Does Provincial Pooling of the Resident Medical Insurance Fund Improve the Efficiency of Medical Resource Allocation of China?

Background

Provincial pooling of the Urban-Rural Resident Basic Medical Insurance (URRBMI) fund has been promoted in China to reduce fragmentation and improve system performance, yet its impact on the efficiency of medical resource allocation remains unclear.

Objective

To evaluate the impact of provincial pooling on medical resource allocation efficiency and to examine its heterogeneity across regions and institutional arrangements.

Methods

Using provincial panel data from 2010 to 2022, this study measures efficiency with a super-efficiency slack-based measure (SBM) model and applies a staggered difference-in-differences (DID) design to estimate policy effects.

Results

Provincial pooling is associated with a statistically significant reduction in medical resource allocation efficiency among adopting provinces. In baseline specifications, the estimated effect ranges from -0.021 to -0.024 (p < 0.01), corresponding to a decline of 0.021-0.024 points in the efficiency score, equivalent to about 2.4-2.7% of the sample mean efficiency level. Heterogeneity analysis suggests that the negative effect is concentrated in western provinces, whereas no statistically significant effect is observed in eastern provinces. No treatment effect is estimated for central provinces because none implemented provincial pooling during the study period. Institutional heterogeneity analysis shows negative estimates across pooling and management models, but the revenue-expenditure pooling estimate is not statistically significant. These results are robust across alternative specifications and sensitivity analyses.

Conclusions

These findings suggest that, among adopting provinces, provincial pooling may involve substantial transitional adjustment costs, implying that efficiency gains should not be expected automatically in the short to medium term. Instead, outcomes depend on institutional conditions and the alignment of complementary governance mechanisms. Policymakers should adopt regionally differentiated and phased strategies and strengthen incentive-compatible design to improve reform effectiveness.