Interpretation of China's 2017 health expenditure: a latent profile analysis of panel data

To explore the latent structure of health financing and the institutional distribution of health expenditure (focused on hospital expenditure) in provinces, autonomous regions and municipalities of mainland China, and to examine how these profiles may be related to their externalising and internalising characteristics.

The study used panel data harvested from the China National Health Accounts Report 2018.

Mainland China's provincial data on health expenditure in 2017 was studied. A latent profile analysis was conducted to identify health financing and hospital health expenditure profiles in China. Additionally, rank-sum tests were used to understand the difference of socioeconomic indicators between subgroups.

A best-fitting three-profile solution for per capita health financing was identified, with government health expenditure (χ²=10.137, p=0.006) and social health expenditure (χ²=6.899, p=0.032) varying significantly by profiles. Health expenditure in hospitals was subject to a two-profile solution with health expenditure flow to urban hospitals, county hospitals and community health service centres having significant differences between the two profiles (p<0.001).

Per capita health financing and health expenditure spent in hospitals have discrepant socioeconomic characteristics in different profiles, which may be attributed to macroeconomic factors and government policies. The study provided new and explicit ideas for health financing and health policy regulation in China.