Inequality of Opportunity in Health Care in China: Suggestion on the Construction of the Urban-Rural Integrated Medical Insurance System

Sun, Jiawei and Ma, Chao and Song, Ze and Gu, Hai (2013): Inequality of Opportunity in Health Care in China: Suggestion on the Construction of the Urban-Rural Integrated Medical Insurance System.

Abstract

This paper investigates the urban-rural inequality of opportunity in health care in China based on the theory of equality of opportunity of Roemer (1998). Following the compensation principle proposed by Fleurbaey and Schokkaert (2011), this paper establishes a decomposition strategy of the fairness gap, which we use for the measurement of the inequality of opportunity in the urban-rural health care use. Empirical analysis using the CHNS data shows that the ratios of the fairness gap to the directly observed average urban-rural difference in health care are 1.167 during 1997-2000 and 1.744 during 2004-2006, indicating that the average urban-rural difference observed directly from original statistical data may underestimate the degree of the essential inequity. Meanwhile, the increasing fairness gap and the decomposition results imply that generally leveling the urban-rural reimbursement ratios is probably not sufficient, and pro-disadvantage policies should be put in place in order to mitigate or even eliminate the inequality of opportunity in health care use between urban and rural residents. The results are also illuminating for the experiments and establishment of the urban-rural integrated medical insurance system (URIMIS) in China. The pro-disadvantage policies will be more appreciated and effective in the promotion of the equality of opportunity in health care, within the background of urban-rural dualistic social structure and widening urban-rural income gap. This suggestion is supported by data from the URIMIS pilot regions in Jiangsu province. The results show that the fairness gap can be narrowed significantly via pro-disadvantage policies.

• Item Type: MPRA Paper
• Language: English
• Keywords: equality of opportunity; health care; fairness gap; urban-rural integrated medical insurance system
• Subjects: D - Microeconomics > D1 - Household Behavior and Family Economics > D12 - Consumer Economics: Empirical Analysis; D - Microeconomics > D6 - Welfare Economics > D63 - Equity, Justice, Inequality, and Other Normative Criteria and Measurement; I - Health, Education, and Welfare > I1 - Health > I18 - Government Policy ; Regulation ; Public Health

References

Arneson, R. J. (1989). Equality and equal opportunity for welfare. Philosophical Studies, 56(1), 77–93.

Balia, S., & Jones, A. M. (2011). Catching the habit: A study of inequality of opportunity in smoking-related mortality. Journal of the Royal Statistical Society: Series A (Statistics in Society), 174(1), 175–194.

Bourguignon, F., Ferreira, F. H. G., & Marta, M. (2007). Inequality of opportunity in Brazil. Review of Income and Wealth, 53(4), 585–618.

Cohen, G. A. (1989). On the currency of egalitarian justice. Ethics, 99(4), 906–944.

Cook, B. L., McGuire, T. G., Lock, K., & Zaslavsky, A. M. (2010). Comparing methods of racial and ethnic disparities measurement across different settings of mental health care. Health Services Research, 45(3), 825–847.

Daniels, N. (1985). Just health care. Cambridge: Cambridge University Press.

Daniels, N. (1996). Justice, fair procedures, and the goals of medicine. The Hastings Center Report, 26(6), 10–12.

Deaton, A. (2003). Health, inequality, and economic development. Journal of Economic Literature, 41(1), 113–158.

Deb, P., & Trivedi, P. K. (2006). Specification and simulated likelihood estimation of a non-normal treatment-outcome model with selection: Application to health care utilization. The Econometrics Journal, 9(2), 307–331.

DeMurger, S., Fournier, M., & Chen, Y. (2007). The evolution of gender earnings gaps and discrimination in urban China, 1988–95. The Developing Economies, 45(1), 97–121.

Dworkin, R. (1981a). What is equality? Part 1: Equality of welfare. Philosophy & Public Affairs, 10(3), 185–246.

Dworkin, R. (1981b). What is equality? Part 2: Equality of resources. Philosophy & Public Affairs, 10(4), 283–345.

Ferreira, F. H. G., & Gignoux, J. (2011). The measurement of inequality of opportunity: Theory and an application to Latin America. Review of Income and Wealth, 57(4), 622–657.

Fleurbaey, M., & Schokkaert, E. (2009). Unfair inequalities in health and health care. Journal of Health Economics, 28(1), 73–90.

Fleurbaey, M., & Schokkaert, E. (2011). Equity in Health and Health Care, in: Pauly, M. V., McGuire, T. G., & Barros, P. P. (Eds.), Handbook of Health Economics, Vol. 2. Waltham, MA: North Holland.

Gates, R. (2007). A mata Geweke--Hajivassiliou--Keane multivariate normal simulator. Stata Journal, 6(2), 190–213.

Gu H., & Li, J. (2013). Study on the integrating urban-rural health security systems in the urbanization: Mode selection and effects estimation. Beijing: China Labor Social Security Publishing House (in Chinese).

Heckman, J. J., Ichimura, H., & Todd, P. E. (1998). Matching as an econometric evaluation estimator. The Review of Economic Studies, 65(2), 261–294.

Institute of Medicine. (2003). Unequal treatment: Confronting racial and ethnic disparities in health care. Washington, DC: National Academy Press.

Jones, A. M., Rice, N., & Rosa Dias, P. (2012). Quality of schooling and inequality of opportunity in health. Empirical Economics, 42(2), 369–394.

Jusot, F., Tubeuf, S., & Trannoy, A. (2010). Inequality of opportunities in health in Europe: Why so much difference across countries? Health, Econometrics and Data Group (HEDG) Working Papers 10/26.

Lei, X., & Lin, W. (2009). The new cooperative medical scheme in rural China: Does more coverage mean more service and better health? Health Economics, 18(2), 25–46.

McGuire, T. G., Alegria, M., Cook, B. L., Wells, K. B., & Zaslavsky, A. M. (2006). Implementing the institute of medicine definition of disparities: An application to mental health care. Health Services Research, 41(5), 1979–2005.

Mooney, G. (1986). Economics, medicine, and health care. Brighton: Wheatsheaf.

Oaxaca, R. (1973). Male-female wage differentials in urban labor markets. International Economic Review, 14(3), 693–709.

Rawls, J. (1971). A theory of justice. Cambridge: Belknap Press of Harvard University Press.

Roemer, J. E. (1993). A pragmatic theory of responsibility for the egalitarian planner. Philosophy & Public Affairs, 22(2), 146–166.

Roemer, J. E. (1998). Equality of opportunity. Cambridge: Cambridge University Press.

Roemer, J. E. (2002). Equality of opportunity: A progress teport. Social Choice and Welfare, 19(2), 455–471.

Roodman, D. (2011). Fitting fully observed recursive mixed-process models with cmp. The Stata Journal, 11(2), 159-206.

Rosa Dias, P. (2009). Inequality of opportunity in health: Evidence from a UK cohort study. Health Economics, 18(9), 1057–1074.

Rosa Dias, P. (2010). Modeling opportunity in health under partial observability of circumstances. Health Economics, 19(3), 252–264.

Rosenbaum, P. R., & Rubin, D. B. (1985). Constructing a control group using multivariate matched sampling methods that incorporate the propensity score. The American Statistician, 39(1), 33–38.

Schultz, T. W. (1961). Investment in human capital. The American Economic Review, 51(1), 1–17.

Sen, A. (1980). Equality of what? in: McMurrin, S. M. (Ed.), The Tanner Lectures on Human Values, Volume 1. Cambridge: Cambridge University Press.

Sen, A. (1999). Development as freedom. Oxford: Oxford University Press.

Sen, A. (2002). Why health equity? Health Economics, 11(8), 659–666.

Trannoy, A., Tubeuf, S., Jusot, F., & Devaux, M. (2010). Inequality of opportunities in health in France: A first pass. Health Economics, 19(8), 921–938.

Wagstaff, A., Lindelow, M., Gao, J., Xu, L., & Qian, J. (2009). Extending health insurance to the rural population: An impact evaluation of China's new cooperative medical scheme. Journal of Health Economics, 28(1), 1–19.

WorldBank. (2005). World development report 2006: equity and development. Washington, D. C.

Yip, W., & Hsiao, W. (2009). China's health care reform: A tentative assessment. China Economic Review, 20(4), 613–619.

Zhang, Y., & Eriksson, T. (2010). Inequality of opportunity and income inequality in nine Chinese provinces, 1989-2006. China Economic Review, 21(4), 607–616.