Medical expenditure in urban China: a quantile regression analysis

Many countries have been trying to expand their public health insurance coverage in recent years. To achieve two fundamental policy goals—equity in health care utilization and control of health care costs—policymakers need a better understanding of the underlying determinants of individual health care expenditure beyond the results of mean regressions. In this paper, we apply a quantile regression method to investigate the heterogeneous effects of various determinants of medical expenditure in China. Comparing with the average effects, we find that health care expenditures at the upper end of the distribution are under stronger influences of need factors such as poor health status, and weaker influences of socioeconomic factors and insurance status. On the other hand, health care expenditures at the lower end of the distribution are under stronger influences of socioeconomic factors and insurance status, and weaker influences of need factors. Our study may provide useful information to policymakers for the optimal design of their health care systems, and it may be of particular interests to the health policymakers in China, where is currently still in a period of reshaping its health-care system.