Role of the new rural cooperative medical system in alleviating catastrophic medical payments for hypertension, stroke and coronary heart disease in poor rural areas of China

Hypertension is a highly prevalent disease associated with increased risk of cardiovascular diseases and high mortality rates worldwide. For this reason, it is one of the major public health concerns not only in the West but also in the Asia Pacific region [1]. Occurrence of hypertension among Chinese adults is on the rise due to economic development and concomitant changes in lifestyle, particularly in their diet. Between 2000 and 2001, 27.2% of Chinese adults aged 35 to 74 years, or about 129,824,000 individuals, had hypertension [2]. In 2002, 18% of adults aged 18 years and above, or about 153 million of the Chinese population, reportedly had hypertension [3]. Hypertension is also a major risk factor for stroke, coronary heart disease (CHD), heart failure, myocardial infarction and other serious cardiovascular and chronic kidney diseases. In a prospective cohort study involving 169,871 Chinese men and women aged 40 years and above, Gu et al. found a strong, linear and independent relationship between blood pressure levels and the risk of cardiovascular diseases in Chinese adults [4].

Providing clinical care for hypertension and its complications imposes great economic burden on patients as well as the country. According to the Chinese Third National Health Services Survey conducted in 2003, direct medical spending on outpatient services averaged RMB72.4/$11.6, RMB215.4/$34.5, and RMB177.3/$28.4 for each visit associated with hypertension, stroke, and CHD, respectively, in rural areas. Furthermore, direct medical spending on inpatient services averaged RMB1329.6/$212.9, RMB2799.1/$448.1, and RMB2108.4/$337.6 for each visit associated with hypertension, stroke, and CHD, respectively, in rural areas [5]. Lloyd-Jones et al. estimated the cost of hypertension in the US at $73.4 billion in 2009 [6]. According to Zhai et al., the direct medical costs of Chinese patients aged 35 to 74 years with hypertension, CHD and stroke in 2003 were RMB20.2/$3.23, RMB15.7/$2.51, and RMB24.3/3.89 billion, respectively. Similarly, medical cost attributed to hypertension was estimated at RMB19.1 billion/$3.06 billion, which accounts for 47.7% of the total medical cost of treatment of stroke and CHD [7].

Health spending is considered to be catastrophic when a household must reduce its basic expenditure over a period of time to cope with health costs, but there is no consensus on the threshold [8]. Therefore, catastrophic medical payment (CMP) reflects a household’s payment capacity. If a family’s out-of-pocket (OOP) health expenditure exceeds its total disposable income for a certain period by 30% or more, then the family is considered to be facing CMP. According to a report by Xu et al., in which a threshold of 40% was used, the incidence of CMP varies across countries; it is low in developed countries (e.g., 0.57% in Switzerland and 0.55% in the US) and high in countries experiencing economic transitions (e.g., 7.50% in Azerbaijan and 10.45% in Vietnam) [9]. Himmelstein found that CMP incidence is below 1% in some countries, but as high as 13% in other countries [10]. Notably, even wealthy families may be subjected to CMP [10].

Out-of-pocket payments are the principal means of financing healthcare in China, which has led to high incidence of CMP [11]. According to Li et al., rural households have greater risk of incurring CMP than urban households [12]. Likewise, CMP is observed more frequently in households located in poor areas than in those located in wealthy regions [12]. Hence, in rural China, particularly in the poorest regions with annual income of no more than RMB1500/$240.2 per capita, medical expenditure is an important cause of transient poverty [13]. Members of poor families usually suffer from chronic diseases such as hypertension and CHD that constitute the main reason for sickness poverty. According to the Third National Health Services survey conducted in China in 2003, the prevalence of common chronic diseases in rural areas was 12.6% [5]. Similarly, according to a study conducted by Ma et al. in southwest China, approximately 38.8% of poor rural families were victimized by chronic illnesses, with significantly higher proportion of impoverished families affected compared to non-impoverished families [14]. Ying et al. found that the mean self-paid (i.e. OOP) medical cost of poor families is RMB1414/$ 226.4 per month, which accounts for 70% of their average monthly expenditure [15]. In the case of a major illness, poor families may give up treatment or cut down their budget for other living necessities (e.g., food, clothing, housing and children’s education) and/or borrow money to afford medical costs, thereby increasing the severity of their poverty [16].

The three key prerequisites for CMP are poor access to health services, expensive medical costs and lack of health insurance [9]. Ramses and Karine Lamiraud pointed out that expanding the coverage of the medical insurance system could reduce the incidence of CMP [17]. To prevent the phenomenon of ‘poverty due to illness’ in rural China, the New Rural Cooperative Medical System (NRCMS) was introduced to rural health sectors in 2003. NRCMS is financed by combined contributions from central and local government bodies and from individual households [18]. NRCMS operates at the county level. Counties determine the deductible, ceiling, reimbursement ratio, medical saving account (MSA). The ministry of health of central and local government agencies is the policy maker and mainstay of NRCMS. Central and local governments initially contributed RMB40/$6.4 for each enrollee annually since 2003, whereas participants only contributed RMB10/$1.6. This criterion doubled both for central and local governments and individual participants in 2008. In practice, NRCMS reimburses approximately 30% of inpatient expenditures [19, 20]. There are essentially four types of benefit and reimbursement models under NRCMS. The most common model (especially in the western and central regions) is implemented in 47% of Chinese counties. This model involves formula-based reimbursement of inpatient services and the use of MSA for reimbursements of outpatient services and preventive care. Household are expected to make contribution to MSAs, and household members can use the MSA for outpatient services. A second model is similar (applied in some 41% of Chinese counties). It uses the same inpatient reimbursement policy, but there is no MSA. Use of these two models has changed rapidly, reflecting the policy to phase out MSAs gradually over time. In 2007, for example, nearly two-thirds of counties used the first model and 7% used the second. Outpatient services and preventive care can be reimbursed from pooled funds, and is subject to a formula but usually involves no deductible. The third model (applied in about 8% of Chinese counties) reimburses both inpatient and outpatient services for catastrophic diseases, with separate deductibles and reimbursement caps. The fourth model used in 4% of Chinese counties reimburses both inpatient and outpatient services from pooled funds. All four models emphasize reimbursement for inpatient services, which are subject to deductibles and caps. Inpatient deductibles were RMB100 (range 0–200)/$16.0 (range 0–32.0), RMB250 (range 0–500)/$40.0 (range 0–80.0), and RMB800 (range 0–2000)/$128.1 (range 0–320.0) at township, county, and provincial hospitals, respectively. The average reimbursement ceiling was RMB30,000 (range 8,000-180,000)/$4803.0 (range 1280.8-28818) for inpatient care [19].

By the end of September 2008, more than 95% of counties in China were covered by the program [21]. The NRCMS has become one of three major medical insurances in the country, with rural residents covered by the NRCMS, urban employees under the Urban Employees Basic Medical Insurance and unemployed urban residents under the Urban Residents Basic Medical Insurance. The main goal of the NRCMS is to improve access of rural residents to health services and, above all, to help them reduce the risks that accompany catastrophic illnesses, thereby protecting them from impoverishment caused by CMP [22, 23].

The present study examines the incidence and severity of catastrophic medical payments due to hypertension, stroke and CHD, and identifies the role of the NRCMS in alleviating CMP-induced poverty in four poor rural counties in central and western China.

Face-to-face interviews were conducted on patients with hypertension and/or stroke and CHD in the Hong Kong Kadoorie Project. Self-administrated questionnaires were used to collect data on medical payments, including out-of-pocket (OOP) and NRCMS-reimbursed expenses. The pre- and post-reimbursement (via the NRCMS) prevalence of household poverty, catastrophic medical payment (CMP) incidence (H _cat ), mean CMP gap (G _cat ), mean positive CMP gap (MPG _cat ) and other determinants of CMP incidence were calculated.

The research protocol was approved by the Ethics Committee of Tongji Medical College, Huazhong University of Science and Technology (IRB No: FWA000007304). Informed consents were obtained from all participants prior to collection of the data.

Rural households in central and western China, particularly those below the poverty line, are always susceptible to disease-induced poverty [13]. Even a fairly small medical cost can be catastrophic for them. According to our findings, poor families (i.e. those with an average income of less than RMB1300/$208.1 per capita in 2008) had smaller medical expenditures related to hypertension, stroke and CHD in 2008 than non-poor families (i.e. those with an average income of RMB1300/$208.1 or above per capita in 2008). In addition, the proportion of health costs to total household health expenditure for hypertension, stroke and CHD was significantly higher in the former than in the latter. Of the three diseases we focused on, we found stroke to incur the largest medical expenditures, which is consistent with a previous report by Zhai et al. [7].

Over 40% (44.4%) of the families were found to have suffered from catastrophic medical payments, with a G _cat of 66.4% and an MPG _cat of 149.6%. The poor families included in the study had significantly higher CMP incidence, G _cat and MPG _cat than non-poor families. According to our investigation, some of the families enduring CMP needed to sell personal items to pay for their health expenditures (data not shown). Hypertension, stroke and CHD were also discovered to be important causes of CMP. CMP incidence resulting from these diseases was 17.0%, which was lowered to 13.5% via NRCMS reimbursement. Moreover, G _cat and MPG _cat were 16.6% and 97.6%, respectively, and dropped to 11.8% and 87.4%, respectively, after NRCMS reimbursement. In addition, the NRCMS managed to curtail the poverty impact of OOP payments due to hypertension, stroke and CHD to 1.2% (from 6.9% pre-reimbursement to 5.7% post-reimbursement). Thus, our findings showed that NRCMS reimbursements led to small decreases in the incidence and severity of catastrophic medical payments for hypertension, stroke and CHD, which suggests that the NRCMS plays a limited role in alleviating CMP-induced poverty among poor rural families [26].

The NRCMS policy focuses mainly on decreasing OOP payments for inpatient services to provide rural residents, particularly the disadvantaged ones, with easy access to health services and to reduce household risk of catastrophic medical payments resulting from major diseases. Thus, inpatient service utilisations increased under the NRCMS, whereas outpatient service utilisations did not [27, 28]. According to our investigation (data not shown), the OOP costs of outpatient service constituted a larger part (mean of 85.8%) of the total medical costs of hypertension, stroke, and CHD, compared with that of inpatient service (mean of 14.2%). Moreover, the NRCMS reimbursement rate to outpatient service averaged 7.3% (median 0.0%, and range 0–100.0%) and 54.6% (median 60.0%, and range 0–100.0%) for the 1005 patients receiving outpatient services and the 207 patients receiving inpatient services, respectively, for hypertension, stroke, and CHD in the past one year (i.e. 2008). Additionally, approximately 73.9% of the participants reported medical costs almost equal to or beyond their acceptable level in our research (data not shown). Thus, our findings suggest that the NRCMS did not sufficiently relieve poverty caused mainly by the purchase of anti-hypertension drugs, which is highly prevalent in outpatient services. Moreover, the goal of the NRCMS to provide insurance for rural residents against catastrophic illnesses has not been achieved [29]. The present proportion of OOP medical payments is fairly high for rural households in China [30]. Since most health payments in China comprise high percentages of OOP payments, China is more susceptible to CMP than other countries. CMP is highly unlikely to occur in families with OOP health payments lower than 15% [31].

Poverty among rural families also merits close attention. CMP is not caused simply by expensive medical procedures or interventions. Even a relatively small payment may mean a financial catastrophe to poor households, forcing them to cut down their budget for basic expenses such as food, shelter or children’s education [32]. Local poverty may lead to decrease in the number of people who seek medical care when they are sick and may subsequently affect accessibility of health services [16]. Many studies have shown that CMP is very likely to occur in households with poor economic conditions [9, 33–35]. The results of our logistic regression analysis show that household economic conditions are associated with CMP incidence, i.e. poor families are more likely to be subjected to CMP compared with non-poor families. Prevention of CMP can therefore lead to increase in the income of rural households, particularly of poor ones. Poor households can be protected from CMP by reducing the reliance of the health system on OOP costs, providing them with additional financial security, such as medical finance assistance, and increasing the reimbursement rate of the NRCMS.

Stroke and CHD are common complications of hypertension. Unlike patients suffering from hypertension only, patients with stroke or CHD are very susceptible to CMP. Therefore, prevention of hypertension complications is also necessary to decrease CMP incidence. Lowering the price of anti-hypertension drugs may make the drugs accessible to patients and in turn decrease their risk for hypertension-related complications. Medical insurance was not found to be associated with CMP, indicating that NRCMS reimbursements do not efficiently decrease the impacts of OOP costs of hypertension, stroke and CHD on patients. Furthermore, the low reimbursement rate of outpatient services may also be a point of concern.

Given the possibility of catastrophic effects of medical payments for hypertension, stroke and CHD on the financial conditions of patients, a better mechanism for implementation of NRCMS is needed to improve the reimbursement procedures for inpatient services and drug purchase, and to lower the burden of OOP costs on patients. Prevention and control of hypertension and its complications is a major public health issue. To some extent, the present NRCMS and Medical Assistance Policy have benefited hypertension patients and reduced the risk of consequential poverty among rural families in China. However, the benefits for poor households with patients suffering from chronic diseases (e.g., hypertension and its complications) seem very small. To achieve its goal of decreasing impoverishment caused by treatment costs for hypertension and its complications, the NRCMS should consider providing additional or even full payment. In some areas across China, a mode of secondary reimbursement of medical costs has been extended to poor patients suffering from hypertension or its complications. However, this is just a temporary solution and more needs to be done to achieve the goal of drastically reducing CMP incidence.

A major limitation of our study is the conservative extensionality of the conclusions we reached. As mentioned above, our study was conducted on subjects who are part of the project ‘Community Health Promotion in Poor Rural Areas of China’. Subjects suffering from hypertension or its complications are systematically managed in the project, so they do not constitute a representative sample. In this light, our findings should be interpreted cautiously. The skewed gender distribution (37.40% males versus 62.60% females) of the subjects in our study is also notable because most male adults leave their poor rural hometowns for high-paying jobs in cities, whereas most women stay at home looking after their children and elders. This phenomenon is common in most poor rural areas of central and western China.

Out-of-pocket payments for treatment of hypertension, stroke and CHD impose a heavy burden on households in fourth-class rural areas of China. The NRCMS policy is somewhat effective at preventing disease-induced poverty among poor rural households in China, but needs to be revised by improving the reimbursement rate in order to produce better outcomes.