Healthcare Provider Payment And Healthcare Price In China

Healthcare provider payment method is the mechanism for transferring financial resources from the payers of health services (the government, insurers, and/or others) to the healthcare providers. Depending on when payment rates are actual set, the method could be defined as retrospective payment or prospective payment. Depending on paying standard, there are five main payment methods, including salary/, fee-for-service, capitation, case-based payment, global budget. As a method of incentive regulation, properly payment method could cause provider reduce the cost. However, healthcare provider payment method is one of the key issues in the whole healthcare system, which could affect healthcare price huge. Of the variable reasons, since 1978, healthcare expenditure of China has grown rapidly. Equity, efficiency and access to medical care are affected seriously, which be called as"Kan bing nan, kan bing gui". For that, economics in China have do many research, but little of them emphasize on paying physicians.This paper selects the relation of healthcare payment methods and healthcare price in China as the research object, analyses how the healthcare payment methods affect the cost of healthcare providers. The core theory here is principal-agent theory. Based on the"incentive contract", the functions of payers and providers are set, and finally we could know the function of healthcare price in a two-time game, which is determined by the payment methods. Also, the empirical model of China shows that the payment method is a key element about healthcare price. So in the process of medical care service market reform in China, more emphases should be put on the healthcare payment methods. Prospective payment methods like caption, case-based payment, and global budget should take place of retrospective payment like fee-for-service. At the end of the paper, some suggestions are put in the condition of China.