Regional level: The joint roles of economic development, health service utilization, and welfare policies in medical impoverishment
Households in underdeveloped central and western regions of China are subject to greater risk of MI. It is noteworthy that while some central provinces are not seriously affected by poverty, some households in these areas have suffered severe MI after paying for medical expense. Meanwhile, in the western provinces where the poverty rate is high, the rate of MI is not so high. From this survey, the admission rate in the central region (8.0%) is lower than that in the western region (8.6%), but the average hospitalization expenses in the central region is higher than that in the western region.7 The relatively lower utilization of health services in the central region does not contribute to a lighter economic burden. This reflects that regional differences exist in the design of medical insurance schemes, which lead to different patterns of economic burden.
The overall design of the national poverty alleviation and medical health insurance reform is crucial. In the early stage of China’s poverty alleviation efforts, the country adopted several measures to address poverty in different regions. Since 1996, the Chinese government has identified poverty alleviation projects that provide financial assistance to nine provinces in the eastern region and 10 provinces in the western region.8 From 1995 to 2012, the average annual growth rate of per capita transfer payments in the western region was 20.3%, higher than that in the central region.9 Meanwhile, according to our calculations, the reimbursement rate in the central region (55.9%) was lower than that in the western region (58.2%). Therefore, it is obvious that the economic burden of diseases depends not only on the level of economic development of the region itself, but also on the healthcare needs and service utilization of the people and the design of the medical insurance system and other welfare systems.
Household characteristics: Poverty and health service utilization are indicative of households with high incidence of medical impoverishment
We summarized the top five household characteristics associated with the highest MI incidence and found that households with inpatient members, those with NCD members, and those at low economic levels suffered the highest incidence of MI. When the determinants of MI are combined together, the incidence of MI was nearly six times that of the national average, especially for poor households that have more than two inpatient members—these had the highest incidence of MI at 35.4%. A family’s economic level and health insurance utilization were found to be indicative of those most vulnerable to MI. 10 This finding is consistent with some previous studies in Korea, which demonstrated that the rate of catastrophic health expenditure in the poorest group was 18.0%, higher than that in the richest group. 11
Disease characteristics: Chronic diseases lead to medical impoverishment
The diseases that led to MI were mainly chronic diseases.12-14 Among the top 10 diseases that caused poverty, five were NCD diseases. Malignant tumor presented the highest risk for MI. China has become a place with high incidence of malignant tumors, accounting for about 22% of the global incidence of tumor diseases. 15 Although China has launched since 2012 major disease medical insurance schemes for patients to deal with the economic burden of such diseases, the compensation level and benefit coverage for major diseases still need to increase.16 Some tumor diseases, such as benign brain tumor, were not even covered by the major disease medical health insurance schemes, contributing to the high economic burden of residents. Moreover, patients suffering from mental illness shared more OOP expenses due to insufficient reimbursement. Those who enrolled under MIUE for mental illness could only enjoy a 53.9% reimbursement rate compared with those who enrolled for diabetes, who enjoyed 81.5%. Meanwhile, due to the long treatment period for chronic diseases, related indirect expenses such as transportation, nursing, and preventive health care expenses, as well as time lost, were not included in the scope of the reimbursement.17-18 All these factors contributed to chronic diseases becoming the risk factor that pushed households into MI.
Medical insurance scheme level: The inequity existing in different medical insurance schemes
Our results showed that different medical insurance schemes led to different degrees of risk of MI. NCMS enrollment was associated with the highest risk of MI, with incidences as high as 9.1%, approximately 4.79 times that of UE-BMI enrollment. The integrated medical insurance scheme was designed to alleviate inequity among different groups; however, at the initial stage, MI was still high at 6.3%. The fundamental reason for this inequity among different medical insurance schemes is the imbalanced design of the financing and reimbursement levels and the benefit package, making it impossible for enrollees to achieve equal access to health services. NCMS, with its relatively lower reimbursement level and insufficient benefit package, provided poor economic protection for residents in China.19 China’s rural population is large, and it is a group that suffers from major and chronic diseases that lead to significant medical expenses. 20 Due to NCMS’s insufficient compensation level, rural residents have become the main high-risk group for impoverishment. Therefore, it is essential to strengthen the top-level design of the medical insurance system and eliminate the imbalance among insurance schemes to alleviate the risk of IM.21
Determinants of the incidence of medical impoverishment
Our logistic regression results revealed that the determinants of MI include demographic factors, people’s healthcare needs and service utilization, and the type of medical insurance. Having heads of households with higher education level and who are employed and are married was deemed a protective factor against the occurrence of MI, consistent with previous studies. Households with a high economic level were better at dealing with the burden of diseases and enjoyed a higher capacity to pay, enabling them to avoid impoverishment.22 Moreover, the determinants related to health service needs and utilization were confirmed to be significantly associated with the occurrence of MI, including households with NCD members and inpatient members. The more NCD members and inpatient members the households had, the more risk it was for these households to get trapped in MI. However, inadequate use of health services was found to be associated with avoidance of MI. Members of households who had given up on medical treatment prevented the respective households from spiraling into MI because not using health services meant no burden from medical expense. The same conclusion has been demonstrated in a study in Thailand.23
A combined strategy to make poverty alleviation more effective
By the end of 2017, the size of China’s poor population was 30.5 million people.24 Due to wide-ranging factors such as the aging of the population and social, economic, and geographical imbalances, poverty alleviation has proved to be challenging. To achieve comprehensive poverty alleviation by 2020, an average of more than 10 million people need to be lifted out of poverty each year. Now is the time to be absolutely precise with regard to the steps taken toward poverty alleviation. How to define the precise target population and how to distribute the country’s resource to help the people at risk of MI have become top priorities.
Due to multiple vulnerabilities of the poor population, it is no longer meaningful to divide the poor according to the national poverty line. The most vulnerable population can be screened out by accurately identifying specific family characteristics.25 Having low income is one of the main causes of poverty but it is not as significant as poor health. If we continue to use income as the only criterion for identifying the poor, the situation will arise wherein right after some people have been lifted out of poverty, other people fall into poverty because of medical expenses. Therefore, this study provides multidimensional criteria to determine vulnerable families, specifically, poor families with at least one inpatient, those with more than two NCD members, those with members afflicted with tumor diseases, and those whose heads are unemployed, illiterate, or retired.
Establishing an eligibility screening method that uses multi-dimensional criteria could enable the precise identification of the vulnerable poor who are most at risk of MI. Then multiple targeted interventions and poverty alleviation strategies can be carried out to deal with diseases. In addition to the three basic medical insurance systems, MFA—the catastrophic disease medical insurance—should also play a complementary role. It is important to abolish the deductible line and upper limit for the poor, increase the reimbursement ratio, and design special preferential medicine purchases for the poor. In this regard, Australia's approach is worth learning from. Specifically, the Australian government has set a maximum limit of the annual OOP payment of medicines for patients. The upper limit for the normal population (A$ 1,317.2) is higher than that for the vulnerable population (A$ 336). Once the medicine payment of a patient (who is vulnerable to poverty) exceeds the upper limit, the excess part is subsidized.26 We should not only improve on the security provided by medical insurance, but also standardize the terms of services of health service providers. In the market economy, doctors may take advantage of information asymmetry between doctors and patients, thereby pursuing personal benefits. As a result, patients would have no choice but to accept all the examinations and treatments prescribed by the hospital, thereby making accumulated costs a bottomless pit. Therefore, it is necessary to standardize the treatment plan by adopting diagnosis-related-group payments for inpatient care. It can not only reduce residents’ medical expenses, but also avoid wasting medical funds for poor people.
As the saying goes, “Give a man a fish and you feed him for a day. Teach him how to fish and you feed him for a lifetime.” Analogous to this saying, instead of simply providing economic, medical, and housing assistance to the poor, alleviating poverty is more important when it comes to helping poor people support themselves. Therefore, it is important to provide measures to alleviate industrial poverty and employment poverty among the poor. In this light, it is helpful to organize national leading enterprises to cooperate with poverty-stricken counties and expand the marketing channels of agricultural products, for instance, by selling grains and fruits online. Moreover, increasing the income of labor services can be achieved through job subsidies and loan support programs to encourage poor families to participate in cleaning, road protection, water management, disability assistance, old-age care, and so on.27 In addition, poverty alleviation requires stronger government leadership to set up new systems that would effectively coordinate various departments in the whole society. Indeed, health poverty alleviation needs to be supplemented by industrial and employment poverty alleviation measures.