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Frontiers of Economics in China

Front. Econ. China    2014, Vol. 9 Issue (4) : 634-660     DOI: 10.3868/s060-003-014-0029-7
research-article |
The Risks and Dynamics of Health Care Expenditures in Urban China: An Illustration in Kunshan City
Guan Gong1(),Hongmei Wang2(),Lingli Xu3()
1. School of Economics, Shanghai University of Finance and Economics, Shanghai 200433, China
2. College of Public Health, University of Nebraska Medical Center, Omaha, NE 68198-4350, USA
3. School of Economics, Shanghai University, Shanghai 200444, China
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This paper examines the individual financial risk of health care expenditures over time in urban China, using longitudinal health expenditure data from 2005 to 2007 in Kunshan City, Jiangsu Province, China. We find that the stochastic process of log total health care expenditures is well represented by the sum of an AR(3) process and a white noise process. Simulating this model, we find that the urban health insurance system protects enrollees from the risk of catastrophic health care expenditures by bearing the majority of the health care expenditures. However, out-of-pocket health care expenditures represents a considerable risk to an individual’s financial status.

Keywords out-of-pocket expenditures      financial risk      urban health insurance system      China     
Issue Date: 11 December 2014
 Cite this article:   
Guan Gong,Hongmei Wang,Lingli Xu. The Risks and Dynamics of Health Care Expenditures in Urban China: An Illustration in Kunshan City[J]. Front. Econ. China, 2014, 9(4): 634-660.
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