The Effect Of Zero Mark-Up Drug Policy On Inpatients’ Healthcare Expenditures

The mark-up on drugs refers to the Chinese government allows public hospitals to sell drugs for an additional mark-up rate of no more than 15%on the basis of the actual purchase price.The original intention is to relieve the financial pressure of public hospitals and help with the steady development of China’s healthcare delivery system.However,the long-term existence of mark-up on has given rise to serious drug abuse behavior,resulting in a series of problems,such as the sharp increase in drug costs,the huge expenditure of medical treatment and the intensification of conflicts between doctors and patients.Therefore,in the new round of the reform on China’s healthcare delivery system launched in 2009,the elimination of the mark-up on drugs was listed as an essential mission,which aims to improve the structure of healthcare expenditures,rationalize the incentive mechanism for physicians,and ease the financial burden of medical treatment.Therefore,in order to figure out the changes of healthcare expenditures after the Zero Mark-up Drug Policy（ZMDP）,comprehensively evaluate the effect as well as analyzing the potential threats in the ZMDP,this paper conducted an empirical analysis based on the medical insurance reimbursement data of inpatients from 2009 to 2012in 31 county-level public hospitals in a provincial capital city.The study found that the implementation of ZMDP significantly reduced the drug cost of inpatients by19.9%,while increased the inpatients’diagnostic costs,treatment costs and other medical expenditures by 19.2%,25.8%,and 58.1%,respectively,further increased the total healthcare and out-of-pocket expenditures,with no improvement in the economic burden of patients.In addition,the author further discussed the differences in the level of healthcare costs of patients through quantile regression.The results showed that for patients whose healthcare costs below the median,ZMDP significantly reduced the drug costs while increased the diagnostic costs and other medical expenditures.Under the influences of several factors,the total healthcare costs as well as the out-of-pocket expenditures increased significantly.For patients whose healthcare costs above the 70^th percentile,ZMDP significantly reduced the drug costs,while the diagnostic costs and other medical costs have no significant change.As a result,the total healthcare expenditure as well as the out-of-pocket costs also have no change.Finally,for patients with a highly level of healthcare expenditures(mainly refers to whose costs above 90^th percentile),both the total healthcare costs and out-of-pocket costs showed a small decrease after the implementation of ZMDP.To sum up,after the implementation of ZMDP,the average drug cost of inpatients has been significantly reduced,and the drug abuse behavior has also been alleviated,which is comply with the expected goal of ZMDP.However,in terms of the patients’healthcare costs burden,for most patients,the ZMDP only plays a role in adjusting the medical cost structure,but does not effectively ease the medical treatment economic burden of the masses.Besides,it even makes the total medical expenses and out-of-pocket expenses of some patients rise instead of falling.The reason lies in the change of doctors’profit-seeking behavior,which is mainly reflected in the excessive use of diagnostic tests and sanitary consumables.In addition,for a small number of patients with a higher level of medical expenses,ZMDP not only realizes the adjustment of medical expense structure,but also reduces the total medical expenses as well as the out-of-pocket expenses of inpatients,thus effectively easing the financial burden of them.