The heterogeneous relationship between public health expenditures and household medical expenditures: evidence from relative poverty households in China

Exploring the heterogeneous relationship between public health expenditures and household medical expenditures from the perspective of relative poverty has positive significance for improving the ability of relative poverty households to cope with the risk of large rigid expenditures and optimizing the public health resource allocation. This paper uses the China Family Panel Studies (CFPS) from 2016 to 2020 to identify relative poverty standard from the perspective of medical needs, analyzes the impact of public health expenditures on medical expenditures of different household types, and evaluates the effect of public health expenditures on ensuring the medical needs of relative poverty households. The panel threshold regression result shows that 19.36% of the provinces per capita disposable where the household is located is the identification standard of relative poverty households. Public health expenditures have a crowding-in effect on household medical expenditures and have a stronger impact on relative poverty households, an effect that is also confirmed by two-stage least squares regression. In addition, ensuring household medical needs through public health expenditures focuses on the level of basic medical needs, and the role of household healthcare expenditures that reflects high-level medical needs is not obvious. In the future, the government should establish a monitoring mechanism for relative poverty households, ensure the basic medical needs of relative poverty households, and clarify the heterogeneity among different types of households, provide targeted public health services.