Research On The Determinants And Control Of Health Care Expenditure In China

With the development of medical system's reform the health care expenditure (HCE) in our country is increasing faster and faster since 1980. Health care service is getting more and more expensive and difficult to obtain for our residents. The report provided by the centre of development and research of Chinese government in 2005 has said that the medical system's reform was not successful as a whole in our country. This has brought a hot discuss about how to reform our health system. What has brought the rise of HCE in our country? How to choke back the unreasonable increase of HCE? How to design a health system which can give the same attention to the two things—equity and efficiency? All the questions are not only an economy issue but also a social one.The determinants of HCE in China are divided into reasonable parts and unreasonable parts. Therefore, the rise of HCE has included reasonable parts and unreasonable parts. The control of HCE accordingly includes the support of reasonable parts and the choking back of unreasonable one.Firstly, a theoretical and empirical analysis about physician-induced demand (PID) in our medical market has been provided. The analysis indicates that it is the reduction of government finance to hospital, the policy of supporting hospital by medicine overpricing and the doctor's information predominance that has caused PID. PID is one of the most important long-term and steady-going factors which raised HCE in our country. Because PID leads to unreasonable and irrational rising of HCE, we should reform and redesign our medical system to control it.Secondly, the multi-factors empirical analysis about the rise of HCE has been brought forward. The economic growth, population aging and urbanization level are also the long-term and steady-going factors which raised HCE in our country. However, the rise brought by these factors is the embodiment of our society advancement and living quality improvement. So the rise of HCE brought by these factors is reasonable and rational and we should support it by extending health care supply. This dissertation has distinguished reasonable rise from unreasonable rise of HCE. And this is different to the general and total research. Moreover, both the progress of medical technology and medical insurance are not the long-term and steady-going factors.Thirdly, in order to choking back the unreasonable rise of HCE brought by PID, the main health care payment systems has been compared in one game model. Then, on the basis of the utility functions of the demand side, the supply side and third party, a first best payment system has been provided to eliminate moral hazard and self-selection from doctors by game theory and principal-agent theory. The payment system , acting on routine information available , is very simple and suitable for those inefficient country and region.At last , in order to support of reasonable rising of HCE and meet the reasonable demand , we should insist the principle of our health care system reform which includes"equity first"and paying equal attention to the government and market. Then, some advices about how to adjust our micro-health-system have been provided.