Private Vs Public Hospital

4.1 Evidence Gap for Quality of Private vs. Public Hospitals

China’s 2009 health reform has made impressive progress in expanding insurance and public health coverage, but it has not yet fundamentally changed its public-hospital-dominated health delivery system despite widely-reported problems in quality and efficiency. Since 2011, the government has prioritized county hospital reform in an effort to seek breakthroughs in its hospital sector reforms. Concurrently, the new wave of reform encouraged private investment in hospitals partly in order to promote public hospital reform by creating competition from the private sector. Consequently, the government has gradually relaxed restrictions on private hospitals in terms of health regional

All of those methods have a major flaw in that the measurement depends on indirect information that may not accurately and adequately represent the actual practice. This study instead will use unannounced standardized patients (USP) to measure the technical quality of actual practice.

The Standardized Patient (SP) is a healthy person trained to “consistently” simulate the medical history, physical symptoms, and emotional characteristics of a real patient. The SP, particularly the unannounced visit of SP (USP), has several reported advantages in assessing QoC as opposed to the traditional methods: 1) reliability in measurement and cross-provide comparison because the “same patient” is presented to all providers ; 2) elimination of the “Hawthorne effect” due to the nature of disguised and unannounced visit by SP ; 3) reduced recall bias particularly when the encounters are voice recorded; and 4).SPs can give quality information that the traditional sources can’t provide such as the quality of case history, the physical examination and counseling activities. However, despite those advantages the application of SP in China has concentrated

Figure 1 illustrates one theoretical model that explains the possible pathway of how the ownership type may influence QoC: 1). As China’s public hospitals are not fully financed by the government, hospitals regardless of ownership types may have strong incentives for profits; 2). the institutional incentive for profits may translate to individual motivations for profits; 3). The institutions and the individual clinicians have three major tools for profit: generating tests, medications, and procedures; 4). In a prevailing fee-for-service outpatient setting, in order to generate more revenue, the institution and the individual clinicians may sacrifice quality for more quantity (for example generating unnecessary tests) or improve efficiency to maintain quality and profits; 5). The ownership type may affect this pathway in that the private ownership because of its share-holder mandate for profits may have a stronger incentive for profits than the public hospital which at least in theory has a social mandate – the stronger incentive for profits may lead to inferior quality if the efficiency does not change; however, the private nature may also make the private hospitals more efficient than the public ones; the higher efficiency may enable the private hospitals to generate larger revenue while maintaining quality.