Health payment-induced poverty under China's New Cooperative Medical Scheme in rural Shandong

OBJECTIVE: To measure the incidence and severity of health payment-induced poverty of rural households under the New Cooperative Medical Scheme (NCMS) in rural Shandong, China. METHOD: We collected primary data from a household survey to identify catastrophic health payments and measure associated health payment-induced poverty in a county of Shandong province. From a stratified random cluster sample of 3101 households, 375 households that might be at risk of catastrophic payments were identified and interviewed. A validity test of the screening method was conducted, from which we obtained the adjusted total number of households with catastrophic payments in the sample of 3101. The health payment-induced poverty incidence and severity were compared without and with NCMS reimbursements. RESULTS: Before the NCMS intervention, 5.06% of the sample households fell below the national poverty line due to health payments in 2004, compared with 4.03% after reimbursements. With NCMS reimbursements, the health payment-induced poverty gap of those households still remaining below the Chinese national poverty line dropped by 19.2% to an average of 977.2 Yuan. CONCLUSION: Out-of-pocket health payments remain a severe burden for rural households. Financial protection from the NCMS was limited.