Did expansion of health insurance coverage reduce horizontal inequity in healthcare finance? A decomposition analysis for China

Objectives: 'Horizontal inequity' in healthcare finance occurs when people with equal income contribute unequally to healthcare payments. Prior research is lacking on horizontal inequity in China. Accordingly, this study set out to examine horizontal inequity in the Chinese healthcare financing system in 2002 and 2007 through two rounds of national household health surveys.

Design: Two rounds of cross-sectional study.

Setting: Heilongjiang Province, China.

Participants: Adopting a multistage stratified random sampling, 3841 households with 11 572 individuals in 2003 and 5530 households with 15 817 individuals in 2008 were selected.

Methods: The decomposition method of Aronson et al was used in the present study to measure the redistributive effects and horizontal inequity in healthcare finance.

Findings: Over the period 2002-2007, the absolute value of horizontal inequity in total healthcare payments decreased from 93.85 percentage points to 35.50 percentage points in urban areas, and from 113.19 percentage points to 37.12 percentage points in rural areas. For public health insurance, it increased from 17.84 percentage points to 28.02 percentage points in urban areas, and decreased from 127.93 percentage points to 0.36 percentage points in rural areas. Horizontal inequity in out-of-pocket payments decreased from 79.92 percentage points to 24.83 percentage points in urban areas, and from 127.71 percentage points to 53.10 percentage points in rural areas.

Conclusions: Our results show that horizontal inequity in total healthcare financing decreased over the period 2002-2007 in China. In addition, out-of-pocket payments contributed most to the extent of horizontal inequity, which were reduced both in urban and rural areas over the period 2002-2007.