Social Protection Brief: Strengthening Provider Payment Methods for Rural Health Insurance in the People’s Republic of China

With its rapid progress during implementation in 2008, the NRCMS was able to cover 100% of the People’s Republic of China’s counties and enrolled a total of 833 million people (94% of the target population) in 2009. This achievement made it the largest insurance scheme in the world. By reducing out-of-pocket expenditures for health care, the NRCMS represented a major step toward a more equitable and efficient rural health financing system. Increased funding for this scheme has translated into a higher level of financial protection for the insured rural residents. Actual reimbursement rate increased from 25% in 2004 to 41% in 2009.

However, the design of the NRCMS and existing health care provider payment methods put upward pressure on the cost of health care without necessarily improving the quality of health services. The technical assistance was designed to reform provider payment methods and strengthen the health services purchasing capacity of the NRCMS.

Key Points

• The technical assistance supported the Ministry of Health to adopt policy recommendations for reforming health provider payment methods to help address the high cost of care in the People’s Republic of China.
• A systematic and evidence-based approach to reform payment mechanisms for health care providers is necessary.
• Sufficient financial and human resources need to be allocated in impact assessments when designing and proposing policy reforms.