Asia Health Policy Program Director Karen Eggleston and colleagues examine China’s progress in enhancing financial protection under its social health insurance to achieve universal health coverage.

In 2009, China launched comprehensive health system reforms to address challenges such as increasing rates of non-communicable diseases and population aging, problems with health financing and healthcare delivery, and overall growing health expectations of its people. Promoting universal health coverage by building a social health insurance system was a central pillar of the reforms.

After a decade of system reforms, has the Chinese government made good on its commitment to bolster universal health coverage? In a new article published in a BMJ collection, a team of four co-authors including Karen Eggleston, APARC’s deputy director and director of the Asia Health Policy Program, evaluates China’s progress towards enhancing financial protection of social health insurance and identifies the main gaps that need to be filled to achieve universal health coverage. Their article is part of a special BMJ collection with Peking University that marks the tenth anniversary of China’s health system reforms by analyzing their accomplishments and challenges ahead.

The 2009 reforms aimed to cover the entire Chinese population with one of three (since 2012 one of two) basic social health schemes. To provide added financial protection to patients with critical illnesses, catastrophic medical insurance was initially launched in 2012 and implemented nationally in 2015. Eggleston and her co-authors determine that the expansion of health insurance has had several major successes. First, it improved access to and use of healthcare. In 2011, China achieved near-universal health insurance coverage, with more than 95% of the Chinese population covered by health insurance. Moreover, the annual inpatient hospital admission rate increased from 3.6% in 2003 to 17.6% in 2017, and admission rates for outpatient services were much higher than the global average.

Second, the expansion of health insurance coverage reduced the share of out-of-pocket heath expenses in total health expenditure, thus raising the level of financial protection. Third, catastrophic medical insurance was also effective in supplementing the basic social health insurance schemes and provided extra financial protection to a range of vulnerable groups. By 2017, more than a billion people in China were covered by such insurance.

However, much remains to be done. Out-of-pocket health expenditures remain fairly high and are one of the main reasons for catastrophic health expenses and low financial protection in China, which disproportionately affect deprived populations. Catastrophic medical insurance currently does not target underprivileged people, while medical aid is relatively small in scale and covers only a minority of patients with catastrophic health expenses.

Eggleston and her colleagues conclude that the Chinese government should focus on underprivileged populations within the current insurance system and enhance their financial protection as an important element of targeted poverty alleviation. Such targeting, the researchers emphasize, requires a clear and integrated policy encompassing the basic social health insurance schemes, catastrophic medical insurance, medical aid, and improved healthcare efficiency.

People today can generally expect to live longer and, in some parts of the world, healthier lives. The substantial increases in life expectancy underlying these global demographic shifts represent a human triumph over disease, hunger, and deprivation, but also pose difficult challenges across multiple sectors. Population aging will have dramatic effects on labor supply, patterns of work and retirement, family and social structures, healthcare services, savings, and, of course, pension systems and other social support programs used by older adults. Individuals, communities, and nations around the world must adapt quickly to the demographic reality facing us and design new approaches to financing the many needs that come with longer lives.

This imperative is the focus of a newly published special issue of The Journal of the Economics of Ageing, entitled Financing Longevity: The Economics of Pensions, Health and Long-term Care. The special issue collects articles originally written for and discussed at a conference that was dedicated to the same topic and held at Stanford in April 2017 to mark the tenth anniversary of APARC’s Asia Health Policy Program (AHPP). The conference convened top experts in health economics and policy to examine empirical and theoretical research on a range of problems pertinent to the economics of aging from the perspective of sustainable financing for long lives. The economics of the demographic transition is one of the research areas that Karen Eggleston, APARC’s deputy director and AHPP director, studies. She co-edited the special issue with Anita Mukherjee, a Stanford graduate now assistant professor in the Department of Risk and Insurance at the Wisconsin School of Business, University of Wisconsin-Madison.

The Financing Longevity conference was organized by The Next World Program, a Consortium composed of partners from Harvard University, Fudan University, Stanford University, and the World Demographic and Aging Forum, and was cosponsored by AHPP, the Stanford Institute for Economic Policy Research, and the Stanford Center on the Demography and Economics of Aging.

The contributions that originated from the conference and are collected in the Journal’s special issue cover comparative research on more than 30 European countries and 17 Latin American countries, as well as studies on Australia, the United States, India, China, and Japan. They analyze a variety of questions pertinent to financing longevity, including how pension structures may exacerbate existing social inequalities; how formal and informal insurance interact in securing long-term care needs; the ways in which the elderly cope with caregiving and cognitive decline; and what new approaches might help extend old-age financial security to those working outside the formal sector, which is a major concern in low-income countries.

Another challenge of utmost importance is the global pension crisis, caused due to committed payments that far exceed the saved resources. It is a problem that Eggleston and Mukherjee highlight in their introduction to the special issue. By 2050, they note, the pension gap facing the world’s eight largest pension systems is expected to reach nearly US $400 trillion. The problem cannot be ignored, as “the financial security of people leading longer lives is in serious jeopardy.” Indeed four of the eight research papers in the special issue shed light on pensions and inequality in income support for older adults. The other four research papers focus on health and its interaction with labor force participation, savings, and long-term care.

The issue also features two special contributions. The first is an interview with Olivia S. Mitchell, a professor at the University of Pennsylvania’s Wharton School and worldwide expert on pensions and ageing. Mitchell explains the areas offering the most promise and excitement in her field; discusses ways to encourage delayed retirement and spur more saving; and suggests several priority areas for future research. The latter include applying behavioral insights to questions about retirement planning, improving financial literacy, and advancing innovations to help people imagine themselves at older ages and save more for their future selves.

The second unique contribution is a perspective on the challenges of financing longevity in Japan, based on the keynote address delivered at the 2017 Stanford conference by Mr. Hirotaka Unami, then senior Director for policy planning and research of the Minister’s secretariat of the Japan Ministry of Finance and currently deputy director general with the Ministry’s Budget Bureau.

In Japan, decades of improving life expectancy and falling birth rates have produced a rapidly aging and now shrinking population. Data released by Japan’s Statistics Bureau ahead of Children's Day on May 5, 2019 reveal that Japan’s child population (those younger than 15) ranks lowest among countries with a total population exceeding 40 million. In his piece, Unami focuses on the difficult tradeoffs Japan faces in responding to the increase in oldest-old population (people aged 75 and over) and the overall population decline. Japan aspires to do so through policies that are designed to restore financial sustainability for the country’s social security system, including the medical care and long-term care insurance systems.

Unami argues that Japan must simultaneously pursue a combination of increased tax revenues, reduced benefit growth, and accelerated economic growth. He notes that these three-pronged efforts require action in five areas: review Japan’s pension policies; reduce the scope of insurance coverage in low-risk areas; increase the effectiveness of health service providers; increase a beneficiary’s burden according to their means; and enhance policies for preventive health care for the elderly.

The aging of our world’s population is a defining issue of our time and there is pressing need for research to inform policies intended to improve the financial well-being of present and future generations. The articles collected in the Financing Longevity special issue and the ongoing work by APARC’s Asia Health Policy Program point to multiple areas ripe for such future research.

View the complete special issue >>

Learn more about Dr. Karen Eggleston’s work in the area of innovation for healthy aging >>

Sarita Panday’s personal and professional journey from a childhood in a small village in Nepal to an academic career that has taken her across the globe to Australia, Europe, and now Stanford is a story that speaks to the power of education as a life-transforming and world-changing force. Sarita is our 2018-19 postdoctoral fellow in Asia health policy and her research focuses on improving maternal health service provision in Nepal.

The Asia Health Policy Postdoctoral Fellowship is offered annually by APARC’s Asia Health Policy Program (AHPP). On May 1, Sarita will present her research at a seminar cosponsored by AHPP and the Center for South Asia. We caught up with Sarita to learn about her work, the state of maternal health and education in Nepal, and what’s next for her career.

Q: Your research interests include health service delivery and human resources for global health, and your PhD project explored the role of female community health volunteers in maternal health service provision in Nepal. What is the state of maternal health in Nepal? How does it compare to other areas in South Asia?

While substantial progress in maternal health has been achieved over the last two decades, Nepal still has high rates of maternal deaths compared to its neighbouring countries. According to UN estimates, maternal mortality ratio (number of deaths due to pregnancy-related causes per 100,000 live births) is one of the highest in Nepal (258) compared to India (174), Bangladesh (176), Pakistan (176) or Sri Lanka (30).  Maternal deaths in Nepal’s rural areas are three times likely to be higher than in urban areas. Therefore, my research focuses on improving maternal health status in rural area.

Q: Tell us about your current research: What questions/problems you're exploring? What are some of the findings your work has revealed?

As the 2018-19 Asia Health Policy Postdoctoral Fellow at APARC, I am currently working on publications based on my PhD, which focused on improving healthcare for marginalized women in rural Nepal. My next paper, forthcoming in PLOS One, explores the underuse of healthcare services among Nepal’s marginalized communities. In this paper, I analyze the factors that hinder use of healthcare by certain ethnic groups such as Dalits (the lowest group within the Hindu caste system), Madhesi (people living in the southern plains of Nepal, close to the border with India), Muslim, and Chepang and Tamang (indigenous groups in hill villages). These ethnic groups face barriers to health service use that include lack of knowledge, lack of trust in volunteers, traditional beliefs and healthcare practices, low decision-making power among women, and perceived indignities experienced when using health centers. Therefore, community health programs aimed to improve healthcare use among such populations should consider these specific contextual elements along with health system factors.

My next manuscript (in preparation) focuses on the importance of paying community health workers, which is also one of the key findings of my PhD. I found that women volunteers appeared to be highly dissatisfied by the lack of financial incentives for their services and wanted remuneration. This finding contradicts previous claims that reported community health volunteers were happy with their status. I have just finished a first draft of the manuscript and will soon send it for review.

Apart from my fellowship at Stanford, I am volunteering to form a team of interdisciplinary researchers to improve maternal and child health among marginalized communities in Nepal. I am doing this as part of my role as an honorary research fellow in the Department of Politics at the University of Sheffield, where I also earned a PhD in public health. I recently organized a workshop in the UK to leverage partnerships across universities and the local NGO PHASE Nepal. During the workshop, I shared my experience of using participatory approaches (such as participatory video methods and policy workshops) to connect communities with policymakers, and I plan to use similar participatory approaches in my future research. The workshop successfully generated support from colleagues and the local partner.

Q: Your personal and professional journey has taken you from growing up in rural Nepal to pursuing a doctorate in Britain and now a postdoctoral fellowship at Stanford. How would you describe the situation of Nepal’s higher education system, and the demand for foreign education in the country? What are some of the lessons you have learned throughout your own years of international education?

Although Nepal has a long history of education, the current formal education system was formed only in 1951, after the establishment of democracy. In the short period since then, Nepal has made substantial progress in adult literacy rate (from 20.6 % in 1981 to 64.7 % in 2015), but the quality of the public education system remains questionable, with low opportunities for employment. There has been some improvement since the beginning of technical education as a formal sector in 1980: the Ministry of Education, Science and Technology is responsible for education in Nepal and there are currently a total of nine constituent universities with 90 affiliated universities and 1012 campuses. However, the quality of education in Nepalese universities is often controversial due to their being a playground for major political parties. And despite the government’s promises to increase its spending on public education the education budget appears to be cut each year.

As for my own experience, I graduated with a BSc Nursing degree in Nepal without realizing that I wouldn’t get a placement within the public sector. The government hasn’t yet created a position for graduates like me, which forced me to seek a job in the private sector. While I managed to find a well-paying if strenuous job in remote Nepal, I saw many colleagues who struggled to find jobs that matched their qualifications. Some of them worked voluntarily or in low-paying positions. While the Nepalese government continues to produce graduate nurses there’s no system to retain them, despite a severe scarcity of human resources for health.

Q: What's next for your career? What issues are you going to focus on in your upcoming research project?

I have recently been appointed as a Global Challenge Fellow at the University of Sheffield to work on a two-year research project in Nepal. Starting this July, I will work with rural women in two Nepalese districts (Dhading and Sindhupalchok), conducting participatory co-designed research aimed to raise awareness and understanding of the social, cultural, economic, and political factors that hamper women’s access to healthcare services. I plan to use participatory approaches, such as participatory video methods and policy workshops, to connect communities with policymakers, and to partner with PHASE Nepal to improve utilization of healthcare among the country’s marginalized populations.

I’m excited to share my work with the Stanford community in an upcoming seminar on May 1, and hope to see many friends and colleagues there.

Register to attend Sarita's seminar >>