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In this colloquium, we hear about Tsinghua University researchers' studies on physician-patient trust and satisfaction with health care in China. Professor Shen describes her research on “Social distance and its impact on patients’ trust in their providers in transitional China.” Using 2008 data from over 3500 patients that includes unique measures of patient trust – such as whether or not patients followed doctor recommendations for treatment – Dr. Shen and colleagues find large differences in trust, with patients of lower socio-economic status displaying higher trust in doctors than other groups. Analyses also examine how trust is related to satisfaction with health services, and how patient dissatisfaction in China compares to that in other countries’ health systems. Related research explores patients’ and providers’ attitudes towards separation of prescribing and dispensing, a key component of the 2009 health reforms, and how patient mistrust of providers stems from concerns about both competence and profiteering from overprescribing.

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Visiting Scholar, 2009-2010
Qunhong Shen Associate Professor Speaker Tsinghua University School of Public Policy and Management
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James Hoesterey
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Prominent Indonesian Muslim intellectual Nurcholish Madjid once declared “Islam Yes; Islamic political party No!” Voters in contemporary Indonesia seem to agree with this basic sentiment. Despite the recent Islamic revival that has dramatically increased public expressions of piety, Islamic political parties have failed to gain any significant electoral traction in Indonesia. In fact, between the 2004 and 2009 national elections, support for Islamic parties actually decreased from 38 percent to approximately 28 percent. Yet during those same five years, the Islamic political parties that failed to win at the ballot box mobilized enough political and popular support to pass one of Indonesia’s most divisive pieces of legislation—the Anti-Pornography Law. These seemingly contradictory elements of Indonesian politics provide starkly different impressions of Islam’s political role. Does a weak showing in the country’s electoral politics indicate the imminent demise of Islam in Indonesian politics? Or does the politically adept maneuvering of Islamists—who seek political power through legislation about bodily discipline—foretell gloomy days ahead?

Explanations for this paradox depend largely on where we look for “the political.” Political scientist Greg Fealy has described Islam in Indonesia as a mosaic. If we spend too much time focusing our gaze on one single area, he observes, we lose sight of other patterns elsewhere in the mosaic. To understand political Islam by ballot box alone is to miss the cultural undercurrents that have direct bearing on Islam and politics in Indonesia.

The anti-pornography bill was not only a political battle waged inside the parliament building; it was also a media drama that played out in the newspapers, televisions, and on the Internet. Human rights and women’s advocacy groups vehemently protested an early version of the bill, which stipulated that women would be prevented from leaving their homes during certain evening hours. From a different vantage point, the mostly Hindu island province of Bali threatened to secede, arguing that the article prohibiting “revealing” clothing in public would wreak havoc on the island’s tourism industry, still sluggish after devastating bomb attacks in 2002 and 2005. Whereas many non-Muslims worried about the “Islamization” of Indonesia, proponents of the bill lamented the “degradation of national morality.”

Popular Muslim television preachers were among the bill’s most vocal supporters. Eager to parlay their celebrity appeal into political clout, TV preachers Ustad Jefri Al-Buchori and Arifin Ilham helped to lead the so-called Million Muslim March to rally public support for the anti-pornography bill. Celebrity preacher and self-help guru Abdullah Gymnastiar led a sophisticated multimedia campaign to promote the bill through television, radio, the Internet, text messages, and public rallies. All of these popular preachers, in step with the political strategy of the Indonesian Council of Ulamas, invoked the religio-political language of moral crisis in an attempt to control the terms of political debate. Unable to win an election, Islamic groups flexed their moral muscle in the public sphere. From the pulpit of his Sunday afternoon television program, Gymnastiar characterized those against the bill as “having no shame” before God or country. Nearly every single political party, anxious not to appear “un-Islamic,” voted to support the anti-pornography legislation.

The political participation of a new generation of media-savvy religious leaders reveals a sentiment quite different from Nurcholish Madjid’s liberal aspirations. As one proponent of the Anti-Pornography Law put it, “Islamic political party No; Political Islam Yes!” Whereas utopian visions of the international caliphate may not resonate with Indonesian voters, it appears that political Islam—as played out on the public stage—is alive and well. What remains to be seen, however, is whether those who engage in the politics of piety also have the moral courage to champion Indonesia’s more pressing issues of poverty and corruption.

 

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Shorenstein APARC Dispatches are regular bulletins designed exclusively for our friends and supporters. Written by center faculty and scholars, Shorenstein APARC Dispatches deliver timely, succinct analysis on current events and trends in Asia, often discussing their potential implications for business.

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Brian Chen
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Malpractice liability, along with medical technology and payment system distortions, regularly figures among the most-cited reasons for escalating health-care spending in the United States. On the one hand, Harvard economist Amitabh Chandra conservatively estimates that upwards of $60 billion, or 3 percent of total health care costs ($1.8 trillion), is spent annually as a result of direct litigation and indirect defensive medicine costs. On the other hand, tort reform advocates place the figure at $200 billion by extrapolating, to the entire U.S. population, the results of research conducted by Stanford professor Dan Kessler and Mark McClellan. Their 1996 study shows that tort reforms reduced provider liability costs for Medicare heart patients by 5 to 9 percent.

At the heart of these debates is the following question. Does medical malpractice liability achieve its dual goal of compensating victims of medical injuries and deterring medical errors, or does it merely encourage wasteful defensive medicine without improving patient health? Despite considerable empirical research, there is little evidence that malpractice litigation deters medical negligence. The evidence is much stronger—though still hotly debated—that malpractice fears actually encourage physicians to engage in defensive medicine. My work at Shorenstein APARC explores whether malpractice pressures affect physician behavior, patient health, and health care costs in Asia. Studying physicians’ response to legal changes in Taiwan, I find that greater malpractice liability may, under certain circumstances, prompt physicians to perform more services without necessarily improving patient health.

In particular, I focus on how increased medical malpractice liability affects physicians in Taiwan who provide treatment to pregnant women. I have studied how a series of court rulings as well as an amendment to Taiwanese law between 1997 and 2004 impacted physicians’ test-ordering behavior and decisions to perform Caesarian sections. Traditionally, Taiwanese doctors are held accountable for medical malpractice under two bodies of law: tort law in the Civil Code, and criminal law for harm resulting from negligent acts in the course of professional operations. The latter, prosecutorial approach is rare among industrialized nations.

In January 1998, a Taipei District Court decision in favor of plaintiffs in a civil suit for damages sent shockwaves through the medical community. The district court judge disregarded the traditional tort requirement of proving the defendant’s negligence (or fault), and applied the “strict liability” doctrine of the Consumer Protection Law to impose liability on a medical provider without any showing of wrongdoing. The court decision—subsequently affirmed by the Taipei High Court on September 1, 1999 and by the Supreme Court on May 10, 2001—sparked resentment among medical professionals. Passions flared in heated debates between medical and legal scholars about whether medical services should be considered a covered “service” under the Consumer Protection Law. Economists and legal academics questioned whether the traditional justifications for imposing strict liability apply in the highly unpredictable practice of medicine, especially in obstetrics. The saga concluded in April 2004, when the legislature amended the Medical Law to require negligence or fault in medical malpractice cases.

My research considers the effect of these court rulings and legal amendments on physicians’ test-ordering behavior and their propensity to perform Caesarean sections. I identify two sources of variation in perceived risks of malpractice liability: (1) the differences between the level of exposure to malpractice risks due to the ownership structure and size of the physicians’ place of practice; and (2) the differences in perceived risks based on the physicians’ geographical location.

My results are consistent with the existence of defensive medicine. First, with respect to their propensity to increase laboratory tests and reduce Caesarean sections, physicians who own their clinics (“physician-owners”) in Taiwan reacted more strongly to the legal changes than did physicians who are salaried employees at larger hospitals (“nonowners”). Physician-owners’ behavior did not change, however, in discretionary expenditures that were not associated with defensive medicine. Second, physician-owners working in areas under the jurisdiction of the Taipei District Court reacted more strongly to legal change than did those practicing in Kaohsiung, Taiwan’s second largest city, at the opposite end of the island.

The negative connection between the likelihood of Caesarean deliveries and increased malpractice liability deserves special mention, since most published studies find a positive association between malpractice liability risks and Caesarean rates. However, economists Janet Currie and Bentley MacLeod at Columbia University suggest that reforms in which liability is closely aligned with defendant’s actual levels of care may produce the opposite effect. In the Taiwan context, increased medical malpractice liability accrues directly to the physician-owners. Since Caesarean sections are generally riskier than natural deliveries, it seems logical that higher tort liability in Taiwan may actually decrease the likelihood of deliveries by Caesarean sections. In this sense, my study confirms Currie and MacLeod’s predictions and empirical results.

My work contributes to our understanding of health law and policy in several concrete ways. First, I add support to the existence of defensive medicine, even in a non-Common Law jurisdiction. Since I focus on Taiwan—an environment that lacks malpractice insurance, in which physicians are either owners or employees at providers of varying sizes—my research isolates the pure effect of malpractice liability to a greater extent than do many current studies. Second, I show that interaction between the payment and legal systems may either enhance or mitigate the hypothetical pure effects of legal policies. In a fee-for-service system, physicians subject to higher malpractice risks appear much more willing to increase laboratory tests than to reduce profitable Caesarean sections. Third, my research indicates that, by altering physicians’ exposure to risks, different organizational forms and ownership structures of health care provision may affect defensive medicine at differing rates.

In sum, the practice of “defensive medicine” appears not to be a uniquely American phenomenon. Indeed, it may also play a role in health care cost escalations in Asia, especially under heightened physician liability regimes.

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Shorenstein APARC Dispatches are regular bulletins designed exclusively for our friends and supporters. Written by center faculty and scholars, Shorenstein APARC Dispatches deliver timely, succinct analysis on current events and trends in Asia, often discussing their potential implications for business.

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With the rapid growth of the Chinese economy and transition from central planning to a more market-oriented structure since the 1980s, private health care providers have gained market share, especially in provision of primary health care, despite legal and administrative obstacles.  To reach the goals for universal health care coverage, access and quality announced in April 2009 as part of China’s new health reforms, effective government stewardship of non-state health care providers will be crucial. This presentation will give an overview of private providers in the grass roots health delivery system in urban and rural China, as well as evidence from field study. Policy trends in stewardship, contracting out and how private providers can better participate in universe health insurance are discussed.

Yan Wang is deputy director of the Disease Control Division for the Shandong Province Health Department, China, and a visiting scholar with the Asia Health Policy Program at the Shorenstein Asia Pacific Research Center at Stanford University in 2009-2010. She received her Ph.D. in public health from Shandong University and has been in charge of managing rural and urban community health services for Shandong’s 90 million residents for 10 years. Her research interests focus on evidence to improve policies for primary health care, health insurance, and health promotion.

Daniel and Nancy Okimoto Conference Room

Shorenstein APARC
Stanford University
Encina Hall, Room E-301
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AHPP Visiting Scholar, 2009-2010
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Dr. Yan Wang is a visiting scholar at Shorenstein Asia-Pacific Research Center for 2009-2010. Her research focuses on tobacco control, primary health care system, health education and health promotion, and health insurance. She is currently also the group manager of Division of Grass-Root Health Services, Shandong Provincial Health Department, P.R.China, and is in charge of urban community health services, health education and health promotion. She has an MA in public health from Shandong Medical University and PhD in Social Medicine and Health Management from Shandong University. Dr. Yan Wang has been an adjunct professor at Weifang Medical University since 2008. She also engaged in academic association and public organizations related to health affair.

Yan Wang Deputy Director, Disease Control Division Speaker Shandong Province Health Department, China
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Given an increasingly complex web of financial pressures on providers, studies have examined how hospitals’ overall financial health affects different aspects of hospital operations. In our study, we develop an empirical proxy for the concept of soft budget constraint (SBC, Kornai, Kyklos 39:3–30, 1986) as an alternative financialmeasure of a hospital’s overall financial health and offer an initial estimate of the effect of SBCs on hospital access and quality. An organization has a SBC if it can expect to be bailed out rather than shut down. Our conceptual model predicts that hospitals facing softer budget constraints will be associated with less aggressive cost control, and their quality may be better or worse, depending on the scope for damage to quality from noncontractible aspects of cost control. We find that hospitals with softer budget constraints are less likely to shut down safety net services. In addition, hospitals with softer budget constraints appear to have better mortality outcomes for elderly heart attack patients.

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International Journal of Healthcare Finance and Economics
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Karen Eggleston
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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.

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International Journal of Healthcare Finance and Economics
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Karen Eggleston
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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.

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Asia Health Policy Program working paper #10
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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.

 

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Asia Health Policy Program working paper #8
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Karen Eggleston
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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.

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Asia Health Policy Program working paper #7
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Karen Eggleston
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