Three Essays on Health Policy and Private Health Care in China

Abstract

This thesis consists of three essays on health policy and private health care in China. Essay 1: Aligning Incentives of Physicians - An Experimental Study of Two-part Tariffs and Separation of Prescription and Treatment in Health Care Markets (with Ben Greiner, Lyla Zhang) The fi rst study experimentally explores whether different provisions in the market (the separation of agents and the separation of prices) can mitigate China's overtreatment problem and increase market efficiency. Based on a credence good model, this study first tests the hypothesis that doctors ·will over treat patients when the patients are able to reject the treatment after they receive their diagnosis from the doctor. Then, the study looks at a separation of agents, a separation of prices, and the interaction of both of the separations, all t hree t reatments are introduced as they can theoretically yield an honest treatment and restore market efficiency. Separating the agents yields stronger effects on the honesty of doctors and the efficiency of treatment than separating prices, and the market-level efficiency loss is minor due to more diagnosis and less overtreatment. Essay 2: The Preference Heterogeneity for Utilisation of Public-Private Health Care in Urban China In the second paper, I evaluate the preference over health care attributes affecting an individual's choice for the utilisation of hospital health care based on a discrete choice experiment from a random sample of respondents in urban China. The results indicate a significantly negative marginal willingness-to-pay for private health care. Hukou, a typical indicator of socioeconomic background, is significantly related to the respondents' preference heterogeneity. Urban residents (urban Hukou) value private health care less, yet rural migrants (rural Hukou) are more likely to be indifferent between public and private provision. China should consider its residents' health care preferences when it attempts to expand the private health care sector in the short term. Essay 3: The Growth of Private Hospitals and Their Health 'Workforce in China (with Yucheng Zhang) (This paper has been published as "The growth of private hospitals and their health 'WOrkforce in China: a comparison with public hospitals, Health Policy and Planning 29, pp, 30-41, 2014,") The third study investigates the outcomes of the market-opening policies for health care services since 2000, The longitudinal data of hospitals in China is analysed by a segmented regression to detect the growth of private hospitals, Two panels of healthcare workers are examined to identify their mobility from the public to the private hospitals, The number of private hospitals has rapidly increased after 200L About a quarter of the physicians in private hospitals are over the age of 60. Specific features of the hospital-physician relationship in China may account for the unbalanced age distribution that is featured among doctors and the mobility of the healthcare workforce in private hospitals.