The Effect of Urban Basic Medical Insurance on Health Service Utilisation in Shaanxi Province, China: A Comparison of Two Schemes

Background: Urban population in China is mainly covered by two medical insurance schemes: The Urban Employee Basic Medical Insurance (UEBMI) for urban employees in formal sector and the Urban Resident Basic Medical Insurance (URBMI) for the left urban residents, mainly the unemployed, the elderly and children. This paper studies the effects of UEBMI and URBMI on health services utilisation in Shaanxi Province, Western China. Methods: Cross-sectional data from the 4th National Health Services Survey - Shaanxi Province was studied. The propensity score matching and the coarsened exact matching methods have been used to estimate the average medical insurance effect on the insured. Results: Compared to the uninsured, robust results suggest that UEBMI had significantly increased the outpatient health services utilisation in the last two weeks (p,0.10), whilst the significant effect on hospitalisation was evident in the CEM method (p,0.10). The effect of URBMI was limited in that although being insured was associated with higher health services utilisation, compared with the uninsured, none of the improvement was statistically significant (p.0.10). It was also found that compared with the uninsured, basic medical insurance enrollees were more likely to purchase inpatient treatments in lower levels of hospitals, consistent with the incentive of the benefit package design. Conclusion: Basic Medical insurance schemes have shown a positive but limited effect on increasing health services utilisation in Shaanxi Province. The benefit package design of higher reimbursement rates for lower level hospitals has induced the insured to use medical services in lower level hospitals for inpatient services.