Rural Mutual Health Care

William Hsiao has organized and leads a team of researchers performing a social experiment in reforming rural health care in China. Current studies are being conducted in Guizhou and Shaanxi and involve approximately 60,000 Chinese peasants. This experiment has demonstrated that Community Rural Financing has the potential to be financially sustainable, increase efficiency and quality in health care delivery while drastically enhancing risk protection for the rural poor. As the study continues, the team is also focusing its energies on possible strategies for the expansion of the community-financing scheme. The project has gained special relevance as China sits at the eve of a major rural health system reform.

RMHC has a unique design in terms of financing, payment, and management. The scheme is jointly financed by the central government and the peasants and covers both outpatient and inpatient services. The payment system for village doctors has been changed from fee-for-service to salary and performance bonus, while bulk purchasing and measures to eliminate counterfeits were introduced to maximize the benefits while reducing costs. Moreover, the insurance scheme is managed entirely by the peasants.


RMHC in the News

Harvard Public Health Review

The Harvard Public Health Review featured RMHC in their Fall 2006 edition. Here is their description:

“Hsiao’s RMHC experiment enrolls peasants in a voluntary prepaid insurance plan covering preventive, primary, and catastrophic care. The plan is financed by low individual premiums (U.S. $2 a year) combined with a subsidy (U.S. $2.50 a year) which, in the experiment, is paid out of Hsiao’s research funds (in the future, the Chinese government would pay). Although RMHC requires co-payments, it guarantees access to care and reforms the delivery system.”
“To address inefficiencies and spotty quality, the scheme empowers peasants to hire village doctors, and to purchase pharmaceuticals through a competitive bidding system that roots out a major problem: counterfeit drugs. A management committee can inspect health facilities and monitor the quality of care.”

Read the full article here.

Harvard China Review

The Harvard China Review invited William Hsiao to write a feature about RMHC. Here is an excerpt from that article.

“The basic premise of RMHC is to increase public funding for the peasants and
significantly improve productive efficiency of health care. The strategy in achieving
these outcomes is integration of funds from the government and peasants into a
prepayment scheme, turning the decision-making power and control to peasants who
have the greatest interest in making RMHC work and produce benefits at minimum cost.”

Download the full article here.


Below are some photographs from the RMHC field sites. You can scroll through the pictures manually using the arrows, or press play/pause for automatic slideshow.