Recently, the paper Health Expenditure Structure, Individual Health Investment And Resident Welfare co-authored by Wang Shusen, a doctoral student in our School, and his supervisor Professor Yang Chengyu was published in the 6th issue of 2023Economic Research. This paper uses macroeconomic theoretical model and numerical simulation method to analyze the impact of the proportion of government's preventive health expenditure and medical insurance reimbursement ratio on individual health investment, residents' health status and welfare level and its mechanism, providing quantitative policy reference for continuously optimizing the structure of government health expenditure and effectively implementing the strategy of healthy China.

The fundamental goal of the strategy of Healthy China in the new era is to realize the health of the whole people, and the way the government allocates public medical and health resources has a great impact on the realization of the strategic goal of healthy China. This paper studies the effects of the proportion of government's preventive health expenditure and the proportion of medical insurance reimbursement on individual consumption and health decision-making and its mechanism based on the two-sector overlapping generation model, and analyzes the quantitative effects of medical and health policy adjustment on total health expenditure, personal health expenditure, total social consumption and the degree of financial dependence of medical insurance fund through numerical simulation. The study finds that after the economic impact of public health policy adjustment is decomposed into direct health effect and indirect price effect, the overall policy effect shows a U-shaped change. Moderately increasing the proportion of government's preventive health expenditure can not only improve residents' health status but also enhance the welfare level. It can also reduce the proportion of total health expenses to GDP and the dependence of medical insurance funds on financial subsidies, and increase the level of total social consumption. On the other hand, under the current budget system, increasing the reimbursement ratio of medical insurance can reduce the out-of-pocket medical burden of individuals, but it will produce two opposite incentive effects on personal health investment, mainly negative incentive, resulting in a decline in the level of personal health investment with the increase of the reimbursement ratio. The article suggests that the government should continue to increase the financial investment in preventive health services, strengthen the health gatekeeper capacity of primary medical and health institutions, and appropriately increase the medical reimbursement ratio to reduce personal medical burden and promote total social consumption, but pay attention to the negative incentives that may lead to personal health investment, the resulting proportion of the total health costs and the increased financial dependence of the medical insurance fund.

Economic Research is a comprehensive journal of economic theory sponsored by the Institute of Economics of the Chinese Academy of Social Sciences. Founded in 1955, it is recognized as the most internationally influential academic journal (Humanities and Social Sciences) in China and the "top" journal in the field of Economics in China.

Wang Shusen and Yang Chengyu (corresponding authors), Health Expenditure Structure, Individual Health Investment And Resident Welfare, published in the journal of Economic Research, 6 (2023), 190-208.

http://www.erj.cn/cn/mlInfo.aspx?m="20230222141814467743&n=20230626095041500662&tip=0。

About the authors:

Wang Shusen, 2020 Doctoral student of Western Economics, BNUBS; Master of Economics, Institute of Industrial Economics, Chinese Academy of Social Sciences.

Yang Chengyu, Professor at BNUBS, PhD in Physics, Beijing Normal University, PhD in Economics, University of Southern California, USA, and Visiting Professor at Ludwigshafen University of Business and Society, Germany. His research interests include income distribution, poverty and fiscal policy, population and health economics, and cultural consumption. He has published several papers in Economic Research as the first author, and has won the Famous Teacher Award and the Excellent Doctoral Dissertation Advisor Award of Beijing Normal University.

Provided by Scientific Research Office

Edited by Sun Yue

Reviewed by Cai Hongbo