Since 1978, China has been primarily market-focused in its provision of health care and social services. The market-driven health care system has been characterized by perverse incentives for individual providers, patients, and hospitals that are inducing improper provision of care: overprescription of pharmaceuticals and high-tech testing, lack of effective primary care and gatekeeping, and competition for patients instead of referral. The national health care reform document that was made public in April 2009 recognizes this failure of the market in health care in China. The document suggests potential policies for improvement on the current system that are focused primarily on a targeted increase in government funding and an increased, changing role for the government. We assess the potential of this national health care reform to achieve the stated goals, and conclude that the reform as designed is necessary but insufficient. For the reform to meet its goals, the promised increase in funding should be accompanied by improved data collection, regional piloting, and a strong regulatory and purchasing role for the government in aligning incentives for individual and institutional payers, providers, and patients.

Many Chinese express dissatisfaction with their healthcare system with the popular phrase Kan bing nan, kan bing gui (“medical treatment is difficult to access and expensive”). Critics have cited inefficiencies in delivery and poor quality of services.  Determining the pattern of patient satisfaction with health services in China—and the causes of patient dissatisfaction—may help to improve health care not only in China but in countries in similar predicaments throughout the world.

Using data from a sample of 5,036 residents from 17 provinces collected in a 2008 household survey by the National Bureau of Statistics of China, we analyze the patterns of patient preferences, concerns, and satisfaction among six social groups, classified by socioeconomic status including education level, income, and type of employment.

From regression results we conclude that the gap between what patients predict their service will entail and what they perceive the service actually did entail is the key determinant of lower satisfaction, especially for patients who care most about the quality of service and patients with higher social positions. Patients from lower social groups are more concerned with price and the attitudes of medical professionals, and generally express higher satisfaction with their health care experiences than their wealthier peers, despite receiving lower-level services. Patients with higher social positions are more concerned with the technical competence and quality of providers, and struggle with what they perceive as a lack of freedom to purchase and receive their desired services, as well as long waiting times and poor physician-patient interactions. These patterns of patient satisfaction appear to be the consequence of China’s unreliable basic delivery system, lack of advanced health service supply, and distorted health market. We discuss how what we have learned about patients’ dissatisfaction can be used to restructure the delivery system to better meet and shape patients’ needs.

Many researchers have concluded that longer life expectancies prompt increased investment in education, as a prolonged labor supply raises the rate of return on education. Besides explaining the empirical evidence behind this conclusion (at an absolute level), there is another issue to be discussed: does time spent in studying and working increase proportionally with higher longevity? Building on an extended life-cycle model with an assumption on a more realistic distribution of life cycle mortality rates, this article considers dynamic effects of prolonging longevity on economic development by directly introducing changes in longevity into the economy, which is more preferable than comparative static analysis that relies on changes in relevant parameters. It shows that prolonged life expectancy will cause individuals to increase their time in education but may not warrant rises in labor input. Later we show that higher improvement rate of longevity will also promote economic growth, even if we exclude the mechanism of human capital formation and only consider the growth effects of the higher improvement rate of life expectancy from physical capital investment.

Forthcoming in The Chinese Journal of Population, Resources and the Environment

Published: Qiong, Zhang. "Longevity, Capital Formation and Economic Development." Chinese Journal of Population Resources and Environment 10.1 (2012): 53-63.

Out-of-pocket payments are the principal source of health care finance in most Asian countries, and India is no exception. This fact has important consequences for household living standards. In this paper the author explores significant changes in the 1990s and early 2000s that appear to have occurred as a result of out-of-pocket spending on health care in 16 Indian states. Using data from the National Sample Survey on consumption expenditure undertaken in 1993–94 and 2004–05, the author  measures catastrophic payments and impoverishment due to out-of-pocket payments for health care. Considerable data on the magnitude, distribution and economic consequences of out-of-pocket payments in India are provided; when compared over the study period, these indicate that new policies have significantly increased both catastrophic expenditure and impoverishment.

Published in Economic and Political Weekly, November 19, 2011  Vol. XLVI No. 47, pp. 63 - 70