Explaining the Evolving Demand for Healthcare in Rural China 2011-2018: A Non-Linear Decomposition Approach


With a goal of reducing patient loads at upper-level health facilities, reforms of China’s health system over the past decade have aimed to strengthen primary care in lower-level clinics and health centers. This paper studies the changes in rural patient demand for health services across tiers of China’s rural health system using longitudinal and nationally-representative data spanning 2011 to 2018. Despite policy goals, we document a continued large-scale shift in utilization from lower-level facilities to upper-level hospitals. We estimate that between 2011 and 2018, village clinic utilization dropped by 35% while the utilization of outpatient services in county hospitals increased by 78%. Non-linear decompositions show that structural changes in the patient, provider, and community factors accounted for more than half of the decrease in the demand for health services at the village level. The changing disease pattern shifting towards chronic diseases, along with the decreased availability of medical resources at village clinics, were the strongest contributors to the demand shift.

Working Paper