A Pareto Improvement for Chinese Healthcare Sector: Enhancing the Role of Community Healthcare in China

Presenter: Qi Cao , Renmin University of China

Abstract

Rationale:
Any healthcare reform measures that undermine any stakeholders’ vested benefits will be unfeasible or at least difficult to implement, especially as healthcare quantity and quality are very sticky in essence, nobody’s situation could be worsen-off while others’ being improved, which is just the core principle of Pareto Improvement. Chinese healthcare reform could be regarded as a systematic Pareto Improvement leading Chinese healthcare sector to ultimate reform objective --- Pareto Optimization. Only if a reform measure is Pareto Improvement, it would be viable. Enhancing the role of community healthcare service (CHS) is a highlighted reform measure in the latest state healthcare reform plan. It is valuable to access its viability and significance from economic perspective.
Objective: This paper aims at answering three questions. First, why it is important to establish and enhance CHS in China; second, whether and why it is a Pareto Improvement; third, how it will contribute and how to maximize its contribution to Pareto Optimization of Chinese healthcare sector.
Methodology: Primary data: depth interviews and three focus group are conducted with stakeholders including large-scale and medium-size hospitals’ presidents and physicians, existing community healthcare center’s managers and physicians, general public and patients, governmental officials of Ministry of Health, healthcare reform and policy scholars, and social investors; Secondary data: Chinese and foreign related literatures, research reports and official statistics.
Results:
1. The paradox persists in China: congested big hospitals (first choice and first stop of most patients is big hospitals even with a common cold) and deficient CHS both in terms of quantity and quality co-exist, which waste resources and undermine efficiency, and result in expensiveness and social dissonance. The deficiency also results in inadequate and inappropriate gate-keeping and prevention mechanism that is to be blamed for prevalence of non-communicable chronic diseases and high outbreak rate of epidemic. .
2. Focus group shows that establishing and enhancing CHS is a Pareto Improvement with overwhelming supporting despite some suspicions from general public about the expertise and competency of community doctors and from physicians that worry about whether their salary would be decreased if they work in community healthcare centers. And the principle that complete competition (market mechanism) will automatically lead to Pareto Optimization is under suspicion, government and market supplement in establishing and enhancing community healthcare is underlined.
3. Establishing and enhancing CHS contributes to more efficient health resource allocation and healthcare work division, more reasonable distribution of patients, better disease-prevention and health education and more customized healthcare service, which will all lead to trade-off between equality and efficiency and better health achievements.
4. It is suggested that 1) A more strong government role in the initiating and promoting stage, while introducing social investment and competition mechanism; 2) developing of general practice as a subject and career; 3) social medical insurance cover CHS for reimbursement as an institutional incentive and guarantee; 4) Incentives for qualified physicians to transfer from hospitals to community.
Conclusion: Enhancing the role of CHS in China is a Pareto improvement leading to Pareto optimization.