How to develop the private health sectors in China?----a Case Study in Shanghai.

Presenter: Xiaohua Ying, School of Public Health, Fudan Univ., P.R.China

Abstract

Over a period of rapid economic growth, China set up a health system through increased investment in health. A mixed public-private health system provided 2.3 billion outpatients services and 71.8 million inpatients services in 2005. However, China’s private health sectors play a minor role in health system. Private hospitals had less than 5 percent of beds and health personnel respectively. They provided only 2.7 percent of outpatients services, and 2.5 percent of inpatients services in 2005. The less development of private health sectors was considered as one of key factors for the less competition to public health sectors. It is also one of determinates of mismatch between increasing demand for and inadequate supply of safe and effective health care. Shanghai, the largest city of China, had the similar status of private health sectors to others.

This research aim to present the status and issues of China’s private sectors, find the evidence on policy issues regarding private sectors, and develop strategies to address the main challenges in China. The study was based on data from 93 private hospitals and 259 private clinics. About 80 managers of privates sectors were surveyed. We also conducted 3 group discussions and analyzed 7 typical cases.

Compare to public hospital, private hospitals were smaller scale. The average investment capital was less than RMB 10 million, and with less 50 beds. The rate of licensed doctors to nurses is about 1 in private hospitals, and about 2 in public hospitals. Health care quality in private hospital was also worse than that in public hospital. The diagnosis concordance ratio between pre-surgery and post-surgery, inpatients admission and inpatients discharge were 74% and 85% respectively in private hospital, compared to the ratios of 99.9% and 99.8% in public hospitals. Private hospitals also operated with lower bed occupational rate and higher health care prices. The bed occupational ratio was 60% in private hospitals, but 96% in average level in Shanghai. People should pay higher 55 percent cost for one visit to physician in private hospital than that in public hospital, and pay higher 13 percent cost for inpatients services. With respect to low quality and efficiency, private hospitals were difficult to contract with public health insurance. Non-for-profit private hospitals’ quality was better than that of for-profit hospitals. The status of private hospital in China may be highly related with four policy issues: low entry standard for private health sectors, less regulation on quality of health care provided by private sectors, high tax rate for for-profit private sectors, and low percentage of private sectors contracting to public health insurance.

Government should identify the private hospitals’ ownership aligned with hospital’s characters. Donor’s quality, more investment plan, and category of health care provision should be considered in private hospitals’ entry. Punishment regarding with low quality health care and unnecessary care with highly cost should be strengthened. Government should also develop private hospitals, especially non-for-profit private hospitals through financial aid, donor’s reimbursement, and bringing private hospital into regional health planning.