Value-Based Health Care: Long-Term Care Insurance for Out-of-Pocket Medical Expenses and Self-Rated Health

Long-term care insurance (LTCI) is a significant approach in the effort to actively manage aging and the currently unmet need for aged care in China. Based on data from the 2011, 2013, 2015, and 2018 phases of the China Health and Retirement Longitudinal Study, we used the propensity score matching-difference in difference (PSM-DID) approach to explore the impact of LTCI on out-of-pocket medical expenses and self-rated health. Results showed that LTCI can significantly reduce out-of-pocket medical expenses by 37.16% (p < 0.01) per year and improve self-rated health by 5.73% (p < 0.01), which conforms to the spirit of “value-based health care”. The results were found to be stable in the robustness tests conducted. Currently, China is at the intersection of “low-value-based health care” and “value-based health care”. Improving the health level of aged individuals while keeping medical costs under reasonable control is crucial for formulating and implementing a new round of healthcare reform in China.