Supply-side Incentive Problems. China's Rural Cooperative Medical Research

The farmers' medical care is an important contents of chinese harmonious society. For long time, the high medical care expenses become farmers that have no medical insurance can't bear of heavy in China. The implement of the new rural cooperative medical scheme (NCMS) is in time doubtless. It help the farmers to aquire the basic medical care. But cooperative medical scheme should also be compatible with the ability to supply medical services. The supply-side take the leading position. So the ability to supply medical services restricts the extent of the NCMS play. In rural areas where has been implemented the NCMS, farmers still can't bear the high medical care expenses. Low quality of medical services greatly affected the sustainability of the NCMS. Incentive mechanism is very important. Many problems of rural medical care supply caused by the supply-side incentives.Using a combination of theory and practice, this paper study the incentives to the supplier in the NCMS. The medical care supplier in the NCMS makes a very decisive role. Existing distort incentives to the supplier in the NCMS caused low quality supply and high cost of medical care in rural areas. Which require the establishment of appropriate supply-side incentives. To allow the NCMS to achieve the desired goals, the supply-side incentives should include at least: (1) The NCMS to make farmers' ability to pay. (2) Rational choice mechanism to create competitive pressures to medical institutions. (3) Appropriate payment system for medical institutions to form the tough constraints to make sure that they reduce the risk of moral hazard and reduce induced demand. (4) The form of government regulation should be changed. These incentives are interrelated. It must be noted these incentives conflict and mutual dependence. So coordination mechanism of these incentives should make to approach the ultimate goal of basic medical care supply in the NCMS.