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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.

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Abstract

This paper investigates the urban-rural inequality of opportunity in health care in China based on Roemer’s (1998) theory of equality of opportunity (EOp). Following the compensation principle proposed by Fleurbaey and Schokkaert (2011), this paper establishes a decomposition strategy of the fairness gap which we use to measure the urban-rural inequality of opportunity in health care in China. Empirical analysis using the CHNS data shows that the ratios of the urban-rural fairness gap to the urban-rural average difference in the use of health care are 1.167 during 1997-2000 and 1.744 during 2004-2006, which indicates that the urban-rural average 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 between urban and rural residents. This implication is also illuminating for the experiments and the establishment of the urban-rural integrated medical insurance system (URIMIS) in China. Under the background of the dual social structure and the evident income gap between the urban and the rural, the pro-disadvantage policies will be more appreciated and effective in the promotion of the equality of opportunity in health care. And such positive role of the pro-disadvantage policies is supported by data from URIMIS pilot districts in Jiangsu province.

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