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Challenges for Primary Health Care Services

China, a large and rapidly developing middle-income country with a hospital-based service delivery system for its aging population, makes a suitable case study of efforts to promote PHC management. Over the past several decades, PHC use in China has significantly decreased relative to hospital-based care. This trend is a natural consequence of the country’s unprecedented increases in living standards and improvements in financial risk protection, which increase patients’ demand for quality care and spur self-referral to providers with higher-perceived quality like hospital outpatient departments.

The performance differences between PHC and hospital-based care are especially stark in China’s rural areas, where management of chronic diseases relies heavily on grassroots physicians, who have limited medical education and training. That is why Eggleston and her colleagues set out to provide new empirical evidence about the effectiveness of a program that promotes PHC management of hypertension and diabetes for rural Chinese. Part of the National Basic Public Health Service Program for rural Chinese, it financially rewards PHC grassroots physicians for managing residents with chronic diseases.

Collaborative Research in the Era of Great Power Competition

Eggleston’s co-authors include her colleagues at the Zhejiang Provincial Center for Disease Control and Prevention (Zhejiang CDC). Their study is the culmination of Eggleston’s multiyear collaborative research project with the Zhejiang CDC team, "Addressing Health Disparities in China," which looks to Tongxiang county in Zhejiang as a case study of China's responses to healthcare inequalities and population aging challenges in rural and urban areas. The project also involved two Stanford doctoral students who worked with Eggleston.

“This kind of collaboration, where we utilize the data that's available to answer an important question while respecting the privacy of the individuals and hopefully delivering benefits to them through more effective or affordable programs in the future perhaps is a promising model for researchers here and elsewhere to undertake,” she notes.

Disentangling the Effect of Primary Health Care Management

To study the program’s effectiveness, the researchers assembled a unique dataset linking individual-level administrative and health information between 2011 and 2015 for rural Chinese diagnosed with hypertension or diabetes in Tongxiang, a mostly rural county of Zhejiang province in southeast China. Collected by the Tongxiang CDC and Zhejiang CDC, the compiled database links basic demographic information, health insurance claims, PHC service logs, and health check-up records — four sets of data that are rarely linked and analyzed in combination in China healthcare research.

Targeting the program’s effects on healthcare utilization, spending, and health outcomes, Eggleston and her colleagues compare residents in neighboring villages that straddle township boundaries. These residents are similar in their individual and environmental characteristics that shape health care use but are subject to different PHC management practices. This “border sampling” allows the researchers to disentangle the effects of PHC management from other underlying spatial differences that impact health care utilization. For each township, the researchers use a management intensity index that reflects the cumulative efforts of PHC physicians to screen their communities and keep patients within the PHC management programs for controlling hypertension and diabetes. Each township’s experience with PHC management over the 5-year study period is thus a case study for rural China.

Net Value in Chronic Disease Management

The results are encouraging for China's investment in primary care management of chronic diseases. Eggleston and her colleagues find that patients residing in a village within a township with more intensive PHC management had a relative increase in PHC visits, fewer specialist visits, fewer hospital admissions, and lower spending compared to neighbors with less intensive management. They also tend to have better medication adherence and better health outcomes as measured by blood pressure control.

The results suggest that PHC chronic disease management in rural China improves net value in multiple ways — increasing PHC utilization, reducing avoidable hospitalizations, decreasing medical spending, and improving intermediate- and long-run health outcomes — all while leveraging existing resources rather than restricting care.

The findings also help inform investments in primary health care in LMICs. They highlight the latent potential of frontline healthcare workers in such settings to be more productive and show that financially rewarding these grassroots workers for managing residents with chronic diseases helps improve health outcomes. Moreover, they offer empirical evidence that supports the effectiveness of chronic disease management programs as part of broader regional initiatives to address population health.

The Walter H. Shorenstein Asia-Pacific Research Center (APARC) is pleased to invite applications for four types of fellowship in contemporary Asia studies for the 2022-23 academic year.

The Center offers postdoctoral fellowships that promote multidisciplinary research on contemporary Japan, contemporary Asia broadly defined, health or healthcare policy in the Asia-Pacific region, and a fellowship for experts on Southeast Asia. Learn more about each fellowship and its eligibility and specific application requirements:

Postdoctoral Fellowship on Contemporary Japan

Hosted by the Japan Program at APARC, the fellowship supports research on contemporary Japan in a broad range of disciplines including political science, economics, sociology, law, policy studies, and international relations. Appointments are for one year beginning in fall quarter 2022. The application deadline is January 3, 2022.
 

In this relatively well-insured population, annual health care utilization significantly increases primarily because of more intensive use of outpatient care at retirement. This increase in outpatient care stems from a decline in the patient cost-sharing rate, the reduced time constraints upon retirement, and the interaction of these factors with supply-side incentives such as prescribing antibiotics. There is no evidence of change in inpatient care at retirement.

The economics of medical expenditure growth and its interaction with population aging is of considerable policy importance for countries in all income groups. “Our findings may provide useful evidence as one consideration for policymakers in other cities in China and elsewhere looking to increase insurance benefits and control medical spending for burgeoning elderly populations.

Shorenstein APARC is pleased to share that Radhika Jain, our 2019-22 Asia Health Policy Postdoctoral Fellow, is the recipient of the inaugural Adam Wagstaff Award for Outstanding Research on the Economics of Healthcare Financing and Delivery in Low- and middle-Income Countries. Hosted by the International Health Economics Association (iHEA), the award recognizes Jain’s excellent paper, "Private Hospital Behavior Under Government Health Insurance in India." She received the award on July 13 at a special session of the iHEA 2021 Congress.

Jain is a health economist working on public health policy in India. Her research focuses on the role of the private sector in the country’s health system, frictions in health care markets, socioeconomic and gender inequality, and health policy design. Her award-winning paper provides the first large-scale evidence on the behavior of private hospitals within public health insurance programs in India. In a major policy shift away from direct public provision of health care, the Indian government has been expanding health insurance programs that contract private hospitals for service delivery and pay them at fixed rates for services. Until now, however, there has been little empirical evidence on the behavior of private hospitals within these programs. 

Earlier this year, Jain presented the results of her study as part of the Asia Health Policy Program’s 2020-21 colloquium series, "Health, Medicine, and Longevity: Exploring Public and Private Roles.” Watch the conversation here:

For her research, Jain used over 1.6 million insurance claims, 20,000 patient surveys, and a policy-induced natural experiment that changed hospital reimbursement rates. Her study reveals that private hospitals in India engage in coding manipulation to increase revenues at government expense and charge patients out-of-pocket for care against program rules. As a result, almost half of all patients pay for care that should be free, and these payments constitute a 35% markup over the price the government pays. The charges decrease if reimbursement rates increase, but hospitals capture approximately half the increased reimbursements.

Jain's findings indicate that hospitals exploit market frictions and poor program enforcement to capture a substantial share of the public subsidy as profit. “In contexts of weak oversight,” she writes, “profit-motivated private agents systematically flout program rules to increase their revenues at considerable expense to the government and patients.”

She also finds, however, that hospital non-compliance partially compensates for prices set too low to meet the participation constraints of agents. Reimbursement rates, says Jain, are a significant policy lever that drives agent behavior, and simply increasing monitoring without appropriate price-setting may increase compliance but decrease service provision.

Jain’s research shows that market structure — a factor rarely taken into account in social policy design in lower-income contexts — can affect the extent to which public subsidies benefit citizens. Her findings provide broader insights into contracting the private sector for delivering health and other social services in settings with limited institutional capacity for monitoring and optimal price-setting.

On our podcast, Jain discusses her efforts to develop measures that improve how health systems serve vulnerable populations and her collaborative research with Stanford development economist Pascaline Dupas on how India's COVID-19 lockdown affected access to non-COVID-related health care and outcomes. Listen here:

The Adam Wagstaff Award honors the legacy of the late Adam Wagstaff, who was a research manager in the Development Research Group of the World Bank and former president of iHEA, and celebrates his lifelong commitment to improving healthcare financing and delivery and promoting equity in low- and middle-income countries. The award also contributes to iHEA’s efforts to promote excellence in health economics globally and advance internationalization through greater inclusion of low- and middle-income country researchers.

Congratulations, Dr. Jain, on this well-deserved honor!

Modeling Health Outcomes Among East Asian Populations

The chronic progression to diabetes-related complications is apt for computer simulation modeling due to the long-term nature of health outcomes and the time lag for interventions to impact patient outcomes. It is problematic, however, to estimate the impacts of health interventions on East Asian populations with diabetes using existing models, which were developed and validated in European and North American populations with different epidemiology and outcomes.

To fill in this gap, Eggleston and her colleagues set out to develop and validate an outcomes model for the progression of diabetes and related complications in Chinese populations. They compared this new model, called the Chinese Hong Kong Integrated Modeling and Evaluation (CHIME), to two widely used existing models developed and validated in the United Kingdom (known as the United Kingdom Prospective Diabetes Study Outcomes Model 2, or UKPDS-OM2) and in the United States/Canada (called Risk Equations for Complications of type 2 Diabetes, or RECODe). Despite the continuum of risk across the spectrum of risk factor values, these two existing models ignore the progression from prediabetes to diabetes.

The CHIME integrates prediabetes and diabetes into a comprehensive model comprising 13 outcomes. These include mortality, micro- and macrovascular complications, and the development of diabetes. The researchers developed the CHIME simulation model using data from a population-based cohort of 97,628 participants in Hong Kong with type 2 diabetes (43.5%) or prediabetes (56.5%) from 2006 to 2017. Known as the Hong Kong Clinical Management System (CMS), this cohort makes one of the largest Chinese electronic health informatics systems with detailed clinical records. 

The next step was to externally validate the CHIME model against individual-level data from the China Health and Retirement Longitudinal Study (CHARLS) cohort (2011-2018), a nationally representative longitudinal cohort of middle-aged and elderly Chinese residents age 45 and older. The researchers validated the CHIME model against six outcomes measures recorded in the CHARLS data and an additional 80 endpoints from nine published trials of diabetes patients using simulated cohorts of 100,000 individuals.

Towards Reducing the Disease Burden of Diabetes

The researchers found that the CHIME model outperformed the widely used UKPDS-OM2 and RECODe models on the data used, meaning that the validation of the CHIME model was more accurate for trials with mainly Asian participants than trials with mostly non-Asian participants. The results indicate that the CHIME model is a validated tool for predicting the progression of diabetes and its outcomes, particularly among Chinese and East Asian populations, for which the existing models have been unsuitable.

With the new model, clinicians and health economists can evaluate population health status for prediabetes and diabetes using routinely recorded data and therapies related to the long-term management of diabetes. In particular, the CHIME outcomes model enables them to assess patients' quality of life and measure cost per quality-adjusted life-years over the long-time horizon of chronic disease conditions. The new model thus supports the economic evaluation of policy guidelines and clinical treatment pathways to tackle diabetes and prediabetes, address micro- and macrovascular complications associated with these conditions, and improve life expectancy.