China continues to face great challenges in meeting the health needs of its large population. The challenges are not just lack of resources, but also how to use existing resources more efficiently, more effectively, and more equitably. Now a major unaddressed challenge facing China is how to reform an inefficient, poorly organized health care delivery system. The objective of this study is to analyze the role of private health care provision in China and discuss the implications of increasing private-sector development for improving health system performance.

This study is based on an extensive literature review, the purpose of which was to identify, summarize, and evaluate ideas and information on private health care provision in China. In addition, the study uses secondary data analysis and the results of previous study by the authors to highlight the current situation of private health care provision in one province of China.

This study found that government-owned hospitals form the backbone of the health care system and also account for most health care service provision. However, even though the public health care system is constantly trying to adapt to population needs and improve its performance, there are many problems in the system, such as limited access, low efficiency, poor quality, cost inflation, and low patient satisfaction. Currently, private hospitals are relatively rare, and private health care as an important component of the health care system in China has received little policy attention. It is argued that policymakers in China should recognize the role of private health care provision for health system performance, and then define and achieve an appropriate role for private health care provision in helping to respond to the many challenges facing the health system in present-day China.