The New Rural Cooperative Medi-cal System ( hereafter NRCMS) in Tibetan areas of Sichuan was started in Wenchuan in 2005 , and by 2008 covered all of the province’s Tibetan areas. This paper studies the effects of the NRCMS on im-proving the health of and alleviating poverty for farmers and herdsmen in Tibetan area of Sichuan. Most parts of the Tibetan areas of Sichuan are located in high altitude districts. Thirty two coun-ties of these areas are classified as “National Pov-erty Counties”. Poverty and disease go hand in hand in these regions. Kashin-Beck disease and hydatid disease are the major endemics in the pas-toral and agro-pastoral areas of Sichuan. Endemic, infectious and chronic diseases are widespread in Sichuan’s Tibetan areas. More than 70% of pa-tients are workers from 20 to 60 years old. Disea-ses are more prevalent in women than in men. Kashin-Beck disease and hydatid disease are cur-rently incurable. Patients suffer from health prob-lems, which leads to a decrease in their income and the heavy burden of medical expenses. The new rural cooperative medical system alleviates the negative effects of farmers’ falling into, or back in-to poverty due to disease. However, the existing medical compensation mechanism is not sufficient to solve the problem. The greatest impact of NRCMS on the farmers and herdsmen in Sichuan’s Tibetan areas is that the system has gradually changed local people’s medi-cal behavior, as well as their underlying ideas a-bout medicine: they begin to believe in hospitals. In particular, more pregnant women are choosing to give birth in hospitals, which reduces the rate of infant mortality and postpartum diseases, and im-proves the health of women. Since the full coverage of the NRCMS in 2008 , the number of people participating in the system has reached the overall average level of Si-chuan province. By analyzing the data before and after the implementation of this system, and meas-uring the impact of the system on people’s health, it can be found that the NRCMS’s role in serving the vulnerable population, such as the elderly and infant children, is more marked. Since the implementation of the NRCMS, all administrative villages in Sichuan Tibetan areas have established village clinics, which solved the problem of a shortage of medicines and doctors in those areas. Farmers and herdsmen have conven-ient access to medical treatment, enhancing the ac-cessibility of medical service. After the implemen-tation of the NRCMS, the health of the elderly population in rural areas has improved. Infant mor-tality rates have dramatically fallen. The implementation of the NRCMS improved the medical service capacity of township hospitals and village clinics. And the NRCMS has brought the township hospitals and village clinics into its scope of compensation, which greatly promotes the utilization of primary medical services in Tibetan areas. The poverty reduction effect of the NRCMS can be analyzed from two aspects:Firstly, the im-
provement in health leads to increased income, be-cause good health can promote labor productivity. Meanwhile, the increase in income will in turn im-prove the overall level of health. Secondly, the in-patient and outpatient compensation rate is raised year by year, which reduces the medical fees of farmers, and prevents them from falling back into poverty.