"The Role of the Private Sector in Health" was the topic of a full day symposium held July 11th at the Beijing International Convention Center. Convened one day before the World Congress of the International Health Economics Association, the private sector symposium attracted over a hundred participants from nations around the world. Aiming to foster dialogue between researchers interested in the private sector and policymakers, the event is one in a series with the long-term goal of promoting greater research interest and knowledge generation regarding the private sector to benefit health systems development. The program featured several scientific paper presentations and panels as well as keynote addresses by representatives from the Chinese Ministry of Health and the World Bank.

Karen Eggleston of the Asia Health Policy Program worked alongside several others on the organizing committee for this ongoing collaboration about the role of the private sector in health policy. Other committee members included Ruth Berg, PSP ONE, Abt Associates; Peter Berman, World Bank; Birger Forsberg, Karolinska Institutet; Gina Lagomarsino, Results for Development; Qingyue Meng, Shandong University; Dominic Montagu, University of California, San Francisco; Sara Bennett, Alliance for Health Systems and Policy Research; and Stefan Nachuk, Rockefeller Foundation.

Selected papers about the private health sector in Asia presented at the symposium will appear in the Asia Health Policy Program's working paper series on health and demographic change in the Asia-Pacific.

The Director of the Asia Health Policy Program, Karen Eggleston, served as guest editor of the International Journal of Healthcare Finance and Economics for the June 2009 issue. The eight papers of that issue evaluate different provider payment methods in comparative international perspective, with authors from Hungary, China, Thailand, the US, Switzerland, and Canada. These contributions illustrate how the array of incentives facing providers shapes their interpersonal, clinical, administrative, and investment decisions in ways that profoundly impact the performance of health care systems.

The collection leads off with a study by János Kornai, one of the most prominent scholars of socialism and post-socialist transition, and the originator of the concept of the soft budget constraint. Kornai’s paper examines the political economy of why soft budget constraints appear to be especially prevalent among health care providers, compared to other sectors of the economy.

Two other papers in the issue take up the challenge of empirically identifying the extent of soft budget constraints among hospitals and their impact on safety net services, quality of care, and efficiency, in the United States (Shen and Eggleston) and – even more preliminarily – in China (Eggleston and colleagues, AHPP working paper #8).

The impact of adopting National Health Insurance (NHI) and policies separating prescribing from dispensing are the subject of Kang-Hung Chang’s article entitled “The healer or the druggist: Effects of two health care policies in Taiwan on elderly patients’ choice between physician and pharmacist services” (AHPP working paper #5).

In “Does your health care depend on how your insurer pays providers? Variation in utilization and outcomes in Thailand” (AHPP working paper #4), Sanita Hirunrassamee of Chulalongkorn University and Sauwakon Ratanawijitrasin of Mahidol University study the impact of multiple provider payment methods in Thailand, providing striking evidence consistent with standard predictions of how payment incentives shape provider behavior. For example, patients whose insurers paid on a capitated or case basis (the 30 Baht and social security schemes) were less likely to receive new drugs than those for whom the insurer paid on a fee-for-service basis (civil servants). Patients with lung cancer were less likely to receive an MRI or a CT scan if payment involved supply-side cost sharing, compared to otherwise similar patients under fee-for-service. (This article is open access.)

The fourth paper in this special issue is entitled “Allocation of control rights and cooperation efficiency in public-private partnerships: Theory and evidence from the Chinese pharmaceutical industry” (AHPP working paper #6). Zhe Zhang and her colleagues use a survey of 140 pharmaceutical firms in China to explore the relationships between firms’ control rights within public-private partnerships and the firms’ investments.

Hai Fang, Hong Liu, and John A. Rizzo delve into another question of health service delivery design and accompanying supply-side incentives: requiring primary physician gatekeepers to monitor patient access to specialty care (AHPP working paper #2).

Direct comparisons of payment incentives in two or more countries are rare. In “An economic analysis of payment for health care services: The United States and Switzerland compared,” Peter Zweifel and Ming Tai-Seale compare the nationwide uniform fee schedule for ambulatory medical services in Switzerland with the resource-based relative value scale in the United States.

Several of the papers featured in this special issue were presented at the conference “Provider Payment Incentives in the Asia-Pacific” convened November 7-8, 2008 at the China Center for Economic Research (CCER) at Peking University in Beijing. That conference was sponsored by the Asia Health Policy Program of the Shorenstein Asia-Pacific Research Center at Stanford University and CCER, with organizing team members from Stanford University, Peking University, and Seoul National University.

As Eggleston notes in the guest editorial to the special issue, AHPP and the other scholars associated with the issue “hope that these papers will contribute to more intellectual effort on how provider payment reforms, carefully designed and rigorously evaluated, can improve ‘value for money’ in health care.”

The Asia Health Policy Program at the Walter H. Shorenstein Asia-Pacific Research Center is pleased to announce that Brian K. Chen has been awarded the %fellowship1% for 2009-2010.  Brian is currently completing his Ph.D. in Business Administration in the Business and Public Policy Group at the Haas School of Business, University of California at Berkeley.  He received a Juris Doctor from Stanford Law School in 1997, and graduated summa cum laude from Harvard College in 1992. 

As an applied economist, Brian’s research focuses on the impact of incentives in health care organizations on provider and patient behavior.  For his dissertation, Brian empirically examined how vertical integration and prohibition against self-referrals affected physician prescribing behavior.  His job market paper has been selected for presentation at the American Law and Economics Association’s Annual Meeting in 2009.

Brian comes to the Shorenstein Asia-Pacific Research Center not only with a multidisciplinary law and economics background, but also with an international perspective from having lived and worked in Taiwan, Japan, and France.  He has a particularly intimate knowledge of the Taiwanese health care system from his experience as an assistant to the hospital administrator at a medical college in Taiwan.

During his residence as a postdoctoral fellow with the Asia Health Policy Program, Brian plans to conduct empirical research on cost containment policies in Taiwan and Japan and how those policies impacted provider behavior. His work will also contribute to the program’s research activities on comparative health systems and health service delivery in the Asia-Pacific, a theme that encompasses the historical evolution of health policies; the role of the private sector and public-private partnerships; payment incentives and their impact on patients and providers; organizational innovation, contracting, and soft budget constraints; and chronic disease management and service coordination for aging populations.