The Effects of Primary Care Chronic-Disease Management in Rural China

Health systems globally face increasing morbidity and mortality from chronic disease, yet many--especially in low- and middle-income countries--lack strong primary care. We analyze China's efforts to promote primary care management for insured rural Chinese with chronic disease, analyzing unique panel data for over 70,000 rural Chinese 2011-2015. Our study design uses variation in management intensity generated by administrative and geographic boundaries--regression analyses based on 14 pairs of villages within two kilometers of each other but managed by different townships. Utilizing this plausibly exogenous variation, we find that patients residing in a village within a township with more intensive primary care management, compared to neighbors with less intensive management, had more primary care visits, fewer specialist visits, fewer hospital admissions, and lower inpatient spending. No such effects are evident in a placebo treatment year. Exploring the mechanism, we find that patients with more intensive primary care management exhibited better drug adherence as measured by filled prescriptions. A back-of-the-envelope estimate of welfare suggests that the resource savings from avoided inpatient admissions substantially outweigh the costs of the program