A Study Of The Development Of Private Capital In The Medical System Of China

China's health institute has begun the "marketing" reform along with the economic reform since the 1980s. And private capital gradually gained the access to the market of medical services. In the economic reforms, private capital has played a significant role in the raising of industry and commerce, fully demonstrating its efficiency and vitality. The spillover effects of private competition forced the state-owned enterprises to reform and promote efficiency throughout the economy. People can enjoy a rich variety of goods and services at lower costs. However, after years of reform in the medical area, we did not get the benefit as happened in other industries. The public medical institutions still work with low efficiency and the "Kan Bing Gui, Kan Bing Nan" problem becomes more serious.This paper reviews the background of Induction of private capital into the medical services market, details the policy revolution about private medical institution, examines the development of China's private institution and analyze the role of private institution in the system. Though the private capital enters the market very early, it can't compete with the public medical institutions or promote the development of medical service market.Then, the paper examines the reasons that private capital did not shock the medical service market. The particularity of medical service makes private medical institutions inherently disadvantageous in the competition. The existing medical management system in China is unreasonable so the vested interests hamper the development of private medical institutions. Private medical institutions are treated unfair in the tax and social health insurance policies. In addition, the deficiency of themselves limits their development.Finally, the paper gives policy suggestions on how to promote the private capital in the medical service market. Besides the clinics, outpatient and specialist hospitals which it has involved a lot, private capital could participate in community hospitals and the public hospital reform, deepening its participation in the operation of hospital in order to play an effective role in the promotion of our health care system.