Income-Related Inequality in Health Care Utilization and Out-of-Pocket Payments in China: Evidence from a Longitudinal Household Survey from 2000 to 2015

In recent decades, China has experienced rapid economic growth and rising health inequality. The government has introduced a nationwide health care reform aimed at achieving affordable and equitable basic health care for all. This paper investigates income-related inequality in health care utilization and out-of-pocket (OOP) payments and explores the underlying factors that drive the inequalities. Using data running from 2000 to 2015 and covering nine of thirty-one provinces in China, we calculate indices to measure income-related inequality and adopt a regression-based decomposition approach to explore the sources of inequality. We find pro-rich inequality in the use of preventive care and pro-poor inequality in the use of folk doctors. In addition, the better-off have preferential access to higher level hospitals, while the use of primary care facilities is more concentrated among the poor. The poor are also found to face a heavier financial burden since they tend to spend a larger share of their income on OOP payments. Education, employment and geographic regions all appear to contribute to the total inequality. Our results indicate that affordability remains a common barrier for the poor to access health care, and that the inequality is largely driven by socio-economic factors.