The Development Of For-profit Medical Institutions And Impact On Medical Expenditures In China

Currently, there are a lot of debates and obstacles facing the development of for-profit medical institutions in China. Does the existence of the for-profits affect medical expenses in the health care market? If it does, what is the magnitude of the effect? And what are the policy implications for China's health care reform? In order to find the answers to these questions, our study explores the relationship of market share of for-profits and medical expenses intensively with the help of econometric approaches after introducing the related background information.From the descriptive analysis on the for-profit providers, we find that although they have developed quickly since 2000, their overall scales are relatively small and their capacity of deliverying health care services is very limited compared with not-for-profits. The institutional settings in which they survive have much constraint against their further development.Further, we empirically investigate the effect of for-profits on the medical expenses taking advantage of three datasets. First of all, using provincial level panel data, we find that the higher the proportion of total discharges from for-profit hospitals in the last year in a province, the lower the outpatient expenses per visit and the inpatient expenses per visit in general hospitals in the current year; also, the larger the absolute as well as the relative scale of for-profit hospitals in the previous year, the lower the medical expenses per visit in general hospitals in the current year. Secondly, from the Nanjing Urban Employee Basic Medical Insurance data, it is found that other things being equal, the average outpatient expenses in not-for-profit providers and the overall expenses of both types of providers in this year decrease as the proportion of outpatient visits to for-profit providers in the last year increases. This implies that for-profits have brought about a price"spillover effect"on the not-for-profits in the market. Lastly, by employing a household survey data collected in 9 cities, we find that the outpatient expenses per visit in for-profits are significantly lower than that in not-for-profits, and a notable part of the expenses gap between these two types of providers could be attributed by the systematic difference between for-profits and not-for-providers. In addition, there isn't a significant difference in consumer satifacition between these two types of providers after controlling for demographics and medical institution characteristics. This presents evidence that helps unfold the pathway of for-profit providers competing with their not-for-profit counterparts in the health service market.Our findings shed light on the fact that development of for-profit medical providers can enhance competition in health care market in China. Therefore, encouraging the entry of for-profits is helpful in controlling medical expenses. Some policy implications are discussed at the end of the dissertation based on our research results.There is some innovation in our study.To best of our knowledge, this is the first attempt to explore the impact of for-profit medical service providers'development on the medical expenditures, which fills the gap in this area in China. Secondly, this study intensively address the role of competition in medical care market in a unique policy settings in China, which us helpful to further understand medical care market and competition. Thirdly, there is some technical innovation in that we carry out empirical study on the relationship between for-profit in medical service instutitions and medical expenditures using econometric approaches. Fourthly, the differences between medical expenditures in for-profits and that in not-for profits are decomposed into several parts, which is useful for us to learn more about the relationship between profit status of institutions and medical expenditures.