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.

We examine the role that buyers in global supply chains play in helping vendors uncover productivity-enhancing labor management innovations. We report on a buyer-directed NGO-coordinated factory-based program targeting intestinal parasites and anemia in seven Bangalore apparel factories. Raw pre-post productivity comparisons were confounded by factory organizational changes that were implemented in anticipation of the termination of the Multi Fiber Arrangement (MFA). Using a difference-in-difference-in-difference (DDD) estimator, a full complement of medically appropriate treatment was found to increase individual productivity.

Using data from 276 general acute hospitals in the Pearl River Delta region of Guangdong Province from 2002 and 2004, we construct a preliminary metric of budget constraint softness. We find that, controlling for hospital size, ownership, and other factors, a Chinese hospital’s probability of receiving government financial support is inversely associated with the hospital’s previous net revenue, an association consistent with soft budget constraints.

Published inInternational Journal of Healthcare Finance and Economics special issue on provider payment incentivesKaren Eggleston, Yu-Chu Shen, Mingshan Lu, Congdong Li, Jian Wang, Zhe Yang, 2009. “Soft Budget Constraints in China: Evidence from the Guangdong Hospital Industry,” International Journal of Healthcare Finance and Economics 9(2): 233-42.

Government and private roles in health service delivery remain controversial in China, as in many countries.  Using 2004 data from over 360 government-owned and private hospitals in Guangdong Province, we find that non-government hospitals serve an overlapping but distinct market.  They are smaller, newer market entrants, more likely to specialize, and less likely to be included in urban social insurance networks. We also document differences in staffing and financial performance, but no systematic ownership differences in simple measures of quality, controlling for size, location, case-mix and other confounding factors.

UPDATED VERSION PUBLISHED:
BMC Health Services Research 2010, 10:76doi:10.1186/1472-6963-10-76
http://www.biomedcentral.com/1472-6963/10/76

Background

The literature comparing private not-for-profit, for-profit, and government providers mostly relies on empirical evidence from high-income and established market economies. Studies from developing and transitional economies remain scarce, especially regarding patient case-mix and quality of care in public and private hospitals, even though countries such as China have expanded a mixed-ownership approach to service delivery. The purpose of this study is to compare the operations and performance of public and private hospitals in Guangdong Province, China, focusing on differences in patient case-mix and quality of care.

Methods

We analyze survey data collected from 362 government-owned and private hospitals in Guangdong Province in 2005, combining mandatorily reported administrative data with a survey instrument designed for this study. We use univariate and multi-variate regression analyses to compare hospital characteristics and to identify factors associated with simple measures of structural quality and patient outcomes.

Results

Compared to private hospitals, government hospitals have a higher average value of total assets, more pieces of expensive medical equipment, more employees, and more physicians (controlling for hospital beds, urban location, insurance network, and university affiliation). Government and for-profit private hospitals do not statistically differ in total staffing, although for-profits have proportionally more support staff and fewer medical professionals. Mortality rates for non-government non-profit and for-profit hospitals do not statistically differ from those of government hospitals of similar size, accreditation level, and patient mix.

Conclusions

In combination with other evidence on health service delivery in China, our results suggest that changes in ownership type alone are unlikely to dramatically improve or harm overall quality. System incentives need to be designed to reward desired hospital performance and protect vulnerable patients, regardless of hospital ownership type.

Published: Eggleston, Karen, et al. "Comparing public and private hospitals in China: evidence from Guangdong." BMC Health Services Research 10.1 (2010): 1.

When both physicians and pharmacists in Taiwan prescribed and dispensed drugs, many elderly people considered the two types of health care providers more or less synonymous (i.e., close substitutes). Two policies mandated in the 1990s changed this perception: National Health Insurance (NHI), which provides insurance coverage to all citizens, and a separation policy (SP) that forbids physicians from dispensing and pharmacists from prescribing drugs. The author finds that by providing an economic incentive to the previously uninsured elderly, NHI raised the probability that they would visit physicians, relative to their continuously insured counterparts. In particular, some previously uninsured elderly who once only visited pharmacists were more likely to also visit physicians after NHI was implemented. Following this, the SP made it more likely that all elderly patients would only visit physicians and buy drugs from on-site pharmacists hired by physicians—a result different than its policy goal.

Published: Chang, Kang-Hung. "The healer or the druggist: effects of two health care policies in Taiwan on elderly patients’ choice between physician and pharmacist services." International journal of health care finance and economics 9.2 (2009): 137-152.

The principal-agent problem in health care asserts that providers, being imperfect agents for patients, will act to maximize their profits at the expense of the patients’ interests. This problem applies especially where professional regulations are lacking and incentives exist to directly link providers’ actions to their profits, such as a fee-for-service payment system. The current analysis tests for the existence of the principal-agent problem in the private health market in Vietnam by examining the prescribing patterns of the private providers. We show that

1. private providers were able to induce demand by prescribing more drugs than public providers for a similar illness and patient profile;
   
2. private providers were significantly more likely to prescribe injection drugs to gain trust among the patients; and
   
3. patients’ education as a source of information and empowerment has enabled them to mitigate the demand inducement by the providers.
   

Our hypotheses were supported with evidence from Vietnam National Health Survey 2001 and 2002, the first and, so far, only comprehensive health survey in the country.

Aims The prevalence of Type 2 diabetes mellitus (DM) has grown rapidly, but little is known about the drivers of inpatient spending in low- and middle-income countries. This study aims to compare the clinical presentation and expenditure on hospital admission for inpatients with a primary diagnosis of Type 2 DM in India, China, Thailand and Malaysia.

Methods We analysed data on adult, Type 2 DM patients admitted between 2005 and 2008 to five tertiary hospitals in the four countries, reporting expenditures relative to income per capita in 2007.

Results Hospital admission spending for diabetic inpatients with no complications ranged from 11 to 75% of per-capita income. Spending for patients with complications ranged from 6% to over 300% more than spending for patients without complications treated at the same hospital. Glycated haemoglobin was significantly higher for the uninsured patients, compared with insured patients, in India (8.6 vs. 8.1%), Hangzhou, China (9.0 vs. 8.1%), and Shandong, China (10.9 vs. 9.9%). When the hospital admission expenditures of the insured and uninsured patients were statistically different in India and China, the uninsured always spent less than the insured patients.

Conclusions With the rising prevalence of DM, households and health systems in these countries will face greater economic burdens. The returns to investment in preventing diabetic complications appear substantial. Countries with large out-of-pocket financing burdens such as India and China are associated with the widest gaps in resource use between insured and uninsured patients. This probably reflects both overuse by the insured and underuse by the uninsured.