Reallocating authority in the Chinese health system: an institutional perspective

Abstract

Affordability of health care is still a serious concern in China after the health reform in 2009. According to the literature of the economics of organization, allocation of authority in hospitals and social insurance is extremely important for improving affordability. The information structure and the degree of conflicts in tasks within an organization determine the optimal allocation of authority. However, the progress of the governance reform to reallocate the authority is relatively slow during the reform period. This article argues that the slow progress is associated with ineffective coordination among government departments in China. Two institutional reasons are illustrated in this article. First, there is no institutional arrangement to facilitate the horizontal coordination among ministries and bureaus. Second, the performance evaluation system for officials, which mainly addresses the vertical coordination between upper and lower level governments, has unintended consequences for horizontal coordination among local government departments. Future reforms should take into account these institutional aspects.

Keywords:

• china
• health reform
• governance
• social health insurance
• public hospital reform
• authority
• institution

Notes

1. China health statistical yearbook, various years & Statistical Communiqué on Healthcare and Family Planning Development in China 2013,

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4. http://sbs.mof.gov.cn/zhengwuxinxi/zhengcefabu/201405/t20140527_1084649.html, accessed 4 August 2014.

5. For example, a recent document released by Gaoan city of Jiangsu province in 2011 highlights the importance of the balance in the insurance fund but not much was mentioned about the negotiation mechanism to reduce the treatment fee in the hospital. See http://www.jxhrss.gov.cn/view.aspx?TaskNo=008&ID=105554, accessed 4 August 2014.

6. http://finance.sina.com.cn/china/hgjj/20131115/015417327694.shtml Accessed 8 December 2014.

7. China Reform, No. 8, 2013

8. See http://www.bjah.gov.cn/, accessed 8 December 2014.

9. See http://www.shdc.org.cn/, accessed 8 December 2014.

10. http://news.xinhuanet.com/health/2014-05/13/c_1110654371.htm, accessed 4 August 2014.

11. http://news.xinhuanet.com/health/2014-05/13/c_1110654371.htm, accessed 4 August 2014.

12. http://www.mof.gov.cn/zhengwuxinxi/zhengcefabu/201208/t20120831_679663.htm, Accessed 4 August 2014.

13. http://companies.caixin.com/2014-07-09/100701481.html, Accessed 4 August 2014.

14. Sun Zhigang, ‘The catastrophic medical insurance as the key point of improving affordability of health care’, Administrative Reform, 54-7, Dec 2012. Note, Mr. Sun is the director of the health reform office in the State Council.

15. China Human Resources and Social Security yearbook, various years

16. http://economy.caijing.com.cn/20140815/3658675.shtml Accessed 4 August 2014.

17. See Qiu and Huang (2014).

18. Ibid.

19. 14 July 2014. Jiankang news. http://www.jkb.com.cn/management/2014/0714/345844.html Accessed 1 December 2014.

20. http://china.caixin.com/2011-08-15/100291163.html Accessed 4 August 2014.

21. From a recent report in Southern weekend, 6 November 2014, Chinese Hospital Management Association estimates the number of medical malpractice has increased by 22.9% annually since 2002. See http://www.infzm.com/content/105341, accessed 18 November 2014.

22. One example of the quick development is Beijing city. The number of cases was increased by 40% between 2011 and 2012. See http://www.bjsf.gov.cn/publish/portal0/tab68/info14149.htm accessed 18 November 2014.

23. http://news.xinhuanet.com/politics/2009-01/24/content_10713287.htm Accessed 4 August 2014.

24. http://www.chinanews.com/jk/kong/news/2008/10-31/1432502.shtml and http://news.xinhuanet.com/fortune/2008-11/14/content_10355517.htm. Accessed 14 November 2014. From a government guideline for the tasks to be achieved for health reform in 2013, there are 13 ministries involved in the tasks for health reform in 2013.

25. http://www.china.com.cn/guoqing/2013-07/10/content_29379767.htm Accessed 26 December 2014

26. See a report from China Youth Daily about task oriented small leading groups, 10 July 2013. http://www.china.com.cn/guoqing/2013-07/10/content_29379767.htm Accessed 4 August 2014.

27. http://www.chinanews.com/jk/ywdt/news/2006/09-18/791660.shtml Accessed 14 November 2014.

28. China health statistical yearbook, various years.

29. http://news.xinhuanet.com/local/2014-04/17/c_1110290117.htm, Accessed 4 August 2014.