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This thesis is comprised of three empirical studies on health care reforms in rural China. It specifically examines the determinant of enrolment in the social health insurance program, the effects of the insurance on health care utilization, and the extent of income-related inequity in the use of health care before and after the reforms. Chapter 2 analyses the determinant of enrolment in the New Rural Cooperative Medical Scheme (NRCMS) from 2004 to 2006. The results show that people who use low-level public health facilities (village clinics or town hospitals) are more likely to be insured while people who use high-level public health facilities (county or city hospitals) are less likely to be covered. The relationship remains strong and significant after controlling for various groups of independent variables, such as demographics, socio-economic characteristics and health variables. The results may be attributed to generous reimbursements for health services delivered by low-level health facilities, making insurance more attractive for people who use primary care. However, the fact that people who use high-level facilities are less likely to purchase the NRCMS may indicate problems related to weak health systems at the primary level and a breakdown in the referral system. Chapter 3 provides evidence on the effectiveness of the NRCMS on health care utilization to explore whether the insurance has helped patients to obtain more and better quality health services. As the program is a non-random policy initiative rolled out nationally, various matching methods with difference-in-difference (DID) models are employed based on data from the China Health and Nutrition Survey (CHNS). The results show that the introduction of the NRCMS was not clearly related to the overall use of medical care, but it may have directed patients from town hospitals towards village clinics and county hospitals. On the one hand, the NRCMS appears to partly rationalise the use of health services, with some increase in the use of primary care. On the other hand, the insurance may also alleviate financial barriers to accessing higher levels of medical facilities and help patients to obtain better quality health care. Chapter 4 examines how the income-related inequity of health care utilization in China develops from 2000 to 2009, the period before and after the health care reforms. The first part of the analysis uses Concentration Indices and Erreygers’ Indices of the need-standardized use of different types of health services and different levels of health facilities. Pro-rich inequity emerges with respect to the use of preventive care and county hospitals, and pro-poor inequity is found in the use of folk doctors and village clinics. The results indicate that the rich are more likely to obtain formal and better quality health services. The second part of the analysis assesses the contribution of various need and non-need factors to total inequity in health care use and shows that inequity is mainly driven by income. Therefore, policies that address the unequal distribution of income would help to reduce the degree of horizontal inequity in the use of health services.

The health policy change in China between 2003 and 2009 was profound. In 2003, the Chinese government changed its response to the Severe Acute Respiratory Syndrome (SARS) outbreak from initial passivity to proactivity. Following the SARS outbreak, in 2005 the Chinese government started major healthcare reforms. During this process, the health policy direction then changed from marketisation towards being more government-led. Previous research has explained health policy change mainly from bureaucratic perspectives that considered the government playing the main role. This thesis explains how and why health policy changed by focusing on three actors outside the political system. I argue that, after the SARS outbreak, experts, the media, and international organisations influenced the health policies as a ‘Policy Entrepreneurial Coalition’ (PEC), the result of which was a combination of normal and paradigmatic policy changes between 2003 and 2009. This is a qualitative study. I conducted fieldwork in China involving semi-structured interviews of policy insiders and outsiders. The policy insiders are government officials in the Ministry of Health. The policy outsiders are: domestic Chinese experts in social science, health economics, and health; external (foreign) experts who were involved in China’s health policymaking; journalists in national media and other commercialised traditional media; and representatives of international organisations in China. I also did content analysis of both policy documents and media reports. I identified three cases: the health policy change during the SARS outbreak, the initiation of the healthcare reform, and the health policy change during the healthcare reform policymaking. This thesis makes three major contributions. First, it documents the health policy change between 2003 and 2009. Second, previous studies focused on bureaucratic bargaining during policymaking in China, but I examine roles of policy outsiders, who have conventionally been neglected in China’s policy process. Third, to explain the influence of the outsiders, I examine the policymaking process within the central government and how the policy outsiders interacted with the policy insiders. In doing so, this thesis contributes to the understanding of China’s politics and policy processes.

China’s remarkable economic growth heralds substantial improvements in population health for the Chinese people. While economic growth in some respects acts as a positive stimulus to the health sector, it also brings challenges to the health system, in particular, a widening inequity in healthcare across the social spectrum, rising healthcare costs and low efficiency in health provision. The overarching aim of the thesis is to investigate whether inequities and inefficiencies exist in China’s healthcare system. It then seeks to understand, whether and to what extent a newly developed social health insurance scheme—the New Rural Cooperative Medical Scheme (NCMS)—responses to issues of inequities and inefficiencies in China’s healthcare system. This thesis uses a variety of analytical tools, such as the Concentration Index, Decomposition Analysis, Two-part Regression Analysis and Differences-in-Differences analysis. Data from a longitudinal individual level survey—the China Health and Nutrition Survey of 2004, 2006 and 2009—are used. The findings of this thesis suggest that inequalities in health and health care in China are ubiquitous and favouring better-off socioeconomic groups. Health status for the urban poor is surprisingly worse than their rural counterparts; more than two-thirds of the inequalities for the rural population are driven by socioeconomic factors. In rural areas, the NCMS was introduced to improve equity in access to healthcare and financial protection to rural farmers in 2003. This thesis finds that, even though the coverage of the NCMS reached more than 97% in 2009, the poor were still less likely to use formal care, such as preventive care, and were more likely to use folk doctor care compared with the rich. They may also have difficulty in meeting the costs of care that they need, and have to pay a substantial fraction of their incomes on healthcare. This thesis also finds that the NCMS may exacerbate the problem of inefficiency in healthcare provision because the scheme may lead to cost escalation in healthcare. Outpatient treatments for the NCMS participants incur significantly higher pre-reimbursement per episode costs than those for the uninsured. This pre-reimbursement inflation in costs is most noticeably observed at village clinics and township health centres—the backbone of the health system for poor rural farmers—than at county and municipal hospitals. This thesis urges policy makers to explore ways to improve equitable access and control supplier-induced demand in health care in China. In terms of the NCMS, it is important to improve the benefit package for both outpatient and inpatient care, and to offer additional benefits for the poor households. The government should also reform provider payment mechanism, regulate provider behavior, as well as implement other measures to prevent over prescribe of medicines and over supply of healthcare.