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The cost-effectiveness analysis of the New Rural Cooperative Medical Scheme in China

Wu, Jinjing; Deaton, Shelby; Jiao, Boshen; Rosen, Zohn; Muennig, Peter A.

The New Rural Cooperative Medical Scheme (NCMS) is a universal healthcare coverage plan now covering over 98% of rural residents in China, first implemented in 2003. Rising costs in the face of modest gains in health and financial protections have raised questions about the cost-effectiveness of the NCMS.

Using the most recent estimates of the NCMS’s health and economic consequences from a comprehensive review of the literature, we conducted a cost-effectiveness analysis using a Markov model for a hypothetical cohort between ages 20 and 100. We then did one-way sensitivity analyses and a probabilistic sensitivity analysis using Monte Carlo simulations to explore whether the incremental cost-effectiveness ratio (ICER) falls below 37,059 international dollars [Int$], the willingness-to-pay (WTP) threshold of three times per capita GDP of China in 2013.

The ICER of the NCMS over the lifetime of an average 20-year-old rural resident in China was about Int$71,480 per quality-adjusted life year (QALY) gained (95% confidence interval: cost-saving, Int$845,659/QALY). There was less than a 33% chance that the system was cost-saving or met the WTP threshold. However, the NCMS did fall under the threshold when changes in the program costs, the risk of mortality and hypertension, and the likelihood of labor force participation were tested in one-way sensitivity analyses.

The NCMS appears to be economically inefficient in its current form. Further cost-effectiveness analyses are warranted in designing insurance benefit packages to ensure that the NCMS fund goes toward health care that has a good value in improving survival and quality of life.

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Academic Units
Mailman School of Public Health
Health Policy and Management
Published Here
February 5, 2019