Providing comprehensive health insurance coverage in rural China: a critical appraisal of the New Cooperative Medical Scheme and ways forward

Health insurance reform for rural China is at a crossroads. The achievements of recent reform initiatives appear remarkable as measured by coverage through the New Cooperative Medical Scheme (NCMS). Yet there is little evidence that NCMS has made major strides toward reducing the financial risks of health care for the rural population. We argue that to improve the overall performance of the NCMS, more attention should be directed to improve insurance benefit package, strengthen the roles of government agencies as purchasers and third-party payers, reforming provider payment methods, as well as to establish a fiscal redistribution mechanism to reduce inequities in health financing arising from different regions of the country. Our critical assessment also points to the danger that this system may be trapped in a vicious cycle of increases in government subsidies and resulting cost escalations in health care due to strategic responses among health care providers, a factor that hitherto has been largely overlooked.