Changes in health expenditures in China in 2000s: has the health system reform improved affordability

China's health system reform launched in early 2000s has achieved better coverage of health insurance and significantly increased the use of healthcare for vast majority of Chinese population. This study was to examine changes in the structure of total health expenditures in China in 2000-2011, and to investigate the financial burden of healthcare placed on its population, particularly between urban and rural areas and across different socio-economic development regions.

Health expenditures data came from the China National Health Accounts study in 1990-2011, and other data used to calculate the financial burden of healthcare were from China Statistical Yearbook and China Population Statistical Yearbook. Total health expenditures were divided into government and social expenditure, and out-of-pocket payment. The financial burden of healthcare was estimated as out-of-pocket payment per capita as a percentage of annual household living consumption expenditure per capita.

Between 2000 and 2011, total health expenditures in China increased from Chinese yuan 319 to 1888 (United States dollars 51 to 305), with average annual increase of 17.4%. Government and social health expenditure increased rapidly being 22.9% and 18.8% of average annual growth rate, respectively. The share of out-of-pocket payment in total health expenditure for the urban population declined from 53% in 2005 to 36% in 2011, but had only a slight decrease for the rural population from 53% to 50%. Out-of-pocket payment, as a percentage of annual household living consumption, has continued to rise, particularly in the rural population from the less developed region (6.1% in 2000 to 8.8% in 2011).

The rapid increase of public funding to subsidize health insurance in China, as part of the reform strategy, did not mitigate the out-of-pocket payment for healthcare over the past decade. Financial burden of healthcare on the rural population increased. Affordability among the rural households with sick members, particularly in the less developed region, is getting worse. It needs effective measures on cost control including healthcare provider payment reform and well developed health insurance schemes to offer better financial protection for the vulnerable Chinese seeking essential healthcare.