This study sought to explore whether there are significant disparities in the financing of healthcare between urban and rural populations following the introduction in 2016 of the Urban and Rural Resident Basic Medical Insurance (URRBMI) scheme in China. We used household survey data from Heilongjiang province to estimate separate concentration curves in the financing burden and the resultant Kakwani indices (KIs) for urban and rural populations. This enabled the assessment of the progressivity (or otherwise) of this burden. The results show that in urban areas indirect taxes were proportional (KI = 0.0009, P = 0.8449), while indirect taxes in rural areas were progressive (KI = 0.0284, P = 0.0002). In both urban and rural areas, direct taxes were found to be progressive (urban: KI = 0.4628, P < 0.0001; rural: KI = 0.4087, P = 0.0064), while URRBMI was regressive (urban: KI = - 0.6236, P < 0.0001; rural: KI = - 0.4325, P < 0.0001). Out-of-pocket payments were proportional in urban areas (KI = - 0.0064, P = 0.7490); in contrast, they were regressive in rural areas (KI = - 0.1078, P = 0.0012). Overall, the burden of healthcare finance in urban China was found to be neither regressive nor progressive (KI = - 0.0142, P = 0. 1397), whereas in rural China it was found to be regressive (KI = - 0.1208, P < 0.0001). This result is driven by high reliance on regressive forms of funding, namely, fixed contributions to URRBMI, out-of-pocket costs and private health insurance. It is concluded that achieving equity in health financing in China will require strong measures to reduce the regressivity of financing, particularly for rural populations. This can be achieved through a shift towards means-adjusted URRBMI contributions, a greater reliance on tax-based financing and reducing the reliance on out-of-pocket payments and private health insurance.
Keywords: Equity; Kakwani index; Urban and Rural Resident Basic Medical Insurance; healthcare financing.
© The Author(s) 2021. Published by Oxford University Press in association with The London School of Hygiene and Tropical Medicine. All rights reserved. For permissions, please e-mail: journals.permissions@oup.com.