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The impact of health insurance on healthcare service use and costs: evidence from rural China

Yiqiu Wang (Nanjing Agricultural University, Nanjing, China)
Maria Porter (Department of Political Economy and Moral Science, University of Arizona, Tucson, Arizona, USA)
Songqing Jin (Agricultural, Food and Resource Economics, Michigan State University, East Lansing, Michigan, USA)

China Agricultural Economic Review

ISSN: 1756-137X

Article publication date: 5 November 2020

Issue publication date: 1 June 2021




The purpose of this paper is to study the effects of introducing a health insurance program in rural China between 2004 and 2006, the New Cooperative Medical Scheme (NCMS).


The authors apply difference in difference and propensity score matching methods (PSM-DID) to a widely used panel dataset, the China Health and Nutrition Survey (CHNS). Findings are robust across several treatment and comparison groups used in previous NCMS studies.


Households who participated in NCMS increased the use of preventive services and western medicine, while lowering the use of traditional Chinese medicine. NCMS also reduced hospital use, out of pocket payments, travel time to healthcare facilities and waiting time to see doctors. The authors estimate that reductions in travel and waiting time saved roughly 52m U.S. dollars in 2006.

Research limitations/implications

Previously divergent findings on health insurance effects may be due to researchers studying health insurance across different healthcare delivery systems. In addition, in estimating how health insurance access affects healthcare costs, the authors should consider economic costs related to the time needed to access health services.


The authors study how health insurance access affects patients' choice of providers and economic costs to accessing health care services, outcomes that have not received much attention previously. The authors depart from previous NCMS studies by comparing several different approaches to identifying treatment and control groups when applying PSM-DID.



The authors are grateful to Chris Ahlin, Leah Lakdawala and Eduardo Nakasone for helpful comments and suggestions. All errors are authors.Funding: Wang acknowledges funding support from the National Natural Science Foundation of China (No. 71373126). Jin is grateful for support from Michigan State University’s AgBio Research.


Wang, Y., Porter, M. and Jin, S. (2021), "The impact of health insurance on healthcare service use and costs: evidence from rural China", China Agricultural Economic Review, Vol. 13 No. 2, pp. 418-435.



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