Theoretical And Empirical Analysis Of Medical Care Price Regulation In China

Medical care price is significant to both the supplier and consumer of medical care. Firstly, the level of medical care price determines the demand for medical care, the utilization degree of medical care and the patients' welfare. Secondly, it also influences the health insurance organizations' payment to the mecical care provider and their profit. Thirdly, the price of medical care is one of the main means of provider's imbursement. In addition, as an important economic lever, the price inducts the economic behavior of the patient and the medical care supplier. Rational medical care price level and structure has direct relation with rational collocation and efficient utilization of medical resource. As a result, the medical care price has a great impact on the whole society, and it is of the deep concern to payers, purchasers, providers, the public and policymakers.However, the particularity of medical care service market especially the dual status of provider and their capability to induce demand determined that price mechanism only has very limited role in the market. Free price mechanism will result increases in medical care expenditure consequentially. The rapid growth of medical care expenditure is a common problem that all of the countries are facing now. Compared to the spending on most of the other goods and service, individual and national medical care expenditures increased at a greater rate. As the medical care expenditure increases, the burden of the society is becoming heavier. Since medical care price is an important part of medical care expenditure, price regulation is seen as a measure of control medical care expenditure.In the process of medical care service market reform in China, the government regulation is just underway, and now it can't supplement the market mechanism very well. The drawbacks in medical care price regulation result in the distortions of provider behavior, finally medical care expenditure grows rapidly, equity, efficiency and access to medical care are affected seriously. The problem of "difficult and expensive to see a doctor" is the focus of society's attention.Based on the background mentioned above, this dissertation analyzes the subject of medical care price regulation in China. We use main theories of microeconomics, regulatory economics and health economics, allowing for the status quo and problems of medical care price regulation in China to analyze the necessity of regulation, price level and price structure regulation, the mode of provider payment and the factors which impact the effects of regulation. After the theoretical analysis, we design an econometric model and use SPSS software to analyze the impact of medical care price regulation reform on the medical care expenditures. On the basis of empirical analysis, we put forward some suggestions on improvement of price regulation. It is significant both in theory and in reality to discuss the elementary theory and method of medical care price regulation in order to create incentives for provider to control costs and improve efficiency.This dissertation includes six chapters. Chapter 1 is introduction, and it puts forward the significance of the subject, provides review of literature, and introduces studying methodology, innovation, shortcoming and structure arranged of the dissertation.Chapter 2 is theoretical analysis of the demand for medical care price regulation. Based on the definition of related concepts, we point out that many sorts of market failure such as information asymmetry, supplier-induced-demand, externality and monopoly exist in medical care market, so it's very difficult to form rational price through market mechanism and it's necessary for the government to regulate on medical care price.Chapter 3 discusses the medical care price level and price structure regulation. As for medical care price level regulation, allowing for the particularity of medical care service market and the main problems of medical care price regulation in China, we use the public utility price level regulation model to design a model of medical care price level regulation in China. At the same time, we discuss the subject of rational cost imbursement under price level regulation and other regulation measurements. As for medical care price structure regulation, on the basis of principle of Ramsey Pricing, we put forward that the government should design different prices according to different medical care service, different region and different patients because of the different demand elasticity.The mode of medical care provider payment creates powerful incentives affecting provider behavior and the efficiency of medical care market, and finally it determines the medical care expenditures. Chapter 4 provides economic analysis of incentives of different medical care provider payment systems. It mainly analyzes the impacts of fee-for-service system and diagnostic related groups system on costs and quality of medical care.Whether are the price level, price structure and the provider payment system rational or not are related to the effects of price regulation policy directly. The state of price regulation policy making and implementing depends on the balance of bargaining power among players—regulator, provider and consumer. Chapter 5 answers the question that how to improve the effects of medical care price regulation. It analyzes external environment (including legal environment, administrative environment and medicinal science and technology) and internal factors (including the characters of the medical care provider, the medical care price regulator, the consumer and the medical insurance organization) of medical care price regulation. Then it frames medical care price regulatory system in China aiming at main problems of external context and internal factors of medical care price regulation.Chapter 6 provides a summary of the evolution of medical care price regulation policy in China and analyzes the effects of price regulation reform on the medical care expenditure from empirical prospect. The regression results indicate that regulation reform has positive effect on medical care expenditure control, it is necessary to continue the regulation reform.The innovations of the dissertation are as below.First, it designs a model of medical care price level regulation in China. The model is based on the natural monopoly price level regulation theory and model, considering the particularity of medical care service market, the main problems of medical care price regulation in China, the change of price index, the imbursement for the cost of service provided to the poor and the information held by the regulator.Second, the mode of medical care provider payment is seen as an important part of medical care price regulation content, and the impact of different payment system especially diagnostic related groups system on medical care costs and quality are analyzed. This develops the basic theory of medical care price regulation to some extent.Third, the econometric model of the effect of medical care price regulation on medical care cost is improved, and the new model that can reflect the state of medical care service market and the factors influence medical care expenditures is designed to provide empirical analysis of medical care price regulation reform effects.