| Since reforms and open to abroad, the China's economic reformation becomes more and more widespread, and to the extent how the market is literal incents the all social activities. All these promote the improvement of production effective, and make China's economy keeping a continuous and rapid growth rate. Although people's income and living level have been improved and it has abundant supply of social commodities, the gaps among different income groups are getting bigger. For alleviating the inequality of income allocation by literal market principle, governments are taking great efforts, such as establishing social guarantee system.With the above background, New-type rural cooperative medical system mainly depended on government's investment has been established, it has also been an important action taking for realizing poor peasants'right to have medical and health service and alleviating inequality of income allocation. But whether government's investment has effectively played an important role in income redistribution easing the situation of inequality within rural area, narrowing the gaps among farmers and promoting medical treatment level of serious illness among rural household, that need empirical evidences. So this paper, based on the theory of welfare economics, will establish the income redistribution framework of new-type rural cooperative medical system to give more empirical evidence.Government's investment is a health investment, the economic efficiency of which should be measured by the extent of alleviating of the illnesses'economic cost. The cost consists by tow parts:direct economic cost and indirect economic cost. The direct economic cost is the payment of medical and other relative services which should be taken in the curing process; correspondingly, the indirect cost is suffers' loss of efficient work time, and the loss for caring patients by cutting work time. So, the income redistribution effect of new-type rural cooperative medical system also consists of two parts:direct redistribution affect and indirect redistribution effect.Based on the diagnoses of 5996 peasants from 1500 households in 30 countries in Jiangsu and Anhui, the interview also include the direct income redistribution effect----reducing the direct economic cost for illness, by compensating the demand of medical and health service, reducing the payment for medical cure which should be formed the distribution of direct income between the rich and poor; and the indirect income redistribution effect-----new-type rural cooperative medical system will compensate the loss of work time, which should affect two parts of the welfare, and then we will, through macro level, calculate the comprehensive welfare effect in favor of the patterns of new-type rural cooperative medical system reducing the inequality of income. Finally, we will evaluate the redistribution effect by different compensation patterns, analysis the transfer direction by different guarantee systems in different income level areas, discuss which compensation patterns will be more effective in reducing the poverty level, narrowing the income gap between poor households and improving the medical treatment level of serious illness among poor households.Results show:(1) The direct income redistribution by new-type rural cooperative medical system is alleviating the trend of income inequality, the poor and the patients will get more compensation. On the one hand, the new-type rural cooperative medical system alleviate the income inequality condition in rural area; and on the other hand, it also narrows the income gaps between the patients and the healthy people, and promotes the suffers'medical cure level.The different compensation patterns by new-type rural cooperative medical system have different intensities in direct income redistribution:the compensation model supporting family account is benefit for high income group, not the poor, it makes high income group will get more compensation from the medical system, enlarge the income disparity; but compensation model supporting raising money in clinic level will be more benefit for poor, and it has positive effect in narrowing income disparity. So the compensation model with raising money at hospitalization level has lower efficient than the model adding a small illness insurance without hospitalization insurance. No matter whether is family account or raising money in clinic level, guarantee illness will increase peasants' welfare.(2)the income redistribution effect of new-type rural cooperative medical system should be helpful in reducing the working time loss, and family account is more helpful in reducing the loss for less working time. Especially for different income groups, the welfare promoted by reducing the loss of less work time is more beneficial for lower income group. The compensation models for small illnesses, by clinic account and family account etc, are more efficient in reducing the less working time loss for the lower income group than high income group, which could narrow the gaps of the loss of reducing work time between high and lower income groups(3)The comprehensive redistribution effects show that the payment for medical and health service would push GINI up, exacerbate the inequality of income. These are evidences that the payment for medical and health service is definitely an important reason for enlarging the gaps between rich and poor, it is necessary that the government should take some actions of sanitation policy to promote the welfare of lower income. Since new-type rural cooperative medical system has been implemented, it has generally improved the inequality extent among rural areas.For different compensation models, raising money at hospitalization level and raising money at hospitalization+raising money at clinic level will be more efficient in improving the income disparity, but another two compensation models with family account, raising money at hospitalization+family account, raising money at hospitalization+raising money at clinic level+family account, would be not been as well.For different income levels among areas, it would be more efficient than the lower income areas take the same compensation model, that high income areas implement the compensation model---raising money at hospitalization+raising money at clinic level, correspondingly, middle income areas should take the model of raising money at hospitalization+raising money at clinic level+family account or raising money at hospitalization+family account, which is better than the higher income areas take the same patterns.So far, there is no research about the income redistribution by new-type rural cooperative medical system for compensation for the work time loss of illness. This paper would cover this important level, make up relative researches. By establishing the framework of the effect of new-type rural cooperative medical system for work time loss, it will provide more scientific and comprehensive theoretical framework for widespread future research. The result of this paper is not only helpful for constituting the compensation policy of rural cooperative medical system in China; it also provides references for other developing countries'medical policies.
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