1 Introduction
The increase of health expenditures has introduced a series of problems to each country in the world, and the aging population has been considered as a dependent factor to it.[1,2] older adults population of China would reach 27% of the total population until 2050, which would add a new burden to the Chinese health insurance in the future.[3] older adults have become a widespread concern.
A previous study indicated that in health-care seeking behaviors, medical insurance can ease the economic pressure induced by medical treatment, improve the residents’ medical health service accessibility, and actively protect the people's health.[4] [5] [6] [7]
In addition to the studies that show certain medical insurances affect medical expenses in the general population, many previous studies have provided evidence for linkages between health insurance and the health care expenditure of older adults ,[8] older adults .[9] older adults in the USA experienced an average annual increase of more than 18% from 1997 to 2000 and the significant cost of medical insurance for older adults was caused by the use of brand-name drugs.[10] [11] older adults .[12]
However, evidence suggests that the impact of medical insurance to older adults or residents on different economic levels is controversial. Researchers reported that the universal health insurance in Taiwan increased the utilization of medical services, especially in both low and middle-income class; however, this trend did not affect the health and mortality.[13] older adults .[14,15] older adults and the probability of poverty due to catastrophic medical expenses.[16,17] older adults .
1.1 The health insurance system in China
Medical insurance is a major source of Chinese medical financing and payment. According to the most recent China health system reform scheme, the medical security system is one of the 4 systems within the health care reform.[18] [19] [20]
In rural areas, the new rural cooperative medical insurance scheme (NCMS) is a type of mutual aid and risk sharing health security system.[21,22] [23]
In urban areas, 2 major health insurance programs exist: urban employees can be insured under the urban employee-based basic medical insurance (UE-BMI) and unemployed urban residents can be insured under the urban residents basic medical insurance (UR-BMI). Among these, the UR-BMI is mainly used for inpatient expenses and some outpatient costs for key diseases and both the employer and employees share the financial burden.[19] “China Health Statistics Yearbook” for 2012 showed that the enrollment in the UE-BMI and UR-BMI reached 26.467 million and 27.122 million, accounting for 37.18% and 38.10% of the urban population, respectively.
At the same time, the per capita medical costs in China have sharply increased between 1990 and 2012. In 1990, medical expenses for the health care of urban and rural residents were 25.7 Yuan and 19 Yuan, respectively. However, in 2012, the expenses of urban and rural residents on healthcare were 1063.7 Yuan and 513.8 Yuan, respectively. With the ageing population, the Chinese government has felt the necessity and urgency to improve the rights of medical security and the interests of older adults . Therefore, numerous measures have been taken to alleviate the contradictions between supply and demand of medical security and the interests of older adults in recent years. For example, in 2007 July, the State Council promulgated “The State Council guidance on the pilot urban resident basic medical insurance” .
1.2 Research question
In previous investigations of medical services for older adults , few studies have explored the use of medical insurance and its influence on medical expenses for older adults . In addition, most of the data about costs was derived from different levels of either medical insurance center or hospital, rarely involving economic information, such as individual and family income. In general, among studies of basic medical insurance in China, some continued the discussion of the medical insurance policy, to increase fairness and effectivity of various medical insurance operations; others discussed the medical insurance coverage and cost of health care. Few studies exist that have collected and analyzed the data from the view about service users of medical insurances, and evaluated the impact of medical insurance on older adults ’ medical expenses.
Since there has been a long-standing debate and very little is actually known about the subject for China, we conducted an exploratory analysis on the impact of medical insurance on the medical expenses from the view of older adults as the service users. The emphasis of this paper was to address the following 3 questions:
1. What is the current status of the medical expenses of older adults in China, including the total medical expenses, part of household payments for medical expenses, and part of the medical insurance paying for medical expenses?
2. What is the effect of health insurance on medical expenses of older Chinese?
3. How does medical insurance as the main payment affect the medical expenses of older adults ?
2 Materials and methods
2.1 Data and sample
The data used in this study mainly originated from the Center for Healthy Aging and Development Studies, Peking University in 2014—the seventh wave “Chinese longitudinal Healthy Longevity Survey (CLHLS)”. In this investigation, the total sample size of individuals aged 60+ years was 7168. We removed the samples with medical expenses of 0 Yuan or with missing data, because these older people could not be considered to incur medical expenses. Therefore, the rest of the total sample size of older adults in both urban and rural areas was 4376, which accounted for 61.05% of the total sample.
2.2 Variables and measures
The dependent variables in our study was the total medical expenses characterized by question: “how much did you spend on medical expenses last year?” We transformed the obtained data on medical expenses into logarithmic form, since the distribution of medical expenses showed a remarkable skewness.
The key independent variables were:
which type of medical insurance older participants were enrolled in, and was presented by dummy variables capturing UE-BMI, UR-BMI, NCMS, commercial insurance, and others;
which type of main payment covered the participant's medical expenses.
The variable was defined as: out-of-pocket spending, UE-BMI, UR-BMI, NCMS, commercial insurance, no money to pay, and others. We set the out-of-pocket spending as the reference.
We also control for a variety of independent variables affecting medical expenses. The demographic characteristics included age (60–79, 80+), gender (male, female), residence (rural area, urban, and town), marriage (not in marriage, in marriage), education (illiterate, 1–6 years in school, 7+ years in school), pension (no, yes). Annual per capita income was set as continuous variables. Medical service (no, yes) was based on the respondents’ answer to the question “Can you get adequate medical service when you are sick?”. Self-reported health was based on the question “How do you rate your health at present?” and self-rated economic status was based on the question “How do you rate your economic status compared with others in your local area”, which contained 5 categories: (1) very bad; (2) bad; (3) so-so; (4) good; and (5) very good.
2.3 Statistical analyses
For standard descriptive analysis, Kruskal–Wallis tests were applied to analyze the influence of single factors on the medical expenses of older adults . In this study, we compared different models by gradually introducing different types of independent variables. The independent variable of model 1 only introduced personal basic information. We added the per capita income of the family, medical service, and health status into model 2. Then, we introduced the type of insurance into model 3 as an independent variable, and the independent variable of model 4 included the main payment of the insurance. We also used 4 multiple linear regression models to screen the influencing factors of direct medical cost factors with the software R3.5.0, which elaborated the influence of the particular medical insurance system on medical expenses.
3 Results
3.1 Description of the sample
As shown in Table 1 , the total sample size of older adults in urban and rural areas was 4376. The constituent ratios of young older adults (60–79 years old) and oldest older adults (≥ 80 years old) were 35.2% and 64.8%, respectively. Men accounted for 46.3%, and women accounted for 53.7%. Older adults in rural areas accounted for 50.3%. The research objects with non-marital status accounted for 58.7% and those currently married accounted for 41.3%. Participants who did not accept education, those with years of education between 1 year and 7 years, and those with up to 7 years and above accounted for 55.8%, 32.4%, and 11.8%, respectively. We also found that 19.1% of older adults had pensions and 96.2% of older adults could get adequate medical service at present. While investigating the health status of old people, we found that the proportion of self-rated health that answered fair, good, and excellent were 40.2%, 32.9%, and 8.1%, respectively.
Table 1: Kruskal–Wallis test for medical expenses of the older adults over the past year.
This survey showed that the proportions of older adults who participated in UE-BMI, UR-BMI, NCMS, and commercial medical insurance were 10.8%, 8.4%, 72.7%, and 0.9%, respectively. For the main insurance to pay the medical expenses, we found that 46.8% of older adults paid the health care service by out-of-pocket spending, while those who used the NCMS to pay the incurred costs only accounted for 34.8%. Other insurances such as the UE-BMI, the UR-BMI, and the commercial medical insurance accounted for 11.9%, 5.3%, and 0.1%, respectively. Older adults who did not have the money to pay accounted for 0.1%.
Using Kruskal–Wallis tests for the single factor analysis of medical expenses over the past year showed that apart from age, residence, marriage, education, pension, medical service, income, self-rated health, the type of insurance, and main payment could also influence the medical expenses of older adults .
Table 2 presents the total medical expenses, households payment, and medical insurance payment of older Chinese who had medical expenses in 2014. The median of medical expenses was 1500 Yuan, in which the median of household payment was 200 Yuan, and the median of insurance payment was 500 Yuan.
Table 2: Description of the income of family and medical expenses of older Chinese.
3.2 Influence of medical insurance on medical expenses
Multiple regression analysis showed that the factors influencing medical expenses differed. Table 3 shows the different influential factors on the medical expenses of older adults in China. We found all 4 regression models to be statistically significant.
Table 3: Regression analysis coefficient of the total medical expenses of the older adults over the past year.
In model 1, except for the age and education, individual-level factors including gender, residence, marriage, and pension were statistically associated with medical expenses (P < .01). We added the income, medical service, and self-rated health in Model 2. Controlling for the personal basic situation, income, and self-rated health affected medical expenses (P < .001). In model 3, different types of medical insurance were introduced. The NCMS had a negative impact on medical expenses while the UR-BMI had a positive impact.
Compared to model 4 in Table 3 , we found that the income and self-rated health also affected medical expenses, and participating in NCMS were significantly related to the level of medical fees for older adults that could reduce the cost of health care. Insurances with main payment also had different effects on medical expenses, and the UE-BMI, UR-BMI, NCMS, and the other medical insurance as the main payment exerted positive influences on medical expenses of older adults .
4 Discussion
Debates remain although the Chinese government has conducted a massive reform on the health insurance system. To verify the impact of medical insurance on medical expenses for older Chinese, we analyzed various parameters on health insurance program and health expenses from the dataset based on CLHLS in 2014 which collected from all over China.
This survey showed that the total proportion of older adults who participated in 3 main health insurances program (UE-BMI, UR-BMI, or NCMS) is about 91.9%, in which we can say that the coverage of health insurance is universal among elder aged 60 years and more who incurred medical expenses. The proportion of older adults who purchased the 3 main health insurance as their main payment for the medical expenses was about 52% and still, 46.8% of older adults paid all or part their medical billings by out-of-pocket spending. Surely the health insurances have greatly affected the patterns of paying but there are still plenty of parts in medical expenses which can not be paid by health insurance. As for the specific medical expenses, we found that the median of the medical expenses covered by medical insurance was 500Yuan, which was higher than the mean of households paying. We may say that health insurance has relived the budget of health expenses on older adults and their families.
4.1 Influence of basic personal information on medical expenses
Our research has extended the existing studies by analyzing the single factor of health insurance using Kruskal–Wallis test. The study showed that health care costs were different between gender and old women could cost significantly higher than the old men. Previous studies have shown that women live longer than men and have poorer health when getting older,[24] older adults with compulsory education is stronger. Therefore, this group was more willing to pay more medical expenses to obtain better health service utilization.[25] older adults . De Nardi reported that medical expenses that quickly increase with permanent income and low economic status might lead to poor health.[26] [27] older adults who had inferior health status often paid higher medical costs. Martin reported that the change in the health status of the whole population affected health care costs.[28] older adults are a special group and require more medical expenses to improve their health compared to young people[29]
Using this dataset derived from a large sample of old persons in China, we found that if only social demographic factors were included into the regression models, gender, residence, marriage, and pension would influence the medical expenses. This means that without the influence of other factors, these 4 factors would be the main cost deciding factors. The cost of health care for older people who live in urban areas or who have marital status is higher. We used pension as a reflection on previous work status for older adults . An interesting finding is that pension showed a great influence on the medical expenses of older adults . One reason may be that older adults with pension have more financial freedom. After we introduced other variables, we found the influence of gender, residence, marriage, compulsory education, and pension on the medical cost of people of old age was still statistically significant.
Unexpectedly, age did not affect the cost of health care for older adults , which is inconsistent with previous studies. For example, Garfinkel suggested that age impacts the medical expenses of older adults [30] [31] older adults .
4.2 Influence of different types of medical insurance on medical expenses
We also built 4 different multivariate regression models to examine the influence of health insurance types and payments. According to these models, different medical insurance programs pose different impacts on medical costs. Participating in the NCMS for older adults had a larger impact on the medical expenses than UE-BMI, UR-BMI, commercial medical insurance, and other medical insurance. Therefore, the participation of NCMS is helpful to reduce the pressure of medical costs. Jing considered that compared to those who had new rural cooperative medical insurance, the families that did not participate would be more likely to impoverish if they contracted a disease.[32] older adults .
The medical security system in China is a multi-level health security system. Except for basic medical insurance (including NCMS, UE-BMI, and UR-BMI), other types of medical insurance contain maternity insurance, industrial injury insurance, civil servants allowance, free medical services, and health benefits.[33] older adults to partially pay their medical expenses.[34]
However, we also found that in urban areas whether older adults participate in the UE-BMI and the UR-BMI does not affect their medical fees. This means that since the implementation of the Chinese medical insurance system, the UE-BMI and the UR-BMI exert an important influence on medical expenses of the entire population[35] older adults in urban areas. But the significance of older adults in urban who participate in NCMS is unexpected. We may think the migration from rural areas to urban areas and urbanization drive this significance together, and older adults hold the same medical insurance during transformation. In consequence, both UE-BMI and UR-BMI did not work for older adults in urban areas. This indicates that it is necessary to increase the participation rate of urban medical insurance for older adults . In general, implementation of the basic medical insurance for older adults in urban areas could not meet the insurance demand of older adults .
4.3 Influence of insurances as main payment on medical expenses
After analyzing the influence of insurances as main payment on the medical expenses of older Chinese in 2011, our analysis found that the UE-BMI, UR-BMI, and NCMS as main payment methods were obviously effective in relieving the medical expenses of older Chinese compared with out-of-pocket spending. However, all 3 main medical insurances as payments increased their medical expenses and NCMS shows a low ratio. The potential reason could be the vast majority of old people participated in the NCMS. The role of this medical insurance is more obvious; therefore, if we improve the coverage rate and reimbursement ratio of the NCMS, this could be helpful to ease the medical costs of rural older adults . Simultaneously, the commercial medical insurance is obtained by people who have a good economic situation and this insurance can pay for a large proportion of the medical expenses to ease the cost of required medical care.[36] older adults with no significance. Therefore, we should realize the necessity to strengthen the development of commercial medical insurance, which could alleviate the shortage of the medical insurance system for the demand of older adults .
However, some limitations are notable. First, the data we used may be subject to measurement errors, because it was based on the respondents’ self-reported information. Second, the data in CLHLS is lacking specific details for different diseases in the outpatient and inpatient cost for older adults , thus we could not analyze the impact of medical insurances on the outpatient and inpatient cost for specific diseases. Finally, our study only used cross-sectional data for analysis, which is difficult to infer the causal effect of medical insurance on medical expenses.
5 Conclusion
In conclusion, the influence of different types of medical insurances as main payments on the medical expenses of the older adults is varied. Implementation should be taken to relieve the medical expenses of older adults . Firstly, the enrollment of medical insurance for older adults can be strengthened, such as to lower threshold participation of the UR-BMI to expand their coverage into urban areas. Furthermore, it is particularly urgent to improve the reimbursement ratio of the NCMS for older adults in rural areas. Simultaneously, insurance plans should be improved by expanding the benefit package to build a more efficient health system. We also found that expanding social assistance institutions, private association and pension institutions seems particularly important to help old people in China.
Acknowledgments
We would like to thank the Center for Healthy Aging and Development Studies, Peking University.
Author contributions
Conceptualization: Yanbing Zeng, Ya Fang.
Data curation: Jiecheng Luo, Long Ou, Manqiong Yuan, Zi Zhou, Yaofeng Han.
Formal analysis: Jiecheng Luo.
Funding acquisition: Yanbing Zeng.
Methodology: Yanbing Zeng.
Project administration: Ya Fang.
Supervision: Ya Fang.
Writing – review & editing: Jiecheng Luo, Long Ou, Ya Fang.
Ya Fang orcid: 0000-0002-9895-3234.
References
[1]. Getzen TE. Population aging and the growth of health expenditures. J Gerontol 1992;47:S98–104.
[2]. Zweifel P, Felder S, Meiers M. Ageing of population and health care expenditure: a red herring? Health Econ 1999;8:485–96.
[3]. World Health Organization, Alwan A. Global Status Report on Noncommunicable Diseases 2010. 2011.
[4]. Elsevier, Cutler DM, Zeckhauser RJ. The anatomy of health insurance. Handbook of Health Economics 2000;563–643.
[5]. Xu K, Evans DB, Kawabata K, et al. Household catastrophic health expenditure: a multicountry analysis. Lancet 2003;362:111–7.
[6]. World Bank Publications, Wagstaff A, Pradhan M. Health Insurance Impacts on Health and Nonmedical Consumption in a Developing Country. 2005.
[7]. Young GJ, Cohen BB. Inequities in hospital-care, the Massachusetts experience. Inquiry-J Health Car 1991;28:255–62.
[8]. Dunlop DD, Manheim LM, Song J, et al. Gender and ethnic/racial disparities in health care utilization among
older adults . J Gerontol B-Psychol 2002;57:S221–33.
[9]. Stuart B, Gruber-Baldini AL, Fahlman C, et al. Medicare cost differences between nursing home patients admitted with and without dementia. Gerontologist 2005;45:505–15.
[10]. Thomas CP, Ritter G, Wallack SS. Growth in prescription drug spending among insured elders. Health Affairs 2001;20:265–77.
[11]. Finkelstein A, McKnight R. What did Medicare do? The initial impact of Medicare on mortality and out of pocket medical spending. J Public Econ 2008;92:1644–68.
[12]. Card D, Dobkin C, Maestas N. The impact of nearly universal insurance coverage on health care utilization: evidence from Medicare. Am Econ Rev 2008;98:2242–58.
[13]. Chen L, Yip W, Chang M-C, et al. The effects of Taiwan's National Health Insurance on access and health status of the elderly. Health Econ 2007;16:223–42.
[14]. Chou S-Y, Grossman M, Liu J-T. The impact of National Health Insurance on birth outcomes: a natural experiment in Taiwan. J Develop Econ 2014;111:75–91.
[15]. Keng S-H, Sheu S-J. The effect of national health insurance on mortality and the SES-health gradient: evidence from the elderly in Taiwan. Health Econ 2013;22:52–72.
[16]. Sun X, Jackson S, Carmichael G, et al. Catastrophic medical payment and financial protection in rural China: evidence from the new cooperative medical scheme in Shandong Province. Health Econ 2009;18:103–19.
[17]. Wagstaff A, Lindelow M, Gao J, et al. Extending health insurance to the rural population: an impact evaluation of China's new cooperative medical scheme. J Health Econ 2009;28:1–9.
[18]. Opinions of the CPC Central Committee and the State Council on Deepening the Health Care System Reform. [cited 2018 18 Dec]; Available from:
http://www.china.org.cn/government/scio-press-conferences/2009-04/09/content_17575378.htm [19]. Dong KY. Medical insurance system evolution in China. China Econ Rev 2009;20:591–7.
[20]. China NBoSo. Statistical Communiqué of the People's Republic of China on the 2017 National Economic and Social Development. [cited 2018 18 Dec]; Available from:
http://www.stats.gov.cn/english/pressrelease/201802/t20180228_1585666.html [21]. Jiang Q, Jiang Z, Zhao M, et al. Evaluation of a pilot cooperative medical scheme in rural China: impact on gender patterns of health care utilization and prescription practices. Bmc Public Health 2011;11:50.
[22]. You XD, Kobayashi Y. The new cooperative medical scheme in China. Health Policy 2009;91:1–9.
[23]. Center for Health Statistics and Information, National Health and Family Planning Commission. An analysis report of national health services survey 2013: Peking Union Medical College Press; 2015.
[24]. Gu D, Zeng Y. Health. Healthiness of survival and quality of death among oldest old in China using fuzzy sets. J Aging 2012;24:1091–130.
[25]. Guralnik JM, Land KC, Blazer D, et al. Educational status and active life expectancy among older blacks and whites. N Engl J Med 1993;329:110–6.
[26]. De Nardi M, French E, Jones JB. Medicaid insurance in old age. Am Econ Rev 2016;106:3480–520.
[27]. McIntyre D, Thiede M, Dahlgren G, et al. What are the economic consequences for households of illness and of paying for health care in low- and middle-income country contexts? Soc Sci Med 2006;62:858–65.
[28]. Martin BI, Deyo RA, Mirza SK, et al. Expenditures and health status among adults with back and neck problems. JAMA 2008;299:656–64.
[29]. Goldman DP, Shang BP, Hattacharya J, et al. Consequences of health trends and medical innovation for the future elderly. Health Affairs 2005;24:W5R–R17.
[30]. Garfinkel SA, Riley GF, Iannacchione VG. High-cost users of medical care. Health Care Financ Rev 1988;9:41–52.
[31]. Roudsari BS, Ebel BE, Corso PS, et al. The acute medical care costs of fall-related injuries among the US
older adults . Injury 2005;36:1316–22.
[32]. Jing S, Yin A, Shi L, et al. Whether new cooperative medical schemes reduce the economic burden of chronic disease in rural China. PloS One 2013;8:e53062.
[33]. Baozhen W. Analysis of building and improving multi-level health security system. Health Econ Res 2008;3–7.
[34]. Jia LY, Yuan BB, Huang F, et al. Strategies for expanding health insurance coverage in vulnerable populations. Cochrane Database Syst Rev 2014;11: Article Number: CD008194.
[35]. Talampas RG. Review of Experience of social health insurance in three Asian countries: China, Thailand, and Vietnam. Philippine Institute for Development Studies; 2014 [cited 2019 14 Sep]; Available from:
https://pidswebs.pids.gov.ph/webportal/CDN/PUBLICATIONS/pidsdps1446.pdf .
[36]. Jacobson JJ, Epstein JB, Eichmiller FC, et al. The cost burden of oral, oral pharyngeal, and salivary gland cancers in three groups: commercial insurance, Medicare, and Medicaid. Head Neck Oncol 2012;4:15.
