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http://ssrn.com/abstract=1697832
 
 

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Perverse Incentives in the Chinese Health System and Assessment of the April 2009 Reform


Meghan Bruce


Oxford University - Department of Public Health

October 25, 2010

Stanford Asia Health Policy Program Working Paper No. 18

Abstract:     
Since 1978, China has been primarily market-focused in its provision of health care and social services. The market-driven health care system has been characterized by perverse incentives for individual providers, patients, and hospitals that are inducing improper provision of care: overprescription of pharmaceuticals and high-tech testing, lack of effective primary care and gatekeeping, and competition for patients instead of referral. The national health care reform document that was made public in April 2009 recognizes this failure of the market in health care in China. The document suggests potential policies for improvement on the current system that are focused primarily on a targeted increase in government funding and an increased, changing role for the government. We assess the potential of this national health care reform to achieve the stated goals, and conclude that the reform as designed is necessary but insufficient. For the reform to meet its goals, the promised increase in funding should be accompanied by improved data collection, regional piloting, and a strong regulatory and purchasing role for the government in aligning incentives for individual and institutional payers, providers, and patients.

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Date posted: May 18, 2011  

Suggested Citation

Bruce, Meghan, Perverse Incentives in the Chinese Health System and Assessment of the April 2009 Reform (October 25, 2010). Stanford Asia Health Policy Program Working Paper No. 18. Available at SSRN: http://ssrn.com/abstract=1697832 or http://dx.doi.org/10.2139/ssrn.1697832

Contact Information

Meghan Bruce (Contact Author)
Oxford University - Department of Public Health ( email )
United Kingdom
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