1 Akin, John S., Dow, William H. and Lance, Peter M., “Did the distribution of health insurance in China continue to grow less equitable in the nineties? Results from a longitudinal survey,” Social Science and Medicine, Vol. 58, No. 2 (2004), pp. 298–304CrossRefGoogle ScholarPubMed.

2 William C. Hsiao, “Plenary session,” Chinese Economists Society Annual Conference, Chongqing, 24 June 2005.

3 For example, see Smith, James P., “Healthy bodies and thick wallets: the dual relation between health and economics status,” Journal of Economic Perspectives, Vol. 13, No. 2 (1999), pp. 145–66CrossRefGoogle ScholarPubMed; Gertler, Paul and Gruber, Jonathan, “Insuring consumption against illness,” American Economic Review, Vol. 92, No. 1 (2002), pp. 51–76CrossRefGoogle ScholarPubMed; Dercon, Stefan and Hoddinott, John, “Health, shocks and poverty persistence,” in Dercon, Stefan (ed.), Insurance against Poverty (Oxford: Oxford University Press, 2004), pp. 124–36CrossRefGoogle Scholar.

4 See Adam Wagstaff and Magnus Lindelow, “Health shocks in China: are the poor and uninsured less protected?” World Bank, Policy Research Working Paper 3740 (2005).

5 Gustafsson, Bjorn and Shi, Li, “Expenditures on education and health care and poverty in Rural China,” China Economic Review, Vol. 15, No. 3 (2003), pp. 292–301CrossRefGoogle Scholar.

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8 Figures in this paragraph are from Chunlei Nie, “Institutional construction and development of the new cooperative medical system.” International Symposium on Health Care in Rural China: Progress and Prognosis, Beijing, 25 July 2007.

9 Wang, Hongman, Gu, Danan and Dupre, Matthew E., “Factors associated with enrollment, satisfaction, and sustainability of the new cooperative medical scheme program in six study areas in rural Beijing,” Health Policy, Vol. 85, No. 1 (2008), pp. 32–44CrossRefGoogle ScholarPubMed.

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11 On the continued promotion of RCMS, see Hsiao, William C., “Transformation of health care in China,” New England Journal of Medicine, Vol. 141 (1984), pp. 932–36CrossRefGoogle Scholar. On the declining coverage rate, see Zhou, Shahai, “The comparison of the cooperative medical system and health insurance,” Chinese Rural Health Administration, Vol. 12 (1984), pp. 54–57Google Scholar and Liu, Yuanli, “Development of the rural health insurance system in China,” Health Policy and Planning, Vol. 19, No. 3 (2004), pp. 159–65CrossRefGoogle Scholar.

12 Liu and Cao, “China's cooperative medical system.”

13 Carrin, Guy et al. , “The reform of the rural cooperative medical system in the People's Republic of China: interim experience in 14 pilot counties,” Social Science and Medicine, Vol. 48, No. 7 (1999), pp. 961–72CrossRefGoogle ScholarPubMed.

14 State Council, “To speed up the reform and development of rural cooperative medical system.” Beijing, March 1994.

15 On the modest success of some CMS style programmes, see Chen, X., Hu, T.W. and Lin, Z., “The rise and decline of the cooperative medical system in rural China,” International Journal of Health Services, Vol. 23, No. 4 (1993), pp. 731–42CrossRefGoogle ScholarPubMed. Statistics for 2003 are from Hsiao, “Plenary session.”

16 For a detailed account of the State Council's deliberation process in choosing this specific design, see Liu, Yuanli and Rao, Keqin, “Providing health insurance in rural China: from research to policy,” Journal of Health Politics, Policy and Law, Vol. 31, No. 1 (2006), pp. 71–92CrossRefGoogle ScholarPubMed.

17 Wagstaff and Lindelow, “Health shocks in China,” and Wagstaff, Adam, “The economic consequences of health shocks: evidence from Vietnam,” Journal of Health Economics, Vol. 26, No. 1 (2007), pp. 82–100CrossRefGoogle ScholarPubMed.

18 Nie, “Institutional construction and development of the NCMS.”

19 Prior to 2006, the matches provided by the central and local governments were generally 10 yuan per participant.

20 Nie, “Institutional construction and development of the NCMS.”

21 State Council, “Decision of further strengthening rural health,” Beijing, October 2002.

22 In fact, one survey respondent compared the NCMS programme fee to a tax: his household felt compelled to join even though household members reported being unlikely ever to use the insurance.

23 Yuanyuan Yan et al., “Insuring rural China's health? An empirical analysis of China's new collective medical system.” Freeman-Spogli Institute for International Studies working paper, Stanford University, 2006.

24 Hesketh, Therese et al. , “Health status and access to health care of migrant workers in China,” Public Health Reports, Vol. 123, No. 2 (2008), pp. 189–98CrossRefGoogle Scholar.

25 State Council, “Further strengthening rural health.”

26 Adam Wagstaff et al., “Extending health insurance to the rural population: an impact evaluation of China's new cooperative medical scheme,” World Bank, Policy Research Working Paper 4150 (2007).

27 World Health Organization, “Implementing the new cooperative medical schemes in rapidly changing China: issues and options,” Office of the World Health Organization Representative in China, 2007.

28 Hsiao, “Plenary session.”

29 For evidence on variation in reimbursement rates from a nationally representative survey, see Wagstaff et al., “Extending health insurance.” While financial considerations drive most of these decisions, the experience and training of county-level administrators varies widely, suggesting that some programmes are likely to be better designed and more sustainable than others. For example, 19% of the top health care administrators in counties covered by our survey had at least 25 years of experience in health care management, whereas 15% had three or fewer years of experience. Similarly, almost a quarter of these administrators had not attended university. Indeed, in one county visited during survey pre-testing, responsibility for determining the reimbursement schedule was subcontracted to a junior high school maths teacher.

30 Outpatient medical treatment is more often eligible for reimbursement in western and central provinces, typically at the cost of offering lower reimbursement rates for inpatient care. For evidence supporting these statements, see Wagstaff et al., “Extending health insurance,” and Wang, Gu and Dupre, “Factors associated with enrollment, satisfaction, and sustainability.”

31 Li, Bingqin, “Floating population or urban citizens? Status, social provision and circumstances of rural-urban migrants in China,” Social Policy & Administration, Vol. 40, No. 2 (2006), pp. 174–95CrossRefGoogle Scholar.

32 Yan et al., “Insuring rural China's health?”

33 For nationally representative data consistent with this assertion, see Wagstaff et al., “Extending health insurance.”

34 By contrast, Wagstaff et al. find that out-of-pocket expenditures for NCMS participants did not fall for poor participants of the NCMS programme. Given that the NCMS has resulted in increased health care utilization, one possible explanation is that doctors prescribe more expensive medical procedures to NCMS participants.

35 All figures in this paragraph are from Nie, “Institutional construction and development of the NCMS.”

36 The household level data collection was undertaken by provincial offices of the National Bureau of Statistics in close collaboration with the Institute for Population and Labour Economics (IPLE) at the Chinese Academy of Social Science and Nanjing Agricultural University. The county-level survey was completed directly by researchers at IPLE.

37 Statistics presented in this paragraph are from the China National Bureau of Statistics, China National Statistics Yearbook.

38 These figures are consistent with those in Yan et al., “Insuring rural China's health?”

39 Statistics in this paragraph are derived from the county-level survey.

40 Economic development projects have recently displaced rural residents in all three of these counties in Jiangsu, suggesting perhaps that some urban participants may be provided an opportunity to enrol even though they are no longer officially rural residents.

41 Low eligibility for labour migrants is consistent with the findings of Yan et al., “Insuring rural China's health?”

42 Wang, Gu and Dupre, “Factors associated with enrollment, satisfaction, and sustainability.”

43 Wagstaff et al., “Extending health insurance.”

44 A programme administrator in one county confided that reimbursement procedures were intentionally designed to be cumbersome so the limited budget could be stretched further.

45 Wang, Holly H. and Rosenman, Robert, “Perceived need and actual demand for health insurance among rural Chinese residents,” China Economic Review, Vol. 18, No. 4 (2007), pp. 373–88CrossRefGoogle Scholar.

46 Clustering of standard errors takes place at the county level.

47 For evidence on the relative youth and education status of local rural residents with off-farm employment, see Brauw, Alan de et al. , “The evolution of China's labor markets during the reforms,” Journal of Comparative Economics, Vol. 30, No. 2 (2002), pp. 329–53CrossRefGoogle Scholar.

48 Because outpatients are covered in all ten sampled counties in Jiangsu, this characteristic is not interacted with the province dummy in Table 7.

49 Wang, Gu and Dupre, “Factors associated with enrollment, satisfaction, and sustainability.”

50 On bureaucratic red tape, see World Bank, “China: improving rural finance for the harmonious society,” Report No. 41579-CN, Sustainable Development Department, East Asia and Pacific Region (2007). In fieldwork associated with the authors' survey, an official in one county explained that participants waited as long as six months for reimbursement in 2004 because the central government's contribution to the risk pool was often delayed.

51 China National Bureau of Statistics, China Health Statistics Yearbook (Beijing: China Statistical Press, 2006)Google Scholar.

52 For evidence, see Liu, “Development of the rural health insurance system,” and Hsiao, “Plenary session.”

53 World Health Organization, Implementing the New Cooperative Medical System in Rapidly Changing China: Issues and Options (Beijing: Office of the World Health Organization in China, 2004)Google Scholar.

54 Hu, Suyun, He, Weina and Wen, Teng, “Public health and health insurance for the floating population: a case study of Shanghai,” The Yale-China Health Journal, Vol. 5 (2008), pp. 47–63Google Scholar.

55 Ministry of Health, People's Republic of China, An Analysis Report of National Health Services Survey in 2003 (Beijing: Peking Union Medical College Press, 2004)Google Scholar.