An Empirical Study Of Physician-induced Demand In China

Since the founding of New China, China has carried out a series of social reform of themedical insurance system. Using the traditional public health and medical insurance and theunit itself to a third party pays, which has resulted in the adverse selection and moral hazardof patients.In 1998 the State Council promulgated the "Provisions on the establishment of the basicmedical insurance system for urban workers," Medicare reform and effective fund-raisingmechanism for the inhibition of the risk of moral hazard patients. However, as medical andindustrial process control mechanism and lack control of supply-side, Physician-inducedDemand become the main source of growth in medical costs.There exists prevailing information asymmetry in the health care market ,Physician-induced Demand become an intractable problem in controlling rapid increasingmedical cost .the paper do an empirical studies which shown that there is a positiveassociation between physician density and utilization of medical services in China. However,this relationship maybe reflects the availability effect or the Physician-induced Demand.Therefore, this paper constructs the models which distinguished between an inducement andan availability effect. A 1% increase in the average number of health workers per 10,000population, the number of clinics has increased an average of 0.384%. The average medicalcost increases as high as 0.569% .Combined with Yi Dan hui's of the results of the studywe analysis the impact of supplier induced demand to Health Insurance Fund . The results is a1% increase in the number of health workers per 10,000 population, on a 0.4% increase inMedicare funds.Finally artificial neural network knowledge will be applied to the estimation andevaluation of the medical expenses, which is also another bright spot innovation.