Analysis of health insurance reform strategies from a risk-sharing perspective based on the Markov model

Abstract

China’s healthcare system faces increasing challenges, including surging medical costs, resource allocation imbalances favoring large hospitals, and ineffective referral mechanisms. The lack of a unified strategy integrating standardized coverage with personalized payment compounds these issues. To this end, this study proposes a risk-sharing reform strategy that combines equal coverage for the same disease (ECSD) with an individualized out-of-pocket (I-OOP) model. Specifically, the study employs a Markov model to capture patient transitions across health states and care levels. The findings show that ECSD and I-OOP enhance equity by standardizing disease coverage while tailoring costs to patient income and facility type. This approach alleviates demand on high-tier hospitals, promoting primary care utilization and enabling balanced resource distribution. The study’s findings provide a reference for policymakers and healthcare administrators by presenting a scalable framework that is aligned with China’s development goals with the aim of fostering an efficient, sustainable healthcare system that is adaptable to regional needs.