Allocative efficiency and equity of public health budget in three provinces of China

Abstract

The objectives of this study are to describe the trends of government health budget in three provinces (Shanxi, Jiangsu, and Guizhou provinces) of China, to evaluate the allocative efficiency between curative and preventive budget, and the equity of public health budget among 5 counties in the three provinces during 1985-1993 The study analyzed data from a special survey which was conducted by Chinese Academy of Preventive Medicine in 1994. Results show that : in the three provinces, the proportion of government health expenditure to GCP has decreased: the ratio of government recurrent budget for health to total government expenditure also has a decreasing trend; especially for the preventive sector, the proportion of budget to GCP decreased dramatically. They indicates that government gradually paid less attention to the preventive health sector. A model was established to evaluate the allocative efficiency between preventive and curative budget before and after the economic reform in 1989. The marginal effect of preventive and curative budget were estimated. Results show that, before the economic reform, the marginal effect of preventive budget was smaller than that of the currative one. But after the economic reform, the curative budget marginal effect was only 60% of preventive one. It indicates that before economic reform government allocated too much budget to the preventive sector. But after the reform, local government over allocated budget to the curative sector. Gini coefficient was used to coefficient was used to evaluate the equity of preventive and curative budget among the 5 counties during the 9 years. Results show that, poorer counties got more preventive budget than richer counties, while richer counties got more curative budget than poorer counties from local government. The equity of both type of budget decreased after the economic reform due to decentralization.