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Hospitals' Responses to Administrative Cost-containment Policy in Urban China: The Case of Fujian Province*

Published online by Cambridge University Press:  13 November 2013

Alex Jingwei He  and
Jiwei Qian
Alex Jingwei He
Affiliation:
Hong Kong Institute of Education. Email: jwhe@ied.edu.hk.
Jiwei Qian
Affiliation:
National University of Singapore. E-mail: eaiqj@nus.edu.sg.
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Abstract

The patterns of hospitals' behavioural changes in response to different insurance systems and payment arrangements have been well documented in the literature on health economics and policy. To understand these changes, it is necessary to look at the shifts in fundamental economic incentives. Meanwhile, hospital practices are also subject to adjustment when administrative tools are realigned. This article examines the dynamics of a health policy campaign started in 2005 by a Chinese provincial health administration that was committed to containing health expenditures using administrative measures. Through a combination of qualitative in-depth interviews and quantitative panel data analysis comprising 30 public hospitals in the sample, this article finds that by revising the structure of administrative measures on the supply side, the Chinese health bureaucracy is able to curb rapid cost inflation in the short term. However, while having to meet the cost control mandate imposed by the health administration, Chinese public hospitals still managed to defend their economic interests by engaging in various unintended opportunistic behaviour. This article analyses a panel database from Fujian province and reveals the strategies adopted by public hospitals and considers their implications for China's ongoing national healthcare reform.

Keywords

cost containmenthospital behaviourcost inflationhealth policyChina
Type
Articles
Information
The China Quarterly , Volume 216 , December 2013 , pp. 946 - 969
Copyright
Copyright © The China Quarterly 2013 

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Footnotes

*

The authors thank the Hong Kong Institute of Education for providing funding support (project code: RG61/2011-2012 and FAS/R002/11-12). The first author is also very grateful to the Lee Kuan Yew School of Public Policy, National University of Singapore, for offering a generous scholarship for his doctoral research during which the fieldwork of this study was conducted. An earlier draft of this paper received valuable comments from Phua Kai Hong, Wu Xun, Scott Fritzen and M. Ramesh. The authors also thank Chen Jingde of Fujian Provincial Government for facilitating the fieldwork of this study.

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