'an Jiaotong University to investigate the causes of gender imbalance. The 1997 study focused on the cultural transmission of son preference, and the 2000 study on marriage form and old age support.

Three counties were chosen as sites, and the studies were a combination of surveys, in-depth interviews and focus group discussions. The first county, Sanyuan () in Shaanxi province, is a medium-developed region whose principal agricultural product is wheat. Fertility is high in Sanyuan, which is characterized by the dominance of virilocal marriage (in which the bride joins the family of her husband) and strict patrilineal family systems. The second county, Lueyang () in Shaanxi province is an underdeveloped mountainous region in which the patrilineal family system is more relaxed, fertility is lower than in Sanyuan, and there are diversified forms of marriage. The third site, Songzi () in Hubei province, is a well-developed rice- and cotton-producing plains region, with low fertility, relaxed family systems and diversified marriage. The results of household surveys showed a strong preference among parents in both Sanyuan and Lueyang to live with their sons in old age, which was not surprising, but a surprising result was found when parents were asked about the primary benefits of having a son. The most-reported reason was for carrying on the family name, which shows that traditional (Confucian) values played a bigger role in son preference than practical considerations such as labor or old age support. Overall, Lueyang was shown to have a much higher rate for transmitting no son-preference than Sanyuan, with older women slightly more likely to transmit no son-preference.

The marriage study found that rates of uxorilocal marriage (in which the groom joins the family of his wife) have, for the most part, been dropping in both Lueyang and Songzi since the 1970's. In Sanyuan, where uxorilocal marriage has been traditionally uncommon, the rates have remained steady at around 5 percent since the 1950's. The researchers calculated children's odds ratios of providing financial help to parents based on marriage form, and found the net ratios highest for women in virilocal marriages and sons in uxorilocal marriages.

Mechanisms of gender imbalance

There are several likely factors for the imbalanced sex ratio at birth in China. Underreporting of female births, infanticide, and sex-selective abortion (post-pre-natal gender testing) all contribute to this syndrome. Furthermore, poor nutritional and medical care for girls in their younger years can further skew the gender balance by exacerbating excess female child mortality. At the basic source of this issue, however, remains a fundamental gender bias that dates back historically and philosophically through Confucian culture and traditional patriarchal structures.

If the SRB, EFCM, TFR (total fertility rate) were all to remain at their early 2000s levels, then by 2030 the total population of China would be 84.2% of what would normally be expected at the current fertility rate (potentially causing economic welfare issues for the elderly, along with a work force deficiency). Moreover, there would be an excess in the male population of 20-21% (relative to females), essentially making it mathematically impossible for this proportion of the male population to marry. Needless to say, the possibility of such a severe "marriage squeeze", and the general top-heavy ratio of aging population to young working population are very problematic prospects for China's population and for the government's endeavors to promote both economic growth and social stability.

Examples of government efforts

The government is considering several policy options to try to avert this potential crisis. Stronger punishments were suggested at the 2008 National People's Congress (NPC) and Chinese People's Political Consultative Conference (CPPCC) for non-medical sex identification and sex-selection abortions (both of which can be obtained for relatively cheap rates within the country, despite being illegal). More proactively, an experimental program called "Care For Girls" was implemented in 2000 in Chaohu (a city in Anhui province). This program includes: financial help for 1- and 2-daughter families; sponsoring of girls' educational fees and increased pensions to families with daughters; and the promotion of uxorilocal marital structures. Since the introduction of the program, the local SRB went from 125 in 1999 to 114 in 2002. In response to this apparent success, the government expanded the "Care For Girls" program to 24 counties with high SRB rates in 2003-2004, and saw the average SRB in those counties drop from 133.8 in 2000 to 119.6 in 2005. Stipulation and initiation of a national "Care For Girls" campaign occurred in January 2006 - July 2006, with the goal of bringing the national SRB average to normal levels within 15 years. In January 2008, the government expanded on this effort by launching the "Care For Girls Youth Volunteer Action", beginning with more than 1000 students (mostly at the university level) directed at engaging in promotional activities and data collection (under the Chinese Communist Youth League). These policies are part of a comprehensive aspiration on the part of the PRC government towards the "construction of a new reproductive culture."

Son preference among migrant workers in Shenzhen

With the Chinese economic reform of the early 1980s, millions of laborers have been migrating from rural to urban areas. After migration, rural-urban laborers have to familiarize themselves with the rules and customs of their new locations, rebuilding their social networks in the process of adapting to their new occupations and habitation. But how do individual characteristics (i.e. gender, education level and the time of residency), restructured social networks, and the experiences of migration influence migrants' attitudes and behaviors regarding son preference? These questions were examined in a 2005 study conducted in Shenzhen.

Shenzhen is the first Special Economic Zone in China to implement economic reform and has since developed from a small fishing village into a modern coastal city. According to the 2000 Population Census, the total population of Shenzhen is 7,008,800, and the ratio of migrants to permanent urban residents is 4.77:1.

The Shenzhen study seemed to indicate initially that only a small minority of migrants (7% of total respondents) expressed a strong attitude towards son preference. However, the actual childbearing behavior of rural-urban migrants was remarkably different compared to their reported attitudes. The sex ratio of migrant children is as high as 163 male births per 100 female births, and the later in the birth order, the higher the sex ratio for the child, i.e., the sex ratio is 1.52 for the first birth and rises steeply to 1.80 for the second birth, peaking at 1.94 for the third and above birth. Thus the results suggest that migrants' childbearing behaviors actually suggest a strong son preference.

The Shenzhen study also found that three major determinants, namely social networks, migration history, and individual factors, all have significant effects on son preference among rural-urban migrants.

First, weak ties (formed by friends, bosses, and fellow workers) in social networks affect the attitude of son preference among rural-urban migrants. That is, the risk of having son-preference tends to decrease when the overall influence of network members is positive (without son preference). Moreover, increasing social contacts with network members will reduce the dependence upon strong ties (formed by family members and kin) and thus decrease the traditional culture of "rearing a son to support parents in their old age" and familial pressures to have more children.

Second, the duraction of residency in an urban area has a significant effect on the attitude of son preference among rural-urban migrations. The longer the migrants live in an urban area, the more likely that their attitudes of son-preference will adapt to urban reproductive norms. For example, the data indicated that ratio of male and female birth is more balanced among those living in urban areas for 8 years or longer. However, rural-urban migrants still exhibit a strong overall behavior of son preference. In other words, the change in childbearing behavior in terms of birth patterns still lags far behind the apparent change of attitudes.

Age and education are identified as factors affecting son preference among rural-urban migrants. For instance, an increase in age relative to initial migration will often decrease the imbalance in the sex ratio.

An additional study on rural-urban migrants examined the relationship between the gender of married migrants and their provision of financial support to parents and parents-in-law post-migration. The results showed, in fact, that female migrants are more likely to give financial support to their parents-in-law after migration.

Even today, the patrilineal conception of support for elderly family members is still very prevalent in rural China. Sons are expected to provide fundamental support to their parents, while daughters tend to provide supplementary and emotional support. This traditional old-age support pattern of reliance on sons can often intensify the syndrome of son bias among rural or traditional Chinese. However, the results here proved that if aging parents are more likely to receive sustenance from married daughters compared to married sons, the dominant son-preference in rural China could be logically undercut and eventually the traditional patrilineal conception of old-age support, and resulting gender bias, could be ameliorated and even eliminated.

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Dr. Shea will talk with us about her research on menopause and aging among Chinese women and issues surrounding romance, sex, and marriage in later life in mainland China, as part three of the colloquium series on "The Implications of Demographic Change in China," co-sponsored by the Stanford China Program and the Asia Health Policy Program. 

A sociocultural anthropologist who specializes in medical and psychological anthropology and Chinese culture, Dr. Shea's research interests include gender issues, health and healing, aging and the lifecycle, and intergenerational issues. She has spent three cumulative years living, studying, and doing research in the People's Republic of China.

Dr. Shea earned a B.A. in Asian Studies from Dartmouth College in 1989, followed by an M.A. and Ph.D. in Anthropology from Harvard University in 1994 and 1998.

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Jeanne Shea Associate Professor, Department of Anthropology Speaker University of Vermont
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The July/August issue of Health Affairs, the leading U.S.-based health policy journal, focuses on China and India. The special issue includes an article on China’s pharmaceutical policy by five contributors to Prescribing Cultures and Pharmaceutical Policy in the Asia-Pacific, a book forthcoming in 2009 from the Shorenstein Asia-Pacific Research Center series with Brookings Institution Press. Chapters on Korea and Japan by Soonman Kwon (Seoul National University) and Toshiaki Iizuka (Aoyama Gakuin University) also appear in Chinese translation in the journal Bijiao (Comparative Studies), along with an overview paper (“Pharmaceutical policy reforms to separate prescribing from dispensing in Japan and South Korea: Possible implications for China”) by Karen Eggleston, Asian Health Policy Program Director.

As Eggleston writes in the introduction to Prescribing Cultures, pharmaceuticals and their regulation play an increasingly important and often contentious role in the health care systems of the Asia Pacific.  For example, some economies such as China have extraordinarily high drug spending as a percentage of total health spending; India and a few others host thriving domestic pharmaceutical industries of global importance, while controversy surrounds patents, trade-related aspects of intellectual property (TRIPS), and pharmaceutical pricing within bilateral trade agreements (Australia-US, Republic of Korea-US); nations throughout the region struggle with appropriate regulation of drugs, from patents to evidence-based purchasing (e.g., Australia’s Pharmaceuticals Benefit Scheme) and direct-to-consumer advertising; deeply-rooted traditions of indigenous medicine are modernizing and integrating into broader health care systems; and policies to separate prescribing and dispensing re-write the professional roles of physicians and pharmacists, with modifications to accommodate cultural norms and strong economic interests. Effective prescribing and pharmaceutical use will be central to controlling infectious diseases, both old and emerging; protecting the global public good of antimicrobial effectiveness; and treating the growing burden of chronic disease in the Asia Pacific.

The forthcoming book will explore these issues in detail, through a multi-disciplinary lens. The first section of the book features chapters on pharmaceutical policy within seven selected health care systems of the Asia Pacific: South Korea, Japan, Thailand, Taiwan, Australia, India, and China. The second section focuses on the cross-cutting themes of prescribing cultures and access versus innovation. Taken as a whole, the contributions aim to provide an evidence base for policy while acknowledging the historical and cultural context that makes policies distinctive.

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