On The Hospital Performance Improvement

In the 1980s, under the government support, healthcare insurance system and health care service delivery and provision system are built in developed countries to ensure the right of public's access to the healthcare service. To maintain the equity of the access to healthcare service, the government will face a great fiscal financial pressure. In many developed countries, substantial private sector activities in healthcare provision to improve hospital performance. Every country faces the problem of institution arrangement of hospital performance improvement.Since the early of the 1980s, under the pressure of the shortage of fiscal financial, and the poor performance of public hospital, Chinese government took the measures of the reform of public hospital property right and the private hospital involved in the financing, delivery and provision of healthcare services. The goals of reform are to decrease the fiscal finance pressure and to improve hospital performance. However, the hospital performance is still poor after the reform in China. Facing the problem of hospital performance improvement, this paper discuss the form that fit for the hospital performance improvement based on the property right theory and transaction cost theory according to the particularity of hospital performance improvement. After trading off the transaction cost of different institution arrangement, the theory and practice information can be obtained for the choice of healthcare organization. Furthermore, the paper can remind the policy constitutor of avoiding to privatize completely blindly or to control under government directly simply. Healthcare reform must follow the rule of the healthcare service market transaction. Based on the form of hospital ownership, the market and regulation must be combined to improve the hospital performance. This paper can provide the basic idea of establishing policies by the government sector.According the background information and the goals, this study includes the contents as follows:Chapter one does a theoretic preparation for the whole thesis. This chapter discusses the background and the significance of hospital performance improvement. Literatures of the studies about hospital performance improvement are concluded. Then the content, method, innovation and deficiency are illustrated.Chapter two is about the general theory analysis of ownership, market and regulation arrangement. This thesis discusses the influence of ownership incentives and the firm governance structure. Based on the transaction cost theory, the role of transaction cost is analyzed during the discussion of the choice between the firms and market organization, and between the market and the regulation organization. Then the different institution arrangements are compared by the models of contestable-measurable matrix and the models of frontier of the institutional possibility.Chapter three analyzes the characters of healthcare services market. The institutional arrangement of the hospital performance improvement is dependent on the particularity of the healthcare service market. The typical characters are the incomplete information and the principal-agent relationship. In the healthcare service market, hospitals have the market power, non-price competition and contestable. Healthcare service is the public goods that have externality. At the same time, it is the private goods that are rival and exclusive.Chapter four illustrates the theory framework of institutional arrangement of hospital performance improvement. This chapter emphasize the external approaches have the special role for hospital performance improvement by comparing the internal approaches with the external approaches. Furthermore, it discusses the roles of market incentives and regulation constraint, and illustrates the relationship between the market and regulation. Based on the discussion of incentives of ownership for the hospital performance and trading-off between the market and the regulation, this chapter states the institutional framework that benefits for hospital performance improvementTaking the examples of America and England, Chapter five concludes the international experience of institutional arrangement of improving hospital performance. To improve the hospital performance, each country took different policies. Based on the practices of American and British institutional arrangement for hospital performance improvement, this chapter concludes the experience that can be used for reference by China.Chapter six discusses the institutional arrangement of hospital performance improvement of China. After retrospection the history of healthcare reform simply, this chapter analyses the puzzles of the reform of healthcare service provision in China. Considering the incentives of ownership, the forms of hospital ownership and public hospital governance structure should be considered. Furthermore, the model that market and regulation are combined and the institutional framework are designed.Based on these above, the conclusions can be summarized as follows:1. Hospital performance improvement is the basic precondition that publics access to healthcare service;2. As the healthcare service market has varieties of incompletion, hospital performance improvement is special.3. The basic principle of the institutional arrangement of hospital performance improvement is the transaction cost minimization.4. The perfect law and high efficient regulation are benefits for the hospital performance improvement through the market mechanism.5. The competition level must be considered when hospital performance is improved by the market competition.6. The institution arrangement of hospital performance improvement of China should be framed based on the transaction cost minimization.This paper bases its analysis on the approach of theory and practice combination, positive statement and normative statement combined, and the approach of institutional analysis.The main innovations of the paper can be summarized as follows:1. The institutional arrangement of hospital performance improvement is deeply analyzed by the theory of property right and transaction cost. In China, most studies about the hospital performance improvement are from the management science, not from the institutional economics. This topic is also a new area in other countries.2. The paper illustrates that the different institutional arrangement of hospital performance improvement is chosen by the character of healthcare service. Because the combinations of contestable and measurable of varieties of healthcare service market are different, this paper holds that the healthcare services must be classified by the combinations of contestable and measurable when the institutional arrangement of hospital performance improvement is chosen. The policy should be different according to classification. Doing so, the blindness can be avoided when government implement the hospital reform.3. The model has been built based on the combination of ownership, market and regulation. To improve the hospital performance, the formation of hospital ownership is often adjusted, and market mechanism and regulation must be traded off by the reform policy in developed country. Given the ownership of hospital, government may be inclined to regulation during some special period, but next they may lay particular stress on market competition. The result is that the hospital performance is improved incompletely. Therefore, this study gives a suggestion that the model of complete hospital performance improvement is built based on the formation of ownership, and the combination of market mechanism and regulation.4. The paper states that the hospital regulation policy must be 'pluralistic'. The transaction cost of different institutional arrangements is related with the development of market, the efficiency of regulation and the level of organization management. On the one hand, the market is more developed and the regulation is more efficiency in developed areas than the underdeveloped areas in China. Therefore, the government should implement the responsive regulation policy according to the character of 'pluralistic' when they constitute the policies. On the other hand, the level of each hospital management is different, the hospital development is also 'pluralistic', and thus the policy of regulation must be different among hospitals.