Applied Health Economics and Health Policy

, Volume 9, Issue 1, pp 39–49 | Cite as

Determinants of out-of-pocket health expenditure in China

Analysis using China health and nutrition survey data
  • Xuedan YouEmail author
  • Yasuki Kobayashi
Original Research Article



Within total health expenditure, the share of out-of-pocket health expenditure by individuals has increased in the past 25 years in China, from 20% in 1980 to 49% in 2006, with a peak of 59% in 2000. Medical issues have become a larger concern than any other issue for households.


To estimate the determinants of individual out-of-pocket health expenditure in China.


We used a subsample of 9860 adults aged ≥18 years from the 2004 China Health and Nutrition Survey. To control for potential sample selection bias, the Heckman selection model was used to analyse individuals’ health expenditure decisions, which is based on a sample that excludes individuals who do not report paying for healthcare.


Of the sampled population, 24.6% reported recent illness, 80.6% of whom sought care; 82.3% of those who sought care reported the amount of health spending. The average out-of-pocket health expenditure was Chinese Yuan (Y) 502 (Y100 = $US12.2 in 2004). Illness perceived as ‘quite serious’ and self-reported poor health status had the highest coefficients (2.012 [p < 0.01] and 3.351 [p < 0.01], respectively). People spent more on healthcare with increasing age, especially over the age of 65 years, with a coefficient of 1.171 (p < 0.01). Those who had chronic disease, earned higher incomes, resided in urban areas, lived in the middle or eastern region, or lived in a household with a head having a middle school or higher education paid more for healthcare. In the model examining disaggregated effects of insurance programmes, the coefficients were positive, except for commercial insurance, and the coefficient for labour insurance was significant.


Perceived severity of illness and self-reported health status are the most important factors when determining out-of-pocket health expenditure. The effect of aging is substantial. China should develop appropriate medical relief policies for the elderly to help them gain access to necessary healthcare services. Certain types of insurance programmes tend to increase out-of-pocket health expenditures, which highlights the need to continuously monitor and rigorously evaluate the impact of ongoing health insurance reform in China.


Health Expenditure Healthcare Utilization Insurance Programme Health Spending Income Quintile 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.



No sources of funding were used to conduct this study or prepare this manuscript. The authors have no conflicts of interest that are directly relevant to the content of this study.

The authors thank the China Health and Nutrition Survey, funded by NIH (R01-HD30880, DK056350, and R01-HD38700), and the Carolina Population Center and the Chinese Centre for Disease Control for providing the survey data. The authors also thank three anonymous reviewers for helpful comments.


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Copyright information

© Adis Data Information BV. 2011

Authors and Affiliations

  1. 1.Department of Public Health, Graduate School of MedicineUniversity of TokyoTokyoJapan

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