Shandong Province, The New Rural Cooperative Medical Compensation Mechanism

Background and ObjectWith the social and economic development in China, more and more attention is paid to rural area. To solve the problem that some families become and return into poverty because of disease, the Chinese government decided to establish the New Type of Rural Cooperative Medical System(CMS). Since 2003 CMS has been carried forwards rapidly. Perfecting the reimbursement mechanisms and improving efficiency of CMS is necessary. Ministry of Health asked to select 2 or 3 model of reimbursement system used for reference in every province. From the aim of practice,it is urged to produce a theories and techniques of CMS reimbursement actuary for the sustainable development of CMS.The study analyzes the situation and the package of CMS reimbursement in Shandong Province and give the proposal of design of reimbursement system of different area. The specific purpose of the study including, 1) Sum the theory and methodology of reimbursement mechanism design. 2) Analysis the the needs and the willings of the farmers and the behavior of the policy maker in the procedure of design of reimbursement system. 3) Compare the results of different reimbursement system in different economic area. 4) Analysis the factor which affect the CMS benefits, explore the relationships of the factors. 5) Produce the guiding framework of reimbursement system for different areas of Shandong Province, give the proposal of strategies for perfects mechanism of CMS.Data and methodsThe sources of information include two parts, the existing information and survey data. The existing information include, the document, statistics data of medical cost and reimbursement provided by the county CMS office, statistics data from regular reports provided by Health Department of Shandong Province. Survey data include pilot counties survey, interviews of local manager of different level CMS office, family households survey, the record of cost and reimbursement database backup material in 2005 of samples county .In the study, the record of 46 CMS pilot county are collected, 118 local manager were interviewed, Zhangqiu, Changle and Donga, three county are selected as samples county for family households survey, including 3340 households. Quality control method were done to guaranteed the data quality. The data were analysis by software SPSS11.5 and Microsoft Excel 2003.The main findingsThe percentage for the farmer participating the CMS was relatively higher compared with the average level of the whole country. The number was 88. 6% in Shandong Province in 2006, and was 91.3% in the three sample counties. The percentage of poverty caused by disease is above 60%. CMS is the main medical insurance system among the rural families .The percentage of the patient who should be hospitalized but not because of financial difficulties was more than 60%. The village clinic was the main choice for common disease. The most important factor be thought about when making the choice of health institution is convenience and technical level. A lot of patient chooses to buy drug in pharmacy. The rate of chronic diseases is relatively high. Most of patients of chronic diseases were not satisfied towards their health status. Most farmers were satisfied with the CMS. But the knowledge of the CMS was very poor. Half of farmers think the CMS should focus on the serious disease which would bring huge financial burden to the family. 36.89% of the interviewee think both of the cost of outpatient and inpatient should be covered and a few people suggest the cost of preventive service be covered. Increasing the co-payment is the strongest hope of the farmers. Among the local managers, 76% of the interviewees think that CMS should contribute to solving the serious disease and anti the disease risks. But in practice, the number of the participation and financial is the main factor that affects the decision-making. There is conflict between the thought and practice during the policy-making.There were four kind of model of reimburse system among the 46 counties, which is the model of medical saving account and planning inpatient cost as whole, the model of medical saving accounts and planning both inpatient cost and outpatient cost as whole, the model of planning inpatient cost and outpatient cost as whole, the model of planning only inpatient cost as whole. Chronic disease was covered in 9 counties. The cost of delivery was covered in 9 counties. The package, deductible, co-payment rate and ceiling are very different. The rate of benefits is different because of reimburse model. The rate of benefits in the area of planning inpatient cost and outpatient cost as whole is most high. The fund balances rate is 22.73% in 2005. The highest rate of the fund balances was 69. 34%. There is deficit in serval counties. The remainder rate is more high in the area of model of medical saving account. The actual co-payment rate in township hospital is higher than hospital of both county level and above. The number of the item of medicine covered by CMS payment and the deductible is the main reason for the difference between actual and name co-payment rate.In 2006, the reimbursement system was adjusted because of increased finacial budget from government. There is four types of the adjustment, which including changing model, reducing or cancel the deductible, improving the co-payment, covering the chronic disease. Compared with 2005, both benefits and co-payment level were increased. But the extent of increase of reimbursement is not fit for the increased financial because of the rising medical cost in all level of hospital. The balance of the fund was forecasted and the remained rate is 25.97%. The case study of nine counties was done. It is funded that canceling the medical saving account can improving the benefit and decrease the hospitalization. Reducing or cancel the deductible can bring the increase of the hospitalization. Improving the co-payment can bring the benefit of the outpatient and hospitalization in township hospital, and there is no obvious changement in hospitalization in the county level hospital and above. It is expressed that the service for serious disease lacks elasticity.Based on material of sample county in Shandong province, the model of the reimbursement of different area is designed. The method and step is introduced in the study. The key step is the forecast of the cost of the medical. The ratio of increasing of medical cost and the morbidity were used. The factor which affects the benefit and co-payment is analysised. The main factor is reimbursement model, copayment, the cost of inpatient and the ratio of medical cost covered. Both the adjustment of deductible and ceiling can change the benefit, but the affection of the ceiling is more obvious. As the ceiling be improved by 5000 Yuan, the co-payment rate will reduced by 0.5%-1%.Discussion and policy suggestionThe study is aimed to find the method that is easily be grasped and operated. During the process, though there is no complex mathematics model it is guided by insurance actuarial theory. Some new point was produced for the forecast of medical cost and the principle of the ceiling and so on. At the same time the reimbursement mechanism was analyzed from several direct and it is useful for help the policy-maker to master the rules of CMS.The main suggestion of perfecting the mechanism of CMS include the division the pool into out-patient part and in-patient part according to 40% and 60% respectively. The model of planning inpatient cost and outpatient cost as whole is suggested excepted the developed area. In the area where there is no planning the outpatient cost as whole chronic diseases shouled be covered. Both the chronic disease and pregnant women health service should be linked with the disease management to improve the utilization of the service. It is suggested no deductible of outpatient cost. The ceiling of outpatient payment is decided according the 1-2 times of average cost of outpatient in township hospital and village clinic. The ratio of outpatient co-payment should not lower than 20%. The deductible of co-payment of inpatient of township hospital is decided according to 2-3 times of outpatient infusion cost of township hospital. The deductible of co-payment in hospital of county level and above is decided according to 2-3 times of the cost per day in the same level hospital. The ceiling of the reimbursement is decided according to three times of the average income of local farmers, and more than 90% of patients should be covered. This study is limited to methodology because of the reason of time and the lack of proof in practice, which will be continued in the following study. Meanwhile, the proposed method is constrained by the data integrity, and in some areas it may not be suitable. Some detail problems included in the reimbursement system, for example there is only principle suggestion on drug item and lack of the further feasibility and manipulated method.