The Optimization Governance Structure Of China’s Public Hospitals

Since the 1980s, due to the inefficiency of public hospitals, the poor quality of service, and the serious conflicts between doctors and patients, the developed countries have started to reform the governance of public hospitals. In 1990s, this wave came as expected to China which was less successful in health care reform. Influenced by the experience of many foreign public hospital’s reform, health sector and had an argument on whether the reform of public hospitals should be market-oriented or not, and there’s no conclusion. The reform of public hospitals in China is at the crossroads.The key reason why China’s medical reform was unsuccessful is that failing in constraining the doctor’s moral hazard. Under the theoretical framework of corporate governance, combining the features that the public hospitals lost the residual rights of control, this paper committed to research the governance optimal path. Many scholars did a lot of research about the governance structure of public hospitals, but most of them focused on the external governance structure optimization, this study is about the internal governance structure optimization. After optimizing the internal structure, medical suppliers’moral hazard can be controlled. That’s a more effective way to promote the reform of public hospitals.The main content of the whole thesis was divided into three parts:the first part and the second part were the theoretical basis of this article. The first part consisted of two elements, the doctors’moral hazard and the corporate governance structure. The doctors’ moral hazard mainly elaborated the condition of doctors’moral hazard behavior in the agency relationship; and after the review of the corporate governance theory, the principle of optimization of the structure can be summarized, that was the unity of residual rights of claim and residual rights of control. The second part consisted of three elements, the special nature of non-profit organizations, the analysis of the behavior of the medical staff and optimization of the public hospitals’governance structure. Through the research of the particularity of the non-profit organization, this thesis tried to explain the biggest difference between the public hospitals’governance structure and corporate’s governance structure, which was the lack of residual rights of claim in public hospitals; Analysis of the medical staff’s behaviors including doctors’dominant, the doctor’s behavior characteristics and the role of other stakeholders; on this basis, the optimization of the governance structure of public hospitals can be formulated. The third part was the case study. After reviewed the the specific hospital’s reform process, analyzing the success factors of the reform, summarizing the lessons when it has returned to the mainstream, and the making an conclusion that:firstly, implementing the power of the chairman, secondly, establishing a reasonable internal governance structure. The reasonable internal governance structure includes a set of three mechanisms:First, ensuring the peer-to-peer rights and responsibilities of the doctor and the nurse. Second, establishing a reasonable incentive and evaluation mechanism. Third, establishing an internal control mechanism.In this paper, theoretical analysis and case analysis was used. Through the literature review of the research, started with overcoming doctors’moral hazard problem, under the framework of governance theory, we can considered that the essential issues of the reform of public hospitals was the set of hospitals’internal governance structure, and through the theory analysis and case analysis, a conclusion can be made. That was, in the premise of the implementation of the power of the chairman, the public hospital internal governance structure optimization lied in peer-to-peer rights and responsibilities of doctors as far as possible, and supported by reasonable incentive mechanism, assessment mechanism and internal control mechanisms.