**_related out-of-pocket payments have been, on average, higher for the poor not only in relative, but also in absolute terms_** .  For those undertaking hospitalization, the average cost was over RMB8,000 (of which 61% is paid out of pocket) in the poorest quintile, and about RMB7,200 (of which 45% was paid out of pocket) in the richest quintile.  The difference may reflect the possibility that the poorer citizens (partly because of being more likely to be uninsured) wait until their medical condition becomes more serious before they seek care, hence treatment is more costly.<sup>9</sup> Across the five cities, out-of-pocket payments paid as a share of medical bills by the poorest quintile ranged from 54% in Dalian to 69% in Shenzhen for inpatient care, and from 50% in Shanghai to 87% in Dalian (see Figure 16).

**_The survey illustrates that the cost of hospitalization has been very high in absolute terms in China compared to countries at a similar level of development, and that the related financial burden on the poor is truly excessive_** . Other studies have documented this issue in the rural areas.<sup>10</sup> This study shows that high out-of-pocket payments have created a major burden for the poor also in urban areas.

# **Inequality in utilization and quality of services**

**_While the registered urban poor and migrants have spent relatively a much larger share of household income on public services, the survey suggested that, compared to the richer population groups, they have benefited less in terms of public service utilization and quality_** .  Moreover, a wide disparity in the quality of services has also existed in terms of hierarchy and geography within cities.  In both education and health systems, there has been a clear hierarchy among service providers.  Provincial key schools and provincial hospitals have had the highest rank, best professionals and facilities.  Municipal key schools and municipal hospitals have come second, and district key schools and district hospitals third. Below all the key schools and hospitals have fallen ordinary schools and community health centers.  At the bottom with respect to quality have been the private migrant schools and small private clinics.

**_In education, registered urban residents, and particularly higher income groups, have reported a better access to the key schools_** .  As shown in Figure 17, provincial key schools provided schooling to 28% of children from the richest quintile but only 11% from the poorest quintile, and only 8% of migrant children (compared to 16% of registered urban resident children)

**Figure 17 Type of school attended by income group** (% of children enrolled in a given type of school), **2006**

<!-- Start of picture text --> 50%<br>45% Richest Quintile Poorest Quintile<br>40%<br>35%<br>30%<br>25%<br>20%<br>15%<br>10%<br>5%<br>0%<br>Provincial key City key school District key school Ordinary school<br>school<br><!-- End of picture text -->

> 9  The information about the cost of inpatient and outpatient care, as it is collected in household survey, may suffer from the fact that those insured are less aware of the cost than those uninsured.

> 10  See, among others, Xin Ying et al and Herry Lucas (2007), “The Ability to Pay for Healthcare in Rural China” in _China Health Economics_ [Vol. 9 2007] For data, see China National Health Services Survey results published every five years by Ministry of Health.

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