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Background  System of Health Accounts 2011 (SHA 2011) is a new health care accounts system, revised from SHA 1.0 by the Organisation for Economic Co-operation and Development (OECD), the World Health Organization (WHO) and Eurostat. It keeps the former tri-axial relationship and develops three analytical interfaces, in order to fix the existing shortcomings and make it more convenient for analysis and comparison across countries. SHA 2011 was introduced in China in 2014, and little about its application in China has been reported. This study takes children as an example to study how to apply SHA 2011 at the subnational level in the practical situation of China’s health system.    Methods  Multistage random sampling method was applied and 3 532 517 samples from 252 institutions were included in the study. Official yearbooks and account reports helped the estimation of provincial data. The formula to calculate Current Health Expenditure (CHE) was introduced step-by-step. STATA 10.0 was used for statistics.    Results  Under the frame of SHA 2011, the CHE for children in Liaoning was calculated as US$ 0.74 billion in 2014; 98.56% of the expenditure was spent in hospital and the allocation to primary health care institutions was insufficient. Infection, maternal and prenatal diseases cost the most in terms of Global Burden of Disease (GBD), and respiratory system diseases took the leading place in terms of International Classification of Disease Tenth Revision (ICD-10). In addition, medical income contributed most to the health financing.    Conclusions  The method to apply SHA 2011 at the subnational level is feasible in China. It makes health accounts more adaptable to rapidly developing health systems and makes the financing data more readily available for analytical use. SHA 2011 is a better health expenditure accounts system to reveal the actual burden on residents and deserves further promotion in China as well as around the world.

How to apply SHA 2011 at a subnational level in China’s practical situation: take children health expenditure as an example