Prague Economic Papers 2014, 23(2):233-249 | DOI: 10.18267/j.pep.482

Competent Alternative Model for the Peasants' Medical Expenditures in China: A Case of New Rural Cooperative Medical Service System (Nrcms) in Zhejiang Province

Lu Wencong1, Cheng Ying2, Mohummed Shofi Ullah Mazumder3
1 Dept. of Agriculture, Economics and Management, School of Management, Zhejiang University, Hangzhou-310085, China (wenclu@zju.edu.cn).
2 School of Management, Zhejiang University, Hangzhou, China & Accounting College, Hangzhou Dianzi University, Hangzhou, China (corresponding author) (chengying_hz@163.com).
3 School of Management, Zhejiang University, Hangzhou, China & Dept. of AEIS, Sher-e-Bangla Agril. University, Sher-e-Bangla Nagar, Dhaka-1207, Bangladesh (shofi_keron@yahoo.com).

The New Rural Cooperative Medical Service System (NRCMS) in China has been established to ensure improved medical care support for all categories of Chinese peasants to offset their burden of excessive medical care expenditures. The primary aim of this paper is to identify an appropriate alternative modelling approach for the patients' medical expenditures. Data were collected from Jiaojiang city through cluster and multistage random sampling procedure, which was comprised of 4,630 enrolled rural people under NRCMS. The paper presented the first comparison of common econometric medical expenditures modelling approaches. Major findings reveal that the Generalized Linear Model (GLM) predictive accuracy appears to be better than the Finite Mixture Model (FMM) and GLM (log link) was the best performer among all approaches. It may be attributed due to the structural difference of medical expenditures between China and other developing countries compared to the developed countries. This suggests that the Chinese government may find an alternative to choose GLM approach among others to minimize the peasants' medical expenditures under NRCMS.

Keywords: New Rural Cooperative Medical Service System (NRCMS), Patients´ Medical Expenditures,, Generalized Linear Model (GLM) and Finite Mixture Model (FMM)
JEL classification: C52, H51, I18

Published: January 1, 2014  Show citation

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Wencong, L., Ying, C., & Mazumder, M.S.U. (2014). Competent Alternative Model for the Peasants' Medical Expenditures in China: A Case of New Rural Cooperative Medical Service System (Nrcms) in Zhejiang Province. Prague Economic Papers, 23(2), 233-249. doi: 10.18267/j.pep.482
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