Health services utilization in China: Factors and policy implications

China is a developing country struggling to provide health services in the face of rapidly rising costs of care. However, few analytical studies have been conducted nationwide that would form a basis for understanding health care delivery in China.; This study explores factors that affect demand for health services utilization and choice of providers. It uses the 1993 first nationwide household health survey in China. Analysis is based on 118,279 observations. The RAND four-equation model and a multinomial logistic regression model are used to determine factors influencing health services utilization in China. Rural and urban populations are found to be different and are analyzed separately.; Five hypotheses are developed and tested. First, more generous health insurance is expected to result in greater use of services. This hypothesis is confirmed, particularly for the urban population. Those with government and labor insurance spend Y1.2 million more per year for health care than those people with less insurance.; Second, more generous insurance is expected to result from the use of higher level facilities. This is confirmed. In urban areas, people with government and labor insurance are more likely to use county and higher level of facilities, while those without insurance or less than full coverage insurance are more likely to use clinic or township health centers.; Third, higher income is expected to result in greater use of health services. This is confirmed. Low income groups use fewer health services and have lower medical expenditures than the high income group, especially in rural areas.; Fourth, those persons with poorer health, measured as having a chronic health condition, are hypothesized to use more care This hypothesis is confirmed. People with chronic diseases use more health services and have higher medical expenditures.; Fifth, people living farther from health services are hypothesized to use fewer. This hypothesis is not confirmed, perhaps because of weak measures of distance.; The results are broadly consistent with economic theory and suggest that changes in health insurance coverage and income redistribution could be used to affect health services usage in China.