Medicines in Universal Health Care Coverage: Case Study of China’s Rural Cooperative Medical Scheme (NCMS)

In China, three major health insurance programs cover specific groups: rural residents under the New Rural Cooperative Medical Scheme (NCMS), urban employees under the Urban Employees Basic Medical Insurance (UE-BMI) and unemployed urban residents under the Urban Residents Basic Medical Insurance (UR-BMI). The three schemes function differently in how they are financed and operate, and they can be quite different with regard to reimbursement structures and coverage.

A report chapter in the Alliance for Health Policy and Systems Research Flagship Report 2014, Warren A. Kaplan, Wen Chen and Veronika Wirtz focus on the case study of the NCMS and coverage for the rural poor. The authors examine various elements of coverage and medicines access under the NCMS and discuss reforms that have been implemented.

Overall, the authors find that the NCMS has achieved relatively high enrollment, provided some financial risk protection for individuals in rural China and has partly reduced oversupply of specialty services and prescription drugs. NCMS has had a mixed to positive impact on health care utilization but a limited impact on health care expenditure. The authors also analyze the implementation of the “zero mark-up” policy. The policy was established in 2009 as part of an initiative to improve population access to, and reduce the cost of essential medicines. The authors find that several evaluations of the policy suggest that it helped contain the rising trend in costs of medicines, but that there are implications for hospitals with respect to potential loss of revenue.