Regional price differences of medical services: evidence from China

Price levels of medical services may vary across regions with different income levels, which would raise concerns about the equal access to medical services. This study aimed to estimate the spatial price index of medical services to measure price levels across 31 provincial regions in China.

Price data were collected from medical service price schedule in each region. Two methods based on the Purchasing Power Parities were used to estimate the spatial price index and measure price differences across regions. The two-way fixed effects models were used to examine the association between medical service price levels and income levels, and further investigate the impacts of price differences on utilization of medical services and medical expenditure.

The consistent estimation results were given by two methods. Medical service price level in the highest-price region was found to be 74% higher than the lowest. There was a significant negative correlation between price levels and income levels, as well as price levels and the utilization of outpatient services. Moreover, we also found a 1% increase in medical service price level was significantly associated with a 0.34% and 0.24% increase in the medical service expense per outpatient visit and per inpatient respectively.

Regions in China had significant gaps in medical service price levels. Policymakers should pay more attention to regional price differences and take great measures such as enhancing financial protection to ensure the equal access to medical services and better achieve the universal health coverage.