Impact on members and retail pharmacies of China's Urban Employee Basic Medical Insurance medicine purchasing reforms: Case studies in Wuhan

doi:10.21203/rs.3.rs-4292163/v1

Background

In 2023, local health authorities implemented prescription medicine purchases from retail pharmacies by urban employee basic medical insurance (UEBMI) members. Using case studies from Wuhan, we assess the impact of the 2023 medicine purchasing reform on the medicine buying behavior; evaluate the benefits of the changes to UEMBI members; and provide insights into China’s retail pharmacies’ business model.

Methods

Daily UEBMI claim data was collected at two Wuhan pharmacies from March 2022 to December 2023, including data on customer age, sex, employment state and claim type before and after the implementation of the 2023 policy. The impact of the new retail pharmacy purchasing policy on medicines purchasing behavior, such as the number of medicine purchasers, the total expenditure per capita, and the medical savings accounts expenditure per capita, were quantitatively evaluated using descriptive statistics and interrupted time series analysis (ITSA).

Results

The characteristics of medicine purchasers were not significantly affected by the new policy. Retired UEBMI members benefited more from allowing UEBMI funds for prescription purchases from retail pharmacies than currently employed UEBMI members. The number of UEBMI member medicine purchasers from retail pharmacies showed a significant upward trend, increasing the benefits to UEBMI members, without medicine over-use or risk of fraud. The benefit to members was measured by the absence of any significant upward per capita total expenditure trend and a significant decrease in the proportion of medicine expenditures from members personal medical savings accounts.

Conclusions

The 2023 reforms allowed UEBMI members to purchase medicine from retail pharmacies, providing medicine accessibility and affordability for members, especially retired members; did not trigger an increase in members’ medicine consumption; attenuated the over-use of hospital pharmacies; and transformed pharmacies’ business model away from a singular focus on price competition towards a combination of price competition and health services.

Insurance financing reform

Retail pharmacies

Medicines purchasing behavior

Interrupted time series analysis

Since the establishment of China’s urban employee basic medical insurance (UEBMI) in 1998, social medical health insurance has been a fundamental element in China’s healthcare security system [1–4]. Funded by employed members and their employers, UEBMI is the largest social medical insurance plan in China covering urban employed and retired workers with urban residency. Employed members become lifetime members after paying the annual premium for 25 years for men and 20 years for women. The premium paid by working members is 2% of the member’s salary, deposited into the individual member’s medical savings accounts (MSAs), while the premium paid by employers, which is 6% of the member’s salary, was partly deposited into MASs (30%) and partly into the social pooling account (SPA) (70%). The SPA is administered by the local healthcare security administration for inpatient services and outpatient services for catastrophic illnesses. MSAs were mainly used for outpatient services and medicine purchasing in retail pharmacies. UEBMI’s reimbursable coverage of medicines, medical consumables and facility use is regulated by the National Reimbursement Drug List (NRDL), National Reimbursement Medical Consumables List (NRMCL) and National Reimbursement Medical Service Facility List (NRMSFL). Like other types of health insurance, patients must pay a deductible (approximately 10% of average annual wages of a local urban worker) for health services and medicine, with the remainder shared by SPA (usually 70–80%) and MAS (usually 20–30%). When the maximum of SPA (fourfold local average annual wages) has been paid or an individual’s MSA has been exhausted, the patient must pay their expenses as out-of-pocket (OOP) cash payments. Unspent funds in MSAs can be carried forward to the next year, and any remaining balance of a member’s MSA at death can become part of their estate[5]. In 2022, RMB2079.33 billion (US$287.36 billion) was deposited into SPA and RMB763.31 billion (US$105.49 billion) into MSAs.

Purchasing medicines in retail pharmacies and hospital pharmacies was different. First, regulated by the pharmacy administration committee, most medicines in hospital pharmacies target serious diseases, while most medicines in retail pharmacies were regulated by private owners for common diseases. For a range of diseases, retail and hospital pharmacies dispensed the same medicines. Second, claimed by UEBMI SPA, the expenditures of medicines in hospital pharmacies were included in the corresponding inpatient or outpatient services, while the expenditures of medicines in retail pharmacies were not covered by UEBMI SPA, but paid by OOP cash or MSAs. Finally, to avoid medicine price markups by hospitals, the prices of medicines in hospital pharmacies were required to be equivalent to their purchase cost [6]. Prices of medicines in retail pharmacies were decided by market competition between privately owner pharmacies.

Based on Singapore's mediSave account system[7, 8], UEBMI’s SPA arrangements restricted the expansion of outpatient healthcare coverage as healthcare demands have increased [9]. Not covered by SPA, UEBMI members, especially retired members with serious or multiple chronic diseases, faced marked difficulties in affording outpatient healthcare services and medicines dispensed by retail pharmacies [10, 14–17]. Second, the lack of UEBMI’s SPA for outpatient services led to excessive hospitalization and wasteful over-use of hospital resources, including medicines. The 2019 hospitalization rate of the UEBMI members was 18.7%[11], much higher than countries and regions with a similar GDP level to China and some OECD countries[12]. Finally, China’s unequal development meant that MSA balances for outpatient and medicine purchases impacted UEBMI members differently depending on members’ provinces and regions, with deficits in less developed and excessive balances in developed areas[13].

To address issues specific to retail pharmacy medicine purchases, the government issued a new policy in 2023 to include eligible retail pharmacies in the UEBMI’s SPA outpatient scheme[19]. Each local and regional health authority have interpreted, piloted and implemented the new policy differently. Wuhan issued a new local UEBMI policy stating that both SPA and MSA were available for medicines prescribed by outpatient physicians in hospitals and purchased in retail pharmacies. After the deductible, Fig. 1 shows the changes to the co-payment share by employed and retired members for medicine at Wuhan’s retail pharmacies, primary hospitals, secondary hospitals and tertiary hospitals. In all cases, the co-payments fell, benefiting members, with the co-payment for retail pharmacies pegged at the same level as primary hospitals. Also as part of the reforms, the deductible, previously RMB700 (US$96.74) for employed members, and RMB500 (US$69.10) for retired members, was eliminated; the reimbursement maximum for retired members was increased from RMB4000 (US$552.80) to RMB4500 (US$621.90). Finally, all the insurance scheme coverage expansion mentioned above came from the increase of SPA, driven by the 30% reallocation of employer premiums to SPA from MSA.

The 2023 changes to UEBMI health insurance coverage aimed to increase the utilization of retail pharmacy healthcare services[20, 21], promote better member health outcomes and control the over-use of hospital health resources[22–26]. But research on the impact of the 2023 UEBMI changes to medicine purchasing in retail pharmacies on members and retail pharmacies is scarce. We assess the impact of Wuhan’s 2023 medicine purchase policy on the medicine purchasing behavior of UEBMI members, evaluate the benefits of the changes to members, and provide recommendations for China’s retail pharmacies business model.

Data

Given competition between China’s retail pharmacies and their private ownership, pharmacies are reluctant to allow access to private purchasing and pricing data for academic research. Under strict confidentiality rules, one of Wuhan’s leading pharmacy chains granted access to Pharmacy A, located in a residential community near several hospitals, and Pharmacy B, located in a commercial pedestrian street in a business district. The two retail pharmacies represent the main geographical distribution of retail pharmacies either near hospitals, business districts or residential community. The Wanfangtang chain operates more than twenty retail pharmacies in Wuhan, and the annual revenue, number of employees, space and number of medicines on sale in the two pharmacies were close to the average level of all pharmacies in Wuhan.

With Pharmacy A and Pharmacy B included in Wuhan’s new UEBMI’s outpatient scheme in February 2023, we collected daily UEBMI claim data from March 1, 2022 to December 15, 2023. The data involved customer information, medicines purchased and claim information by UEBMI members who purchased medicines and received reimbursed through UEBMI’s outpatient scheme. Based on previous studies on health service utilization[27, 28], we evaluated policy effects from two facets: customer characteristics and medicine purchasing behavior. Customer characteristics included age, sex, employment state, claim type and the source of prescriptions. Employment state was currently employed UEBMI members or retired members, with the UEBMI’s outpatient scheme for retired members more generous than for the currently employed [29]. The claim type was whether the expenditure was reimbursed by the UEBMI’s outpatient scheme at the same rate as hospital pharmacies. The source of prescriptions was classified as whether the medicine purchaser's UEBMI was enrolled in Wuhan, and whether the medicines were prescribed by the physician at a hospital as part of the prescription circulation scheme. Prescription circulation connected prescription data between hospitals and retail pharmacies, where physicians in hospitals upload their electronic prescription to the platform accessed by retail pharmacies allowing patients to purchase medicines from any eligible retail pharmacy [30]. Prescription circulation aimed to address the over-use of hospital pharmacies, increase hospital—retail pharmacy competition, benefit UEBMI members by easing access to medicine through retail pharmacies, and strengthen the supply capacity of retail pharmacies[31].

The number of medicine purchasers ($NMP$), the total expenditure per capita (${TE}_{pc}$), and the MSAs expenditure per capita (${ME}_{pc}$) were used to measure the medicine purchasing behavior and their changes before and after the implementation of the 2023 policy. $NMP$ was the total number of medicine purchasers measured in days, and ${TE}_{pc}$ and ${ME}_{pc}$ were the average expenditure measured in days. Retail pharmacy hours were similar to hospital pharmacy hours.

Statistical analysis

In common with previous research[32, 33], descriptive statistics, comprising mean, standard deviation and t-test, were employed to analyze the customer characteristics. Chi-square tests were employed for disordered classified data, and the difference was statistically significant at P < 0.05. We used interrupted time series analysis (ITSA) [34] to assess the longitudinal effects of including retail pharmacies in UEBMI's outpatient medicine purchasing scheme. We used the Durbin-Watson (DW) statistic to detect the residual autocorrelation in the time series data, and fit the regression models of the two periods before and after the implementation of the policy:

$${Y}_{t}=\alpha +{\beta }_{1}{X}_{1}+{\beta }_{2}{X}_{2}+{\beta }_{3}{X}_{3}+{\epsilon }_{t}$$

where ${Y}_{t}$ is the outcome variables $NMP$, ${TE}_{pc}$ or ${ME}_{pc}$ of day $t$; ${X}_{1}$ is a continuous time variable, representing the time since the beginning of the study. Given the initial publicity after policy was implemented, our study assumed that the intervention time of the policy was March 1, 2023 which is represented by ${X}_{1}$=1, and the ending time of December 15, 2023 is represented by ${X}_{1}$=652; ${X}_{2}$ is the intervention variable which is 0 before and 1 after the new policy was implemented; ${X}_{3}$ is a continuous variable, representing the number of days since the new policy was implemented. December 15, 2023 was represented by ${X}_{3}$=319, and ${X}_{3}$=0 or =${X}_{1}$-319 represent day before and after the policy was implemented. In our model, α is the estimated baseline level of $NMP$, ${TE}_{pc}$ or ${ME}_{pc}$; ${\beta }_{1}$ is the estimated slope of the outcome variables before the new policy was implemented; ${\beta }_{2}$ is the estimated level change of the outcome variables after the intervention; ${\beta }_{3}$ is the estimated slope change of the outcome variables after the intervention; ${\epsilon }_{t}$ is the error term, indicating random effects that the model cannot explain.

Customer characteristics

Table 1 summarizes the 12,772 claim data extracted from Pharmacy A and Table 2 22,184 claim data from Pharmacy B. In terms of the age, sex and employment state of members, the implementation of the policy did not lead to any statistically significant changes. The customers were mainly middle-aged and older members, with the majority current employees, indicating that the demand for medicines did not change significantly with the new 2023 policy. However, the number of prescription circulations increased on average by about 30% after the implementation of the 2023 policy, which means that patients increasingly chose to purchase medicines at retail pharmacies after their medicines were prescribed by hospital doctors.

After the implementation of the 2023 policy, the total expenditure per capita for members in the two pharmacies fell by RMB33.02 (US$4.56) in Pharmacy A and RMB21.41 (US$2.96) in Pharmacy B. From 100 percent, the average out-of-pocket proportion was reduced to 78.99 percent in Pharmacy A and 80.1 percent in Pharmacy B, which shows that the new policy helped relieve the out-of-pocket economic burden on members. These price changes were driven by the average UEBMI SPA expenditure, which changed from no contribution to RMB18.66 (US$2.58) per capita in Pharmacy A and RMB14.21 (US$1.96) per capita in Pharmacy B. While the 2023 policy cancelled the transfer of 30 percent employer premiums from MSA to SPA, the SPA and MSA together saw the MSAs expenditure per capita reduced by RMB50.35 yuan (US$6.96) in Pharmacy A and RMB35.87 yuan (US$4.96) in Pharmacy B.

Although both pharmacies were included in UEBMI’s outpatient scheme in early February 2023, customers did not claim through this channel until late February. Figure 2 shows that as an increasing number of patients learned about the new policy, the daily proportion of customers claiming through UEBMI’s outpatient scheme in both pharmacies continually increased, which meant a significant increase in UEBMI SPA expenditures in both pharmacies in Fig. 3. Figure 4 shows the implementation of the 2023 policy continued to encourage patients to switch from purchasing medicines in hospitals to retail pharmacies, promoting the further use of the prescription circulation system.

The Chi-square test in Table 3 revealed a significant difference in the UEBMI’s outpatient scheme utilization rate between employed and retired members (χ²=124.759, P < 0.000 for Pharmacy A; χ²=118.245, P < 0.000 for Pharmacy B). The more generous coverage for retired members worked as an effective economic incentive, leading to higher utilization rate by retired members. Given that most retired members suffer from more chronic diseases, the new policy played a significant role in reducing the long-term financial burden on retired members.

Table 1

Descriptive statistics of customer characteristics for Pharmacy A
Variables	Before (n = 5342)	After (n = 7430)	T or χ² value	P-value
Sex
Male	2592(48.52%)	3592(48.34%)	0.039	0.844
Female	2750(51.48%)	3838(51.66%)
Employment state
In-service employees	4476(83.79%)	6306(84.87%)	2.773	0.096
Retired employees	866(16.21%)	1124(15.13%)
Claim type
UEBMI’s outpatient scheme	0(0%)	2180(29.34%)	1889.960	0.000***
Others*	5342(100%)	5250(70.66%)
Source of prescriptions
Not registered in Wuhan	51(0.95%)	590(7.94%)	3225.916	0.000***
Registered in Wuhan	5291(99.05%)	4671(62.87%)
Prescription circulation	0(0%)	2169(29.19%)
Age	42 ± 14	42 ± 13	1.358	0.463
${TE}_{pc}$	121.85 ± 237.03	88.83 ± 157.52	128.95	0.000***
OOP expenditure	121.81 ± 237.04	70.17 ± 155.23	202.14	0.000***
UEBMI fund expenditure	0.04 ± 1.4	18.66 ± 43.14	-239.03	0.000***
${ME}_{pc}$	119.55 ± 216.36	69.2 ± 154.83	203.30	0.000***
Cash expenditure	2.25 ± 89.64	0.97 ± 10.63	9.49	0.000***

UEBMI Urban Employee Basic Medical Insurance, ${TE}_{pc}$ the total expenditure per capita, OOP out-of-packet, ME_pc the MSAs expenditure per capita; *Customers are not reimbursed for medicines that are not on the National Reimbursement Drug List (NRDL) Significance levels *P < 0.1; **P < 0.05; ***P < 0.01

Table 2

Descriptive statistics of customer characteristics for Pharmacy B
Variables	Before (n = 11083)	After (n = 11101)	T or χ² value	P-value
Sex
Male	4984(44.97%)	4876(43.92%)	2.457	0.117
Female	6099(55.03%)	6225(56.08%)
Employment state
In-service employees	10507(94.80%)	10549(95.03%)	0.580	0.446
Retired employees	576(5.20%)	552(4.97%)
Claim type
UEBMI’s outpatient scheme	0(0%)	3537(31.86%)	4201.082	< 0.000
Others*	11083(100%)	7564(68.14%)
Source of prescriptions
Not registered in Wuhan	270(2.44%)	859(7.74%)	4896.234	< 0.000
Registered in Wuhan	10803(97.66%)	6756(60.86%)
Prescription circulation	0(0%)	3486(31.40%)
Age	35 ± 10	35 ± 10	0.254	0.846
${TE}_{pc}$	94.91 ± 148.71	73.5 ± 130.45	134.95	< 0.000
OOP expenditure	94.75 ± 148.59	58.87 ± 130.05	226.37	< 0.000
UEBMI fund expenditure	0.04 ± 2.59	14.21 ± 30.23	-260.59	< 0.000
${ME}_{pc}$	94.38 ± 147.77	58.51 ± 129.78	226.75	< 0.000
Cash expenditure	0.37 ± 15.09	0.36 ± 6.19	0.23	0.268

UEBMI Urban Employee Basic Medical Insurance, ${TE}_{pc}$ the total expenditure per capita, OOP out-of-packet, ME_pc the MSAs expenditure per capita; *Customers are not reimbursed for medicines that are not on the National Reimbursement Drug List (NRDL) Significance levels *P < 0.1; **P < 0.05; ***P < 0.01

Table 3

Chi-square test of the claim rate of employed and retired members
Pharmacy	Employment state	UEBMI’s outpatient scheme	Others*	χ² value	P-value
Pharmacy A	Employed members	1668(15.47%)	9111(84.53%)	124.759	0.000***
Pharmacy A	Retired members	512(25.73%)	1478(74.27%)	124.759	0.000***
Pharmacy B	Employed members	3302(15.68%)	17754(84.53%)	118.245	0.000***
Pharmacy B	Retired members	254(25.73%)	874(74.27%)	118.245	0.000***
*Customers are not reimbursed for medicines that are not on the National Reimbursement Drug List (NRDL)
Significance levels P < 0.1; P < 0.05; **P < 0.01

Medicine purchasing behavior

The results of medicine purchasing behavior using ITSA are presented in Tables 4–6 and Figs. 5–7. The Durbin-Watson (DW) statistics of the three outcome variables, $NMP 2.186$, ${TE}_{pc}$ 2.085, and ${ME}_{pc}$ 1.999, indicate that there was no autocorrelation in the model residuals. Before the implementation of the policy, the $NMP$ of Pharmacy A (P = 0.756) and ${TE}_{pc}$ (P = 0.140) showed a non-significant increasing trend. In the month of intervention, changes in both $NMP$ (P = 0.943), and ${TE}_{pc}$ (P = 0.151) were also not statistically significant. After the new policy, $NMP$ increased significantly, with a slope of 0.058 (${\beta }_{1}$+${\beta }_{3}$=0.002+0.056, P<0.001), but the increase of ${TE}_{pc}$ was not statistically significant, with a slope of 2.242 (${\beta }_{1}$+${\beta }_{3}$=1.169+1.073, P=0.431). In addition, ${ME}_{pc}$ showed an upward trend before the policy (P=0.014), but significantly declined after, with a slope of -0.186 (${\beta }_{1}$+${\beta }_{3}$=0.065–0.251, P = 0.000).

The situation at Pharmacy B was slightly different. Before the implementation of the policy, $NMP$ showed an increasing trend (P = 0.049) which became more obvious after the intervention with a significant slope of 0.067 (${\beta }_{1}$+${\beta }_{3}$=0.020+0.047, P=0.007). Although ${TE}_{pc}$ increased in the month of intervention (P = 0.559), the increase was not significant after the policy with a slope of 1.004 (${\beta }_{1}$+${\beta }_{3}$=1.757 − 0.7533, P = 0.609). Different from Pharmacy A, ${ME}_{pc}$ of Pharmacy B showed a downward non-significant trend before the new policy (P = 0.757), but a significant downward trend after the policy with a slope of -0.139 (${\beta }_{1}$+${\beta }_{3}$=-0.005-0.134, P = 0.000). This suggests that in the early stage of the new policy, the members did not know or understand the policy, and it took time to adapt to the changes. However, after the policy adaptation period, the policy achieved positive effects, attracting more members to retail pharmacies, but without any significant increase in the total expenditure per capita.

Table 4

The impact of the new policy on $NMP$ based on ITSA
Pharmacies	Coefficients	Values	Std.	T value	P-value
Pharmacy A	Constant	15.415	1.220	12.635	0.000
	Baseline slope ${\beta }_{1}$	0.002	0.006	0.311	0.756
	Step slope${\beta }_{2}$	-0.129	1.808	-0.071	0.943
	Slope change${\beta }_{3}$	0.056	0.010	5.634	0.000
Pharmacy B	Constant	22.628	2.132	10.615	0.000
	Baseline slope ${\beta }_{1}$	0.020	0.010	1.971	0.049
	Step slope${\beta }_{2}$	3.352	3.133	1.070	0.285
	Slope change${\beta }_{3}$	0.047	0.017	2.726	0.007

Table 5

The impact of the new policy on ${TE}_{pc}$ based on ITSA
Pharmacies	Coefficients	Values	Std.	T value	P-value
Pharmacy A	Constant	1608.262	165.859	9.697	0.000
	Baseline slope ${\beta }_{1}$	1.169	0.791	1.478	0.140
	Step slope${\beta }_{2}$	-354.986	246.973	-1.437	0.151
	Slope change${\beta }_{3}$	1.073	1.360	0.789	0.431
Pharmacy B	Constant	2162.662	181.560	11.912	0.000
	Baseline slope ${\beta }_{1}$	1.757	0.866	2.028	0.043
	Step slope${\beta }_{2}$	157.860	269.783	0.585	0.559
	Slope change${\beta }_{3}$	-0.753	1.474	-0.511	0.609

Table 6

The impact of the new policy on ${ME}_{pc}$ based on ITSA
Pharmacies	Coefficients	Values	Standard error	T value	P-value
Pharmacy A	Constant	103.857	5.518	18.823	0.000
	Baseline slope ${\beta }_{1}$	0.065	0.026	2.456	0.014
	Step slope${\beta }_{2}$	-34.571	8.253	-4.189	0.000
	Slope change${\beta }_{3}$	-0.251	0.045	-5.543	0.000
Pharmacy B	Constant	96.495	3.574	26.999	0.000
	Baseline slope ${\beta }_{1}$	-0.005	0.017	-0.309	0.757
	Step slope${\beta }_{2}$	-13.453	5.326	-2.526	0.012
	Slope change${\beta }_{3}$	-0.134	0.029	-4.609	0.000

This is the first empirical study of the impact of the 2023 changes in UEBMI's outpatient scheme on the benefits to members and members’ medicine purchasing behavior. Our results show that the new policy had a positive impact on medicine accessibility and affordability for members. The electronic circulation prescription system promoted medicine purchasing in the retail pharmacies by UEBMI members. Direct retail pharmacy medicine purchases greatly reduced the registration and waiting time of members in hospitals, who did not need any diagnosis and examination in hospital outpatient departments. This attenuated the over-utilization of hospital resources and increased the convenience of members through retail pharmacy purchases. The 2023 reforms supported members’ medicine purchases in retail pharmacies, not only by eliminating the deductible portion, especially for retired members, but also by providing members with a generous reimbursement level from SPA as well as MSA.

The new policy increased the satisfaction of members, as well as their loyalty to the retail pharmacy’s brand. Since attending hospital pharmacies imposed time and economic costs on members, the new policy especially benefited members suffering from chronic diseases, common diseases and frequently-occurring diseases by eliminating the need for frequent visits to hospital pharmacies. Another benefit for members was the availability of preliminary diagnosis services and recommendations for medicines by health consultants at retail pharmacies. These retail pharmacies services also increased patient trust in the retail pharmacies close to members’ homes, encouraging return visits. A further benefit for patients was to attenuate the vicious competition between different retail pharmacies in terms of price by gradually shifting pharmacies away from price competition towards competition in professional health services to attract more UEBMI members. This change significantly transformed retail pharmacies’ business models. Improving professional health services, such as health consultation and chronic disease management, is imperative to meet customers' future health demands [35].

The ITSA results showed no increase in the consumption of medicines after the 2023 UEBMI policy changes, which contrasts with the results of studies on different types of insurance changes in China [36–38]. There are several individual-level reasons for the absence of increases in medicine consumption. Although part of the retail pharmacy medicine purchases were covered by UEBMI SPA, coinsurance meant a proportion of the medicine expenditures were met by out-of-pocket cash or MSAs, constraining medicine over-use. The ‘shrinkage’ of MSAs resulted in the psychological perception of the decreasing consumption ability. Also, there were many competing retail pharmacies, and their distribution offered several pharmacy choices for any UEBMI member, which both constrained price increases and led to price convergence. Finally, the disease spectrum and medicine demand by members remained relatively unchanged.

There were also influencing factors from UEBMI outpatient scheme regulators, which constrained medicine prices and consumption. Although there were differences in the promotion of the new 2023 policy in other cities, regulators in Wuhan regarded the claim risk from the UEBMI fund as their main regulatory aim, while also introducing measures to reduce the impact of the new policy on UEBMI’s SPA[39]. Specifically, when purchasing medicine recorded in NRDL, whether prescription drugs or over-the-counter (OTC), the pharmacist of retail pharmacies had to strictly comply with policy provisions by checking out customer information and prescriptions. While significantly increasing the workload as the number of medicines purchasers increased, the checking of customer information attenuated over-use and over-pricing. The information checking complicated the sales system in contrast to the simple process in the past, increasing the time cost of pharmacist and customer interaction. OTC medicines approved by the National Medical Products Administration were purchased without prescriptions.

The regulations on prescribed medicines purchased by UEBMI members in retail pharmacies did impose some inconvenience to patients. For example, the common treatment cycle for gastric helicobacter pylori infection was one month, but the maximum prescription volume did not exceed three days’ usage, which meant members had to make multiple purchases at their retail pharmacy, increasing the indirect cost and decreased the adherence of patients to take their medicine. It also made it impossible for patients to take medicines away when traveling. To control potential UEBMI claim fraud risks, regulators balanced member convenience against medicine hoarding and reselling[40]. Finally, for some serious disease medicines, such as Shaban for the treatment of deep vein thrombosis after hip replacement surgery, human albumin blood products and 2-line mediation for hypertension, paper prescriptions and medical records issued by hospitals were required when purchasing reimbursable medicines in retail pharmacies. These 2023 rules constrained the benefits to some members.

Similar to other medical insurance reforms [10, 41], some members did not fully understand the mechanism of the new policy, believing that the ‘shrinkage’ of MSAs was a reduction of welfare when the 30% employer premiums paid to MSAs was eliminated. This made many members cautious in their medicine consumption. Although the retired members were satisfied with the new policy, the younger currently employed were less supportive because they were sick less often, accumulated MSA deposits and these large MSA were not available for their families. To address the smaller MSAs, family insurance scheme should be considered [42].

Limitations

Our study has several limitations. Due to data limitations, we were not able to collect the specific medicines in the claims data. Further studies should collect data on specific medicines. Second, ITSA without a control group is applicable for assessing the impact of the reforms, but ITSA cannot provide robust evidence to support the causal relationship between intervention and outcome variables. Third, we collected quantitative data from two retail pharmacies in one Chinese city. Given the municipal-province implementation differences across China, care should be taken in drawing conclusions for other cities in China.

The new policy of including retail pharmacies in China's Urban Employee Basic Medical Insurance scheme played a positive role in improving the availability of medicines, benefiting members and attenuating the OOP burden, especially for retired members with higher medical demands. The previous large and unused deposited balance in UEBMI members, especially young employed worker, was transferred into SPA, which financed the expansion of the UEBMI outpatient scheme to retail pharmacies. The 2023 reforms did not trigger an increase in members’ medicine consumption; promoted access to medicines; attenuated the over-use of hospital pharmacies; and optimized outpatient health resource utilization. Attracting more customers by providing health services transformed pharmacies’ business model away from a singular focus on price competition.

UEBMI Urban Employee Basic Medical Insurance

MSAs Medical savings accounts

SPA Social pooling account

OOP Out-of-pocket

ITSA Interrupted time series analysis

Acknowledgements

Not applicable.

Author contributions

Xu Zhihao: Conceptualization; Investigation; Methodology; Data curation; Formal analysis; Visualization; Writing—Original draft preparation; Writing—Review and editing.

Stephen Nicholas: Writing—original draft; Writing—Review & editing.

Elizabeth Maitland: Writing—original draft; Writing—Review & editing.

Wang Jian: Conceptualization; Investigation; Methodology; Visualization.

Li Jie: Data curation; Validation.

Lv Shenghao: Data curation; Validation.

Tan Jialong: Conceptualization; Supervision; Coordination.

Funding

This research is funded by the Taikang Yicai Public Health Funding

Data availability

The datasets used and analyzed during the current study are available from the corresponding author on reasonable request.

Ethics approval and consent to participate

No individual was identified during the data collection. Therefore, ethical approval for this study was not required.

Consent for publication

Not applicable.

Competing interests

The authors declare no competing interests.

Vigilante KC. Culture and politics in healthcare reform. Reflections on solidarity, healthcare, and the welfare state. Pharmacoeconomics. 1996;10 Suppl 2:89-93.
Liu Y. Reforming China's urban health insurance system. Health Policy. 2002;60(2):133-150.
Ma J, Lu M, Quan H. From a national, centrally planned health system to a system based on the market: lessons from China. Health Aff (Millwood). 2008;27(4):937-948.
What can be learned from China's health system? [published correction appears in Lancet. 2012 Jun 2;379(9831):2052]. Lancet. 2012;379(9818):777.
Huang F, Gan L. The Impacts of China's Urban Employee Basic Medical Insurance on Healthcare Expenditures and Health Outcomes. Health Econ. 2017;26(2):149-163.
Yi H, Miller G, Zhang L, Li S, Rozelle S. Intended and unintended consequences of China's zero markup drug policy. Health Aff (Millwood). 2015;34(8):1391-1398.
Zheng XP, Zhu ML. A Study on the impact of Employees' Social Medical Insurance Accounts on Medical Service Consumption--Based on an Empirical Analysis of Provincial Panel Data from 2009 to 2017. Insurance Studies, 2019,(11):100-113.
Hao SY, Mao ZF. Singapore's Medisave Account System and Its Enlightenment to the Improvement of China's Employee Medical Insurance Personal Account. Chinese Health Economics. 2021,40(12):113-117.
Tao W, Zeng Z, Dang H, et al. Towards universal health coverage: lessons from 10 years of healthcare reform in China. BMJ Glob Health. 2020;5(3):e002086.
Xu ZH, Shi XY, Jiang LT, et al. The influencing factors and countermeasures of the implementation of the security policy of Hypertension and Diabetes' outpatient medication in Shenzhen: A qualitative study based on Grounded Theory. Chinese Journal of Health Policy. 2022,15(05):67-72.
National Health Commission of the People’s Republic of China. Statistical Bulletin of China's Health Development in 2019. Beijing: the Central People’s Government of China. https://www.gov.cn/guoqing/2021-04/09/content_5598657.htm.
Qin Y, Liu J, Li J, et al. How do moral hazard behaviors lead to the waste of medical insurance funds? An empirical study from China. Front Public Health. 2022;10:988492.
Zhu ML, Li T, Liu Y. A Study on the Operating Efficiency of Individual Account of the Social Healthcare Scheme for Urban Employees. Insurance Studies. 2018,(03):91-105.
The State Council. The Opinions on Deepening the Reform of the Healthcare Security System. Beijing: the Central People’s Government of China. https://www.gov.cn/zhengce/2020-03/05/content_5487407.htm. Accessed March 05, 2020
The State Council. the Guiding Opinions on Establishing and Improving the Urban Employee Basic Medical Insurance's Outpatient Co-payment Mechanism. Beijing: the Central People’s Government of China. https://www.gov.cn/zhengce/content/2021-04/22/content_5601280.htm. Accessed April 22, 2021
Wang L, Dai L, Liu H, Dai H, Li X, Ge W. Availability, affordability and price components of insulin products in different-level hospital pharmacies: Evidence from two cross-sectional surveys in Nanjing, China. PLoS One. 2021;16(8):e0255742.
National Healthcare Security Administration. Statistical Bulletin on the Development of National Medical Security Undertakings in 2022. Beijing: National Healthcare Security Administration. https://www.gov.cn/zhengce/content/2021-04/22/content_5601280.htm. Accessed July 10th, 2023
Wang Z. Why are some retail pharmacies at a loss for account reform[EB/OL]. (2021-06-08)[2024-04-13]. http://ie.cass.cn/scholars/opinions_essays_interviews/202106/t20210608_5339341.html
National Healthcare Security Administration. Notice on including designated retail pharmacies into the overall management of UEBMI’s outpatient scheme. Beijing: National Healthcare Security Administration. http://www.nhsa.gov.cn/art/2023/2/15/art_104_10166.html. Accessed February 15th, 2023
Loehrer AP, Chang DC, Hutter MM, et al. Health Insurance Expansion and Treatment of Pancreatic Cancer: Does Increased Access Lead to Improved Care?. J Am Coll Surg. 2015;221(6):1015-1022.
Nguyen CM, Nguyen MP, Luc LDP. How public health insurance expansion affects healthcare utilizations in middle and low-income households: an observational study from national cross-section surveys in Vietnam. BMC Public Health. 2023;23(1):624.
Stecker EC, Reinier K, Rusinaru C, Uy-Evanado A, Jui J, Chugh SS. Health Insurance Expansion and Incidence of Out-of-Hospital Cardiac Arrest: A Pilot Study in a US Metropolitan Community. J Am Heart Assoc. 2017;6(7):e005667.
Wang J. The impact of the improvement of the employee medical insurance pooling level on the patients' choice of medical institution. Chinese Journal of Health Policy. 2023,16(09):36-43.
Zhang XJ, Mu C, Tian MM, et al. Impact analysis of the implementation of outpatient service in medical insurance for urban workers-An example of B county in Jiangsu province. Health Economics Research. 2016,(02):9-12.
Zhu FM. Effect on Moral Hazard by Out-patient Reimbursement Policy of UEBMI: From the Perspective of Patients' Cost Sharing Change. Social Sciences of Beijing. 2021,(09):98-110.
Chen C, Liu GG, Wang T, Tan J. Ex-ante moral hazard and health insurance: Evidence from China's urban residence basic medical insurance scheme. Health Econ. 2023;32(11):2516-2534.
Dong D, Jiang WX, Long Q, et al. Impact of an innovative tuberculosis financing and payment model on health service utilization by tuberculosis patients in China: do the poor fare better than the rich?. Infect Dis Poverty. 2019;8(1):44.
Yan J, Shi Y, Zhang J, et al. Impact of capitation prepayment on the medical expenses and health service utilization of patients with coronary heart disease: a community policy intervention program in a county in China. BMC Public Health. 2023;23(1):2224.
Takahashi M. Insurance coverage, long-term care utilization, and health outcomes. Eur J Health Econ. 2023;24(8):1383-1397.
Wang YH, Xu W, Wang SM, et al. Introduction of Japanese Pharmacy Separation Reform Experience and the Enlightenment for China. Chinese Health Economics. 2019,38(08):93-96.
Greiner B, Zhang L, Tang C. Separation of prescription and treatment in health care markets: A laboratory experiment. Health Econ. 2017;26 Suppl 3:21-35.
Altare C, Kostandova N, OKeeffe J, et al. COVID-19 epidemiology and changes in health service utilization in Uganda's refugee settlements during the first year of the pandemic. BMC Public Health. 2022;22(1):1927.
Westgard CM, Rogers A, Bello G, Rivadeneyra N. Health service utilization, perspectives, and health-seeking behavior for maternal and child health services in the Amazon of Peru, a mixed-methods study. Int J Equity Health. 2019;18(1):155.
Shi H, Cheng Z, Liu Z, Zhang Y, Zhang P. Does a new case-based payment system promote the construction of the ordered health delivery system? Evidence from a pilot city in China. Int J Equity Health. 2024;23(1):55.
Saramunee K, Krska J, Mackridge A, Richards J, Suttajit S, Phillips-Howard P. General public's views on pharmacy public health services: current situation and opportunities in the future. Public Health. 2015;129(6):705-715.
Diao Y, Lin M, Xu K, et al. How government health insurance coverage of novel anti-cancer medicines benefited patients in China - a retrospective analysis of hospital clinical data. BMC Health Serv Res. 2021;21(1):856.
Diao Y, Qian J, Liu Y, et al. How government insurance coverage changed the utilization and affordability of expensive targeted anti-cancer medicines in China: an interrupted time-series study. J Glob Health. 2019;9(2):020702.
Fang W, Xu X, Zhu Y, Dai H, Shang L, Li X. Impact of the National Health Insurance Coverage Policy on the Utilisation and Accessibility of Innovative Anti-cancer Medicines in China: An Interrupted Time-Series Study. Front Public Health. 2021;9:714127.
Hu WC, Yang YT, Zuo GY. An inter-provincial comparative study on the inclusion of retail pharmacies into outpatient pooling policies in China. Chinese Journal of Health Policy, 2023,16(10):56-63.
Frank RG. Government commitment and regulation of prescription drugs. Health Aff (Millwood). 2003;22(3):46-48.
Tian HG, Liu XC, Wang WX, et al. Research on the guiding effect of differentiated reimbursement policy onpatients' medical behavior. Chinese Hospitals. 2022,26(06):10-12.
Li YY, Pan XX, Wu SX. Problems and Strategies of "Mutual Assistance Between Family Members" Policy in Medical Insurance System. Health Economics Research. 2022,39(02):19-22.

No competing interests reported.

Impact on members and retail pharmacies of China's Urban Employee Basic Medical Insurance medicine purchasing reforms: Case studies in Wuhan

Status:

Version 1

Abstract

Background

Methods

Results

Conclusions

Figures

Introduction

Methods

Data

Statistical analysis

Results

Customer characteristics

Medicine purchasing behavior

Discussion

Limitations

Conclusions

Abbreviations

Declarations

References

Additional Declarations

Status:

Version 1