Impact of Income Shock on Health Care Utilization of Rural Residents in China - Evidence From Charls

OBJECTIVES: In China, rural residents have poorer health status and higher disease burden compared to urban residents. Despite higher demand for health care services, rural residents have lower health care utilization. The purpose of this study is to study the effect of New Rural Pension Scheme（NRPS）pension receipt on the utilization of health care services among rural enrollees.

METHODS: We explore the natural experiment of the NRPS policy rule in China where only those over 60 years old can receive pension. Regression discontinuity design method was used to explored the causal effect of receiving pensions on the medical care and drug utilization. The data used in this study were obtained from China Health and Retirement Longitudinal Study（CHARLS）2018.

RESULTS: Without significant changes in health status and medication needs, pension receipt as an income shock significantly increases the probability of drug purchase among insured rural residents. However, there is no significant effect on the utilization of outpatient and inpatient care.

CONCLUSIONS: The findings demonstrate that small regular income shocks effectively increase the probability of drug purchase among insured rural residents, proving that low income remains an important constraint to the health management among rural residents. Possible explanations are that drug expenditures tend to be small and cyclical. The amount of pension received once a month is small, but it can regularly cover drug expenses. To alleviate the overall disease burden in rural populations, our study recommends further enhancing drug accessibility and providing regular drug purchase subsidies.