Measuring the equity of inpatient utilization in Chinese rural areas

As an important outcome of the health system, equity in health service utilization has attracted an increasing amount of attention in the literature on health reform in China in recent years. The poor, who frequently require more services, are often the least able to pay, while the wealthy utilize disproportionately more services although they have less need. Whereas equity in health service utilization between richer and poorer populations has been studied in urban areas, the equity in health service utilization in rural areas has received little attention. With improving levels of economic development, the introduction of health insurance and increasing costs of health services, health service utilization patterns have changed dramatically in rural areas in recent years. However, previous studies have shown neither the extent of utilization inequity, nor which factors are associated with utilization inequity in rural China.

This paper uses previously unavailable country-wide data and focuses on income-related inequity of inpatient utilization and its determinants in Chinese rural areas. The data for this study come from the Chinese National Health Services Surveys (NHSS) conducted in 2003 and 2008. To measure the level of inequity in inpatient utilization over time, the concentration index, decomposition of the concentration index, and decomposition of change in the concentration index are employed.

This study finds that even with the same need for inpatient services, richer individuals utilize more inpatient services than poorer individuals. Income is the principal determinant of this pro-rich inpatient utilization inequity- wealthier individuals are able to pay for more services and therefore use more services regardless of need. However, rising income and increased health insurance coverage have reduced the inequity in inpatient utilization in spite of increasing inpatient prices.

There remains a strong pro-rich inequity of inpatient utilization in rural China. However, a narrowing income gap between the rich and poor and greater access to health insurance has effectively reduced income inequality, equalizing access to care. This suggests that the most effective way to reduce the inequity is to narrow the gap of income between the rich and poor while adopting social risk protection.