Research On Contractual Regulation Of Grassroots Medical Organization: From The Angle Of Relational Contract Theory

Background:Now the contract between health care's provider and purchaser, as a regulatory tool to improve health care system's performance, are widely applied in many countries. Contract is a typical phenomenon of law, but the contract between health care's provider and purchaser seems to be out of law's jurisdiction. And the contract's contracting, fulfilling and dispute resolution are much different from those of civil and administrative contract, with which we are familiar. The theoretical explanation of the above problems is very meaningful to devise effective regulatory contract.Targets:Based on literature study and on-the-spot investigation, and with the view of relational contract theory, this dissertation has analyzed NCMS contract's contracting, fulfilling and dispute resolution, and clarified this contract's nature, especially this contract's relation with the present legal system.Methods:Provided with this research's characteristics and demands, the main research methods are qualitative. This dissertation's author has systematically searched the concerned literature, especially those about the UK's internal market reform, and analyzed them with the method of content analysis, aiming to find out a useful framework to analyze China's NCMS' contract.Through on-the-spot investigation, the author has also clarified the whole process of NCMS contract's contracting, fulfillment and dispute resolution in Dangyang county, Hubei province. The investigation methods include personal in-depth interview, nominal discussion and material collection. The interviewees and discussion participants mainly include those responsible for NCMS in the local health authorities and designated medical organizations.The author has also collected many contracts in China's different parts and analyzed their contents to find out their differences and similarities.Results:1. The relational contract theory is in fact an analysis method about contract rather than a theory dealing with a particular kind of contract. Any transaction is embedded in the social relations between the contracting parties, and the transaction is not only affected by the contract itself, but also by the social relations between the contracting parties. And that means the context in which the contracting parties are embedded is at least as important as the contract itself. The relational contract theory' s ultimate goal is to modify the classical contract theory, which neglects the above social relations. So we have to analyze the social relations between contracting parties when we analyze NCMS contract.2. Now the economists and management scientists' studies on relational contract focus on enterprise network. Some scholars regard the enterprise network contract as all relational contracts and their explanation is totally based on cost-benefit analysis. And they neglect the social relations between the contracting parties. For example, the hierarchies between provider and purchaser in NCMS is the typical embodiment of social relations. The pure economic research path dose not accord with the relational contract theory.3. The context of enterprise network is totally different from that of NCMS context. The contracting and fulfilling mechanisms of enterprise network contract are not universal. For example, selective contracting does not exist in NCMS, and reputation and trust do not exist in NCMS contract's fulfillment. It is the administrative sanctions from health authorities that force the provider not to dare to violate the NCMS' s contract. So the most important fulfilling mechanism of NCMS contract is hierarchies between purchaser (health authorities) and provider (the designated medical organizations). And just because of the hierarchies between purchaser and provider, cooperation, another relational contract's fulfilling mechanism, is obvious in NCMS contract. Additionally, the clauses in the NCMS contract are often neither tight nor professional, which surprisingly haven't caused serious consequences. I think the only reasonable explanation is that as the low level in hierarchies, provider probably carry out opportunistic behavior, but it dare not use the contract's loopholes to extort purchaser, i.e. its superior, the health authorities.4. The NCMS contract disputes usually are inappropriate to be resolved by the third party, which has been proved by NCMS' s practices. From the view of new institutional economics, enterprise's owner has the residual claim and control. As the agent of enterprise's owner, the senior executives are the supreme judge to the disputes between different departments inside enterprise. Although both purchaser and provider have the corporate capacity and the relation between them is not integration, but the hierarchies exists between them throughout. Health authorities can be regarded as the agent of state, which enjoy public hospital's residual claim and control (according to its legal nature as non-profit organization, the state allow that public hospital could keep its residue for its development). So the health authorities itself is the supreme judge of NCMS contract's disputes, which is unnecessary to be submitted to court.From the sociological view, the relations between public hospital and health authorities depend largely on the relations between the personnel responsible for the NCMS in them. As an important social capital, the above personal relations are not only beneficial to hospital's administrators, but also beneficial to the public hospital and even the medical system's operation. Submitting the NCMS contract's dispute to court will surely damage the personal relations. So legal judgment is not the best way to resolve the disputes.From the administrative law's view, NCMS' s contract accords with the definition of administrative contract. Professor Yu Lingyun, China's top scholar in administrative contract, argues that litigation is perhaps the most important resolution of administrative contract disputes. But the results of our theoretical and empirical research are inconsistent with professor Yu's opinion. I think the reason lies in the typical cases selected by professor Yu, and all the relations between contracting parties in the selected cases are not hierarchical.Conclusions:Professor Ian. R. Macneil' s relational contract theory is a very useful framework to analyze NCMS contract. NCMS' s contract is deeply embedded in hierarchies rather than market. The tool to organize the transaction between purchaser and provider is hierarchies rather than market. NCMS contract is the instrument to optimize the hierarchical administration, not that to organize transaction based on market. And that is the reason why the UK's contract between health authorities and public hospital is called non-legal contract, internal contract and even pseudo-contract, and the UK's law prescribes that court should not accept or hear this kind of contract's disputes and the health minister is the ultimate arbitrator of these disputes.Suggestions:We should be very cautious to talk about the abolition of public hospital' s administrative grades when we discuss separating public hospital from government. Before we can find more effective management tool, abolishing public hospital' s administrative grade would make government unable to manage public hospital and even make public hospital out of control. In the past I thought the contract between the health authorities and hospital could replace administrative order and achieve the separation of public hospital' s management and running. But my research proves that what make the contract operate effectively is to a large extent the hierarchical relations between provider and purchaser.Western scholars' opinion that health care is non-contractible does not mean that contract could not work in the respect of medical quality' s regulation. In fact non-contractible means it is very difficult to devise comprehensive contract to regulate medical quality. But we can prescribe the indicators of structure, process and outcome quality about health care based on the present focus of medical quality regulation, and devise the effective incentive mechanisms accordingly, so we can achieve the goal of health authorities' medical quality regulation.