Corporate Governance And Efficiency Of Hospitals In China

Objective:In this context of health system reform, there are vary type of ownership of hospitals. Thus different governance models across the hospitals exist simultaneity and caused different efficiency. To compare the difference of efficiency caused by ownership and governance model, it has certain theoretical and practical significance for improving the health delivery system.Methods:Based on unstructured and non-quantificational collection of literatures, the paper reviewed the related theories including principal-agent, welfare economics and others to put forward the logic framework. Typical investigation, semi-structured interviews and nominal group process were adopted for empirical study. On the data analysis, DEA and SFA were used to measure the relative technique efficiency of different type of ownership and governance model as well as statistics methods.Results:There are four types of governance model according to the governing subject, namely traditional governance model by health administrative sectors, decentralized governance model by other sectors, corporate governance model by councils, corporate governance model by board of directors.By analysis on the current situation of internal goverance system of Chinese hospitals, we found that most of them are using "political" agent on selection and recruitment, in antoher word, party committee are playing bigger role on recruitment and appointment in most of hospitals currently. This made the directors of hospitals are confined or restrited to some extent on personnel decision, bonus distribution, balance of income and outcome usage, investment decision, financing decision and strategy adjustment. The compensatoin method of most of the directors of hospitals are using the means of basic salary plus to bonus , and the grand total of annual income is around from three to five times as average income of hospital employees. However, hospitals which are using annual scheme are mainly private owned hospitals or stock holding hospitals. Only 22.58% hospital management people are satisfactory. The interviewees exposed that the remuneration scheme that they expect salary as the following order: annual salary, salary plus bonus, salary plus equity, and others. In addition, state owned hospitals lack scientific decision system and it leads to blind development; lacking efficient supervision major body and it causes the crude operation.In the aspect of external governance, there're three problems: co-existence of management failure and excessive management (incomplete macro control system and mixture of governance and execution); failure to give the market-oriented governance scheme into full play (incomplete external audit system, lack professional and medical service markets); the coordination among benefit-related parties is still in the stage of theoretical exploration ( most of them is logical analysis but lacking of sufficient evidence study).Neither the difference among the efficiencies of four governance models nor different ownership are not significant ((P>0.05). The average collective efficiency is 0.843 by DEA and the average technique efficiency is 0.863 by SFA. The manager in the hospitals among various governance models estimated the current condition about hospital governance with different opinion(P<0.05). The same difference occurs in the staff satisficaion(P<0.05). Furthermore, we found that there are difference in the assessment to medical technique, medical fee and medical ethics among the different governance model by patients investigation(P<0.05).Suggestion:1. Corporate governance is more vital for improving the efficiency of hospitals than the corporate governance structure.2. Based on summarizing the current condition and the problems about internal governance, the paper put forward that we should strength the governance from three sides: select and employ mechanism of agent which should be scientific, democrat and standard in the way and subject, incentive mechanism to assure compatibility between principal and agent, restrictive mechanisms for minimized moral hazard, information disclosure to control or to prevent misconducts.3. From the outside, we could improve the governance environment by the way of renewing the government role in the health reform, cultivating coopetition market mechanism and enhance the stakeholder co-governance.4. The thesis came to the conclusion that the Chinese public hospitals reform experimental units proposed to take measures from the following four sides: restructure hospital legal representative governance structure, establish public hospitals legal representative governance code, improve the consistent system of motivation and confinement and better the external governance environment.Innovations:Overall empirical study on the governance models and its efficiency of Chinese hospitals cannot be seen so far, which can meet the lack of empirical study about corporate governance in the Chinese hospitals. What's more, the study mixed the transdisciplinary theories and combined qualitative and quantitative analysis together.