The Singapore Economic Review

In this paper, we first briefly review the changes that the Chinese health care system has undergone since the early 1980s. We then describe the major current health policy initiatives in urban and rural areas and discuss likely scenarios for their evolution over time. Using comparisons with international experience regarding different institutional arrangements in the health care sector, we also discuss whether the approaches taken in China are likely to strengthen the health care system in terms of efficiency and equity. Our conclusion is that in order to predict how effectively China's future health care system will perform in the future, one must have more information about what role the state (central government) will play, as regulator, partial funder and direct provider in the system. We believe that the best strategy at present is to allow the development of a mixed model with significant roles for both the state and the private sector, in both the supply of health care services and the provision of health insurance.

The medical savings account (MSA) model of health care financing is viewed as a health care cost containment strategy. Yet, health care expenditure in Shanghai has increased sharply since the adoption of the MSA system. This paper looks into the health care reforms in Shanghai, especially since the introduction of the MSA scheme.

From the Labor Insurance Scheme and Government Insurance Scheme to the Medical Savings Account scheme, ordinary Shanghai residents have not benefited from the most recent health care reforms. They have found medical care much less affordable. Disparity in access to health care access has become more evident than ever. Meanwhile, health care cost has increased sharply. China has benefited from an emphasis on prevention and primary care, but the government's recent policies give a high priority to catastrophic disease. This is not a cost-effective approach. Shanghai's health care system needs to break socioeconomic class boundaries if it is to construct a harmonious society. Shanghai's decision makers and various stakeholders have the resources and wisdom to face the challenge.

To explain divergent physician practices, studies focus on either differences in education and training or in financial incentives. The policy challenge is to identify the most cost-effective interventions to encourage adherence to practice guidelines. Utilizing private physician data in major cities in the Philippines, we show the effects of training and financial incentives in physician adoption of the TB DOTS protocol. Training seems to be more important when the new protocol is a significant departure from the old know-how, while financial incentives seem to work better on those who are already clinically competent. These imply that uniform application of information-based and incentive-based interventions may not be cost-effective.

This paper shows that regardless of any intra-country income differences, parallel imports result in a lower level of health-care innovation but, contrary to popular as well as conventional theoretical wisdom, a lower price in the Third World compared to market-based discrimination. Despite such a lower price, however, parallel imports unambiguously make all buyers in the Third World worse off when intra-country income disparity exists. On the other hand, even discarding the MNC's profit, there will be cases in which the richer country prefers price discrimination as well. That is, in those cases, no countries will have any incentive under the welfare criterion to undo price discrimination, contrary to Richardson (2002).

A physician chooses not only the supply of medical treatment, contingent on the result of a diagnostic test, but also the quality of his service. Two sources of uncertainty are introduced. One source arises as, based on the patient's "apparent" symptoms, only a priori estimates of the likelihood of alternative medical conditions can be inferred. They can be improved upon by a diagnostic test, but inherent in such tests is the possibility of a "false positive". This second source of uncertainty is shown to be critical in the possible over- or undersupply of medical treatment. Remedial pricing structures are suggested.

This paper evaluates the benefits of the health card subsidy, issued by the Indonesian government after the financial crisis in 1997, on elderly health care demand. The health card subsidy provides free access to health services, and was accepted at any available health center or puskesmas. Using the Indonesia Socioeconomic survey data (Susenas) for 2003, results show that health cards issued to the poor consistently increase the demand for health care facilities among the old population. Unfortunately, it is also found that the health card benefited wealthier individuals in their access to health centers or puskesmas.

Long-Term Care Insurance (LTCI), introduced in Japan in 2000, is rapidly turning into a system of rationed benefits due to financial difficulty. Based on our survey of 2,530 family care-givers and the Zarit Care-Giver Burden Index, we have examined how LTCI is affecting their subjective burden. We have found that, as Kishida and Tanigaki (2004) had shown, (i) insufficient provision of short-term stays, day services and home-helper services, as well as (ii) disruptive or antisocial behaviors of the elderly, increase the care-giver's burden. We then argue that (iii) these results establish the positive contribution of LTCI in the well-being of family care-givers, (iv) short-term stay is the most efficient service, followed by home-helper service, and day service is the least efficient, and we show that (v) J-ZBIC-8 works well enough for many practical purposes.

While a large literature exists on the siting of controversial facilities, few theories about spatial location have been tested on large samples. Using a new dataset from Japan, this paper demonstrates that state agencies choose localities judged weakest in local civil society as host communities for controversial projects. In some cases, powerful politicians deliberately seek to have facilities such as nuclear power plants, dams and airports placed in their home constituency. This paper then explores new territory: how demographic, political and civil society factors impact the outcomes of siting attempts. It finds that the strength of local civil society impacts the probability that a proposed project will come to fruition; the greater the concentration of local civil society, the less likely state-planned projects will be completed.