ABSTRACT
First and foremost, social insurance is not the silver bullet for China’s health care reform. Financial protection will continue to be limited if the rapid escalation of health care costs remains unharnessed. A major elevation of benefit standards is also needed in order to better shield the insured population against catastrophic medical spending. However, the fragmentation of insurance and limited managerial capacity have not enabled social health insurance to fully unleash its potential. The creation of a capable and prudent third-party purchaser is of strategic importance in the system’s march towards strategic purchasing (Xu and Van Deven 2009, Yip and Hsiao 2009b).
