Health Care Reform "expensive" Problem Of Economic Analysis And Health Care Reform Policy Orientation

The medical system reform is a difficult issue all over the world. Every country in the world is continuously pushing forward its domestic medical reform progress. Since China's founding in 1949, especially since the implement of reform and opening-up policy in 1978, China has experienced more than 20 years of reform in its medical system. But in reality, the medical system is becoming incompatible with China's current economic and social environment, which is accentuated by the rising medical cost. According to the report issued jointly by the Development Research Center of the State Council and WHO in July 2005, China's medical reform so far was not successful. It is believed that the failure was caused by the market orientation of the reform. The issue raised social discontent and became a focused topic. The thesis addresses the issue of rising medical cost with an economic perspective and provides solutions, investigating from various angels, including demand and supply analysis of medical and insurance market, the choice of government and market, and the setup of medical and insurance system.One of the originality of the thesis is its treatment of China's medical reform using economic tools. The thesis is separated in three sections. Section One gives an overall picture of China's medical reform progress and evaluates the achievements and failures. Also it lists some of the research results in this areas and compares some experiences from other countries. Chapter Four to Chapter Seven constitutes the main body of the thesis. It addresses the issue of rising medical costs, introducing economic tools such as supply-demand analysis, monopoly model, economics of public sector, and insurance theory. The research investigates in three areas. First, it investigates the contradiction between the public goods property of medical service and the market orientation of medical reform. Second, it shows, through supply-demand analysis, that the monopoly situation in supply side of the medical service market is the main reason for the paradox of the rising aggregate expense and falling medical consumption. To make matters worse, the difference in income allocation causes further discrepancy of individual's fulfillment of medical demand. Third, it investigates the triple relationship in the medical service market and exposes the pitfall of the current basic medical insurance system. The thesis concludes that the above three aspects are the main reasons for the excessive medical burden for individuals and provides solutions for it:alter the market orientation of the reform, regulate the way of government intervention, and in the current medical insurance system, make the best of individual account in its effectiveness and compensate for its deficiency in fairness.