Tail convergence in insurance financial protection: multi-layer performance among hospitalised NCD patients in Southwest China

Abstract

Introduction China’s multi-layer health insurance system provides financial protection through basic insurance (Urban Employee Basic Medical Insurance [UEBMI] and Urban-Rural Resident Basic Medical Insurance [URRBMI]), catastrophic supplemental coverage, and medical assistance. URRBMI enrollees face higher inadequate-protection rates than UEBMI enrollees, but evidence relies on survey and mean-based statistics that obscure distributional variation.Theory We measured financial protection using the out-of-pocket (OOP) ratio, since administrative claims lack household income data needed for traditional catastrophic health expenditure measures. We hypothesised that shared reimbursement ceilings produce ‘tail convergence’, narrowing protection gaps among highest-cost patients, undetectable by mean-based analyses.Method We analysed 31,416 non-communicable disease (NCD) inpatient episodes from a tertiary hospital in Southwest China (2023–2025), covering circulatory, respiratory, neoplastic, and endocrine disorders. Inadequate protection was defined as OOP ratio >40%. We used patient-clustered logistic and quantile regression.Results Overall, 25.6% of admissions experienced inadequate protection (URRBMI 27.0% vs. UEBMI 14.8%; adjusted OR 2.47, 95% CI 2.24–2.72; 2.60 with cost and length of stay additionally adjusted). Quantile regression revealed tail convergence: the insurance gap was 12.3 percentage points at the median but converged to zero at the 90th percentile, as both schemes reached the reimbursement ceiling. Medical assistance beneficiaries had the lowest median OOP ratio (21.2%).Discussion In this single-centre cohort of hospitalised NCD patients in southwest China, tail convergence likely reflects exhaustion of basic-scheme reimbursement ceilings, not the province’s catastrophic-insurance ceiling. Enhanced benefit design and progressive cost-sharing may address this exposure. Medical assistance is effective but under-reaching; findings require multi-site confirmation.