Inequality of opportunity in healthcare expenditures: evidence from China

BACKGROUND: The theory of equality of opportunity attributes total inequality to effort levels and circumstance factors. Inequality attributable to circumstance is defined as inequality of opportunity (IOp), namely inequity. Many studies have been pursued in this area but few concerning health care, especially in China. Despite Chinese health system reforms, healthcare inequity remains. This study explores the extent and sources of IOp in outpatient and inpatient expenditures in China. METHODS: We used three waves (2011, 2013 and 2015) of data from the China Health and Retirement Longitudinal Study that offer a nationally representative sample of Chinese residents aged 45 and older. Based on a pooled regression model, we estimated the contribution of circumstance factors to the inequality in outpatient and inpatient expenditures by defining a counterfactual distribution. The “circumstance-free effort” was introduced to deal with the correlation between circumstance and effort. RESULTS: We report a decline in inequity from 2011 to 2015, and the IOp ratio to total inequality in outpatient and inpatient expenditures decreased 9.4% (from 28.6 to 25.9%) and 3.3% (from 49.1 to 47.5%), respectively. Social background, medical supply-side factors, including the type of basic medical insurance, region and community medical resources were important sources of IOp in outpatient and inpatient expenditures. CONCLUSIONS: These findings provide information on which to base policies designed to reduce inequity in healthcare expenditures. It is necessary to transfer more subsidies to the New Co-operative Medical System, and to address the uneven regional distribution of medical resources. Additionally, increasing access to quality primary community clinics may be a pro-poor policy to alleviate inequity in the use of outpatient care. Compared to outpatient services, policies protecting vulnerable populations need to pay more attention to the financing and design of inpatient services.