Health care institutions
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In the four years since a State Council think tank, the Development Research Center, bluntly declared the failure of three decades of healthcare reform, China has placed a high political priority on designing, building and financing a modern, equitable health delivery system that serves every last one of its 1.3 billion people. As publisher of practice-building trade magazines for medical specialists in China and India, Jeffrey Parker has developed unique and valuable perspectives on what's wrong with China's healthcare system -- and how Indian practitioners are able to deliver results despite a per-capita GDP that is roughly half of China's. Through an unprecedented China-India training exchange, Mr. Parker has begun testing whether Indian models of self-financed grassroots medical startup practices can help doctors shake free of China’s Stalinist paralysis without having to wait for sweeping programmatic reforms that are always on the horizon, but seem never to come. What's more, would such grassroots empowerment models not create unprecedented opportunities for participation by international investors who up to now have been largely marginalized in China's healthcare development?

In this lunchtime colloquium, Mr. Parker reviews his experiences in China and India over the past six years and looks at several exciting recent developments in China. These include:

  • An ambitious rural reimbursement scheme that already has begun to complete a nationwide healthcare safety net. The program is creating a vast pool of funds to finance rural medical services, but how will Beijing populate the countryside with sustainable grassroots practices?
  • The first domestic healthcare IPO, by which Aier Ophthalmology raised some $50 million as one of 28 debut listings in the Shenzhen's new "ChiNext" Growth Enterprise Market. New wind in the sails of healthcare privatization?
  • Licensing reforms that have begun delinking doctors' certification from their "work unit" hospitals under trials in Beijing and Yunnan, removing a vexing obstacle to hands-on surgical training of young practitioners. Will the breaking of senior doctors' "skills monopoly" create opportunities for private-sector training programs that will shake up China's Soviet-style residency programs?

Jeffrey Parker has lived in Greater China since 1990, first as a journalist and since 2003 as a publisher. His transition from chronicler of China's historic rise to active proponent of its economic development gives him a unique perspective on the opportunities still opening up in China -- and the challenges facing anyone keen to participate. With a twin B.A. in Asian Studies and Geography from U.C. Santa Barbara and Masters training in Journalism from Columbia University, Parker trimmed his sails for a China career from an early age. After early editorial jobs in New York and Washington, D.C., he was dispatched to Beijing by United Press International as senior correspondent in 1990. During the next 10 years with UPI and then Reuters, he covered a wide range of political, economic and social stories from postings in Hong Kong, Taiwan and the Peoples Republic. In his final two years at Reuters, Parker got his first taste of media development, launching local-language multimedia news and video feeds in China, Japan, Korea, India and Southeast Asia. Since 2003, Parker has built up a family of world-class doctors' magazines serving more than 50,000 specialists in China and India from the Shanghai base of ILX Media Group, where he is editorial director, chief operating officer, a corporate director and investor. Among his objectives is to help foster a badly needed transformation of medical practice across China by inspiring grassroots doctors to deliver high-quality, cost-effective services in rural and less-developed communities left behind by government health care.

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Jeffrey Parker Speaker ILX Media Group, Shanghai, PRC
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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.

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Diabetic Medicine
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Jeremy Goldhaber-Fiebert
Ratanawijitrasin S
Vidyasagar S
Wang XY
Aljunid S Aljunid S
Shah N Shah N
Wang Z
Hirunrassamee S
Bairy KL
Wang J
Saperi S
Nur AM
Karen Eggleston
Karen Eggleston
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AHPP sponsors special journal issue on health service provider incentives

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.”

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Hospitals in Thailand operate in a multiple insurance payment environment. This paper examines 1) access to medicines and other medical technologies, 2) treatment outcomes, and 3) efficiency in resource use, among beneficiaries of the three government health insurance schemes in Thailand. Using 2003-2005 inpatient data for patients with three tracer diseases from three government hospitals, we find that utilization of more expensive items differs between patients whose insurers pay on a closed- or open-ended basis. Where new vs. conventional drugs are both available, patients whose insurer pays on a fee-for-service basis tend to have greater access to new drugs, compared to patients whose insurer pays on a capitated or case basis. Similar patterns were found where there are options between originator vs. generic drugs, drugs in different dosage forms, and more vs. less advanced diagnostic technologies. Effects of insurance payment are more pronounced where price gaps among the medical technologies are significant. Efficiency results are mixed, depending on nature of the disease conditions and type of resources required for treatment.

Published: Hirunrassamee, Sanita, and Sauwakon Ratanawijitrasin. "Does your health care depend on how your insurer pays providers? Variation in utilization and outcomes in Thailand." International journal of health care finance and economics 9.2 (2009): 153-168.

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Asia Health Policy Program working paper #4
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Sanita Hirunrassamee
Sauwakon Ratanawijitrasin
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This systematic review examines what factors explain the diversity of findings regarding hospital ownership and quality. We identified 31 observational studies written in English since 1990 that used multivariate analysis to examine quality of care at nonfederal general acute, short-stay US hospitals. We find that pooled estimates of ownership effects are sensitive to the subset of studies included and the extent of overlap among hospitals analyzed in the underlying studies. Ownership does appear to be systematically related to differences in quality among hospitals in several contexts. Whether studies find for-profit and government-controlled hospitals to have higher mortality rates or rates of adverse events than their nonprofit counterparts depends on data sources, time period, and region covered. Policymakers should be aware of the underlying reasons for conflicting evidence in this literature, and the strengths and weaknesses of meta-analytic synthesis. The "true" effect of ownership appears to depend on institutional context, including differences across regions, markets, and over time.

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Health Economics
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Karen Eggleston
Karen Eggleston
Yu-Chu Shen
Joseph Lau
Christopher H. Schmid
Jia Chan
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Karen Eggleston
Karen Eggleston
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Clear evidence suggests the importance of health service provider payment incentives for achieving efficiency, equal access, and quality, including attention to primary, secondary, and tertiary prevention. “Pay for performance” may be on the cusp of significant expansion in Asia, and reform away from fee-for-service has been underway for several years in several economies. Yet despite the policy relevance, the evidence base for evaluating payment reforms in Asia is still very limited.

China in particular has been undertaking significant reforms to its health care system in both rural and urban areas. With the expansion of insurance coverage and need to resolve incentive problems like “supporting medical care through drug sales,” there is an urgent need for evaluating alternative ways of paying health service providers. Evidence from policy reforms in specific regions of China, as well as other economies of the Asia-Pacific, can provide valuable evidence to help inform policy decisions about how to align provider incentives with policy goals of quality care at reasonable cost.

To illuminate these questions, the Asia Health Policy Program and several collaborating institutions are planning to convene a conference on health care provider payment incentives on November 7-8, 2008 in Beijing. The conference will highlight and seek to distill “best-practice” lessons from rigorous and policy-relevant evaluations of recent reforms in China and elsewhere in the Asia Pacific.

The organizing committee – including health economists from Shorenstein APARC, Peking University, Tsinghua University, and Seoul National University – reviewed submissions in June 2008 and accepted sixteen. The conference papers cover payment issues in Korea, Japan, China, Taiwan, Thailand, Tajikistan, the Philippines, and the US, and the disciplines of economics, health services research/health policy, public health, medicine, and ethics. Topics include institutionalized informal payments; the impact of global budget policies on high-cost patients; public-private partnerships; public-sector physicians owning private pharmacies; evidence-informed case payment rates; payment and hospital quality; bonuses and physician satisfaction; physician prescription choice between brand-name and generic drugs; and differences in pharmaceutical utilization across insurance plans that pay providers differently (fee-for-service versus capitation).

Policymakers from China’s National Development and Reform Commission and Ministry of Health will also speak at the conference. Selected research papers will be published through the Shorenstein Asia-Pacific Research Center either in a special volume or in a special issue of an English-language health policy journal.

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Contradictory goals plague China’s pharmaceutical policy. The government wants to develop the domestic pharmaceutical industry and has used drug pricing to cross-subsidize public hospitals. Yet the government also aims to control pharmaceutical spending through price caps and profit-margin regulations to guarantee access even for poor patients. The resulting system has distorted market incentives, increased consumer cost, and financially rewarded inappropriate prescribing, thus undermining public health. Though pharmaceuticals account for about half of total healthcare expenditures in China, representing 43% of expenditure per inpatient episode and 51% of expenditure per outpatient visit, some essential medicines are unavailable or of questionable quality.

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Health Affairs
Authors
Qiang SUN
Michael A. Santoro
Qingyue MENG
Caitlin Liu
Karen Eggleston
Karen Eggleston
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China's Harmonious Society colloquium series

co-sponsored by the Stanford China Program and the Center for East Asian Studies

Since 2006, the official doctrine of China's Communist Party calls for the creation of a "harmonious society" (HeXieSheHui). This policy, identified with the Hu Jintao leadership, acknowledges the new problems that have emerged as China continues its amazing economic growth. The economy is booming but so are tensions from rising inequality, environmental damage, health problems, diverse ethnicities, and attempts to break the "iron rice bowl." In this series of colloquia, leading authorities will discuss the causes of these tensions, their seriousness, and China's ability to solve these challenges.


Nancy Shulman's talk topic will be posted soon.

Nancy Shulman conducts laboratory and clinical research in the area of HIV therapeutics, with focus on antiretroviral resistance and treatment strategies of experienced patients, the impact of antiretroviral treatment on HIV co-receptor utilization, and HIV in China. she received her MD from Kansas University Medical School and holds a BA in biochemistry from University of Texas, Austin. She is a doctor specializing in internal medicine, pediatrics, and infectious diseases.

"Healthcare Coverage for 1.3 Billion: China's Odyssey"

Karen Eggleston

Media coverage as well as the academic literature give conflicting appraisals of China's reality: Is China's healthcare system on the verge of collapse? Why is healthcare so expensive and difficult to access in contemporary China? Have reforms 'marketizing' healthcare drastically undermined progress in assuring affordable access for all? Or do hospitals and other providers constitute a last bastion of state control and bureaucratized monopoly in the name of equal access? Chinese analysts and policy advisers have engaged in a sometimes acrimonious debate; some champion a government-led, National Health Service-like model, while others passionately argue that market forces should play a greater role. In this talk, Karen Eggleston will present a brief overview of China's health system reforms and current developments.

Karen Eggleston focuses her research on comparative healthcare systems during economic development and transition from central planning to market-based economies. Her interests include the impact of payment incentives on healthcare insurer and provider behavior; chronic disease management; and incentives surrounding health behaviors such as the spread of HIV/AIDS and tuberculosis, overuse of antibiotics, and smoking. She earned her PhD in public policy from Harvard University and has MA degrees in economics and Asian studies from the University of Hawaii.

Philippines Conference Room

Shorenstein APARC
Stanford University
Encina Hall E301
Stanford, CA 94305-6055

(650) 723-9072 (650) 723-6530
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Senior Fellow at the Freeman Spogli Institute for International Studies
Center Fellow at the Center for Health Policy and the Center for Primary Care and Outcomes Research
Faculty Research Fellow of the National Bureau of Economic Research
Faculty Affiliate at the Stanford Center on China's Economy and Institutions
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PhD

Karen Eggleston is Senior Fellow at the Freeman Spogli Institute for International Studies (FSI) at Stanford University and Director of the Stanford Asia Health Policy Program at the Shorenstein Asia-Pacific Research Center at FSI. She is also a Fellow with the Center for Innovation in Global Health at Stanford University School of Medicine, and a Faculty Research Fellow of the National Bureau of Economic Research (NBER). Eggleston earned her PhD in public policy from Harvard University and has MA degrees in economics and Asian studies from the University of Hawaii and a BA in Asian studies summa cum laude (valedictorian) from Dartmouth College. Eggleston studied in China for two years and was a Fulbright scholar in Korea. Her research focuses on government and market roles in the health sector and Asia health policy, especially in China, India, Japan, and Korea; healthcare productivity; and the economics of the demographic transition. She served on the Strategic Technical Advisory Committee for the Asia Pacific Observatory on Health Systems and Policies, and has been a consultant to the World Bank, the Asian Development Bank, and the WHO regarding health system reforms in the PRC.

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Director of the Asia Health Policy Program, Shorenstein Asia-Pacific Research Center
Stanford Health Policy Associate
Faculty Fellow at the Stanford Center at Peking University, June and August of 2016
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Karen Eggleston Shorenstein Asia-Pacific Research Center Fellow Speaker Stanford University
Nancy Shulman Assistant Professor of Medicine (Infectious Diseases) Speaker School of Medicine, Stanford University
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Shorenstein APARC
Stanford University
Encina Hall E301
Stanford, CA 94305-6055

(650) 723-9072 (650) 723-6530
0
Senior Fellow at the Freeman Spogli Institute for International Studies
Center Fellow at the Center for Health Policy and the Center for Primary Care and Outcomes Research
Faculty Research Fellow of the National Bureau of Economic Research
Faculty Affiliate at the Stanford Center on China's Economy and Institutions
karen-0320_cropprd.jpg
PhD

Karen Eggleston is Senior Fellow at the Freeman Spogli Institute for International Studies (FSI) at Stanford University and Director of the Stanford Asia Health Policy Program at the Shorenstein Asia-Pacific Research Center at FSI. She is also a Fellow with the Center for Innovation in Global Health at Stanford University School of Medicine, and a Faculty Research Fellow of the National Bureau of Economic Research (NBER). Eggleston earned her PhD in public policy from Harvard University and has MA degrees in economics and Asian studies from the University of Hawaii and a BA in Asian studies summa cum laude (valedictorian) from Dartmouth College. Eggleston studied in China for two years and was a Fulbright scholar in Korea. Her research focuses on government and market roles in the health sector and Asia health policy, especially in China, India, Japan, and Korea; healthcare productivity; and the economics of the demographic transition. She served on the Strategic Technical Advisory Committee for the Asia Pacific Observatory on Health Systems and Policies, and has been a consultant to the World Bank, the Asian Development Bank, and the WHO regarding health system reforms in the PRC.

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Director of the Asia Health Policy Program, Shorenstein Asia-Pacific Research Center
Stanford Health Policy Associate
Faculty Fellow at the Stanford Center at Peking University, June and August of 2016
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Dr. Linton was born in Philadelphia in 1950 and grew up in Korea, where his father was a third generation Presbyterian missionary. He is a visiting associate of the Korea Institute, Harvard University, for 2006-07. Linton is currently Chairman of The Eugene Bell Foundation, a not-for-profit organization that provides humanitarian aid to North Korea.

Dr. Linton's talk will focus on the Eugene Bell Foundation and its programs. Named for Rev. Eugene Bell, Lintonn's great-grandfather and a missionary who arrived in Korea in 1895, the Foundation serves as a conduit for a wide spectrum of business, governmental, religious and social organizations as well as individuals who are interested in promoting programs that benefit the sick and suffering of North Korea.

Since 1995, the Foundation strives primarily to bring medical treatment facilities in North Korea together with donors as partners in a combined effort to fight deadly diseases such as tuberculosis (TB). In 2005, the North Korean ministry of Public Health officially asked the Foundation to expand its work to include support programs for local hospitals. The Foundation currently coordinates the delivery of TB medication, diagnostic equipment, and supplies to one third of the North Korean population and approximately forty North Korean treatment facilities (hospitals and care centers).

Dr. Linton's credentials include: thirty years of teaching and research on Korea, twenty years of travel to North Korea (over fifty trips since 1979), and ten years of humanitarian aid work in North Korea. Dr. Linton received a Bachelor of Arts degree from Yonsei University in Seoul, Korea, a Masters of Divinity from Korea Theological Seminary, and a Masters of Philosophy and a Ph.D. in Korean Studies from Columbia University.

This public lecture is part of the conference "Public Diplomacy, Counterpublics, and the Asia Pacific." This conference is co-sponsored by The Asia Society Northern California; The Japan Society of Northern California; Business for Diplomatic Action; Center for International Security and Cooperation at Stanford University; and the Taiwan Democracy Program in the Center on Democracy Development, and the Rule of Law at Stanford University.

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Stephen Linton Chairman Speaker The Eugene Bell Foundation
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