How can outpatient pooling reform alleviate health inequalities: evidence from China’s basic medical insurance

While some studies find that the outpatient pooling reform (OPR) of Chinese basic medical insurance can improve the service utilization of participants and alleviate health inequalities within the system, no research has focused on its effect on the inequality among different systems. Using data from the China Health and Retirement Longitudinal Study, this study measured the inequalities existing in healthcare service utilization and health outcomes between two groups of participants in the Urban Employee Basic Medical Insurance (UEBMI) and Urban and Rural Resident Basic Medical Insurance (URRBMI), and estimated how the OPR can alleviate the inequalities using the Staggered Difference-in-Difference method. The results show that the OPR had a significant alleviating effect on the narrowed fairness gaps faced by resident participants from 2011 to 2020, with the effect varying with the reform sequences in the two insurances. The reforms implemented simultaneously in the two insurances narrowed the disadvantage of residents in health outcomes, but widened the gap in their service utilization. In regions where the reform was first implemented in UEBMI, the later reform in URRBMI narrowed the gap in service utilization but widened the gap in health outcomes. In areas where the reform was first implemented in URRBMI, the gaps faced by residents did not change significantly after the implementation of OPR in UEBMI. Mechanism analysis indicates that the narrowing inequality was partly caused by the ex-post moral hazard of employee participants, the ex-ante moral hazard of resident participants, and the adverse selection of the two types of participants.