From expansion to optimization: Government health expenditure and chronic disease burden among older adults in China.

Population ageing and rising chronic diseases have coincided with rapid growth in public health spending in China, but health returns may depend on spending composition. This study evaluates associations of spending scale and the demand-side share of government health expenditure with older adults' chronic disease burden. Data come from six waves (2002-2018) of the Chinese Longitudinal Healthy Longevity Survey, pooled as repeated cross-sections of adults aged 65 years and older (79,103 person-wave observations) and linked to one-year-lagged national spending indicators. Outcomes included chronic disease counts and limitation severity for instrumental activities of daily living (IADL; higher-order daily tasks) and activities of daily living (ADL; basic self-care). Results of mixed-effect count models imply that higher health spending as a share of gross domestic product was associated with higher recorded chronic disease counts and more IADL limitations. In contrast, a higher demand-side share was associated with fewer IADL limitations, while associations with chronic disease counts and ADL disability were weaker. Mediation analyses suggested that demand-side allocation related to better function mainly through deeper financial protection (insurance as the primary payer of recent medical costs) and timely access to care; insurance enrollment alone was more consistent with increased detection of chronic diseases. These findings underscore the policy relevance of shifting toward demand-side financing that improves effective coverage and continuity of care, particularly for earlier, more modifiable functional decline.