The Governance Structure And Efficiency Research Of The Fund Management Organizations Of The Chinese New Rural Cooperative Medical System

To establish the rural medical security system, the state, in2003, decided to found officially the Chinese New Rural Cooperative Medical System (NCMS), mainly concerning serious diseases. Focusing on the institutional settings, at the central level, the inter-ministerial joint conference of the NCMS formulates the macro policies. While at the province and prefecture level, there is a conciliation panel and an expert technical guidance group. At the county level, there are Managing Committees. Its agencies are responsible for the daily specific issues, and regularly report to Supervisory Committees about the fund management. At present, responding to the vast rural population, the NCMS has effectively supported their daily medical needs. In2012, the national numbers of participators of the NCMS is805million, and the participation rate is over98%.In the developing process of the NCMS, there are financial problems, mendacious information and unreasonable use of funds alike. From governance perspective, the reasons behind the financial problems are the imbalance of the internal control mechanisms. Based on property rights theory and principal-agent theory, this paper researches on the governance structure of county-level fund management organizations of the NCMS. Then, try to find the reasons for the imbalance of governance structure.Firstly, this article makes a systematic analysis on the establishment and institutional change of the NCMS, focusing on fund management system. By recalling the evolution of the major policies of the NCMS, this paper analyzes its four features, including voluntary participation, comprehensive arrangement for serious disease, the overall planning at county level and government supervision and management. As the two basic points, the financing system and compensation system explain the foundation of the NCMS. The individual premium collection methods, financial aid system and financing level support the analysis of financing system. Compensation system mainly consists of the compensation ratio and compensation range. Besides, the fund management system is mainly analyzed from the risk fund system, the secondary compensation system and supervision systemCurrently, on a domestic level, the corporate governance is more efficient than the NPO governance, while the government governance is less developed. Based on this awareness, the research focuses on the position of the core functions of the corporate and the NPO, and their governance structure. After reviews of the relevant laws and representative governance principles, this article fixes the positions and functions of the Board of Directors, Board of Supervisors and the management (Executive Committee). In corporate governance, mode illustrations and comparative analysis have been done between the single Board of Directors and double Board of Directors. Relative to corporate governance structure, the structure of the NPO is more loosely, with few relevant laws and industry regulations. On behalf of the typical governance structure of the NPO, the Red Cross Foundation supplies a great example to learn. Generally speaking, the internal differences of governance structure between the corporate and the NPO has led to clearly indifferent results.Then, this research deepens the analysis of governance structure and governance efficiency in the field of the three main county-level fund management organizations. Government is not only the competent business unit in politics, but also the first important investor in capital. Referring the governance structure of the corporate and the NPO, the Management Committee of the NCMS, owning the decision-making power on management, is actually acting the role and function of Board of Directors. The Supervisory Committee, overseeing the cash flow and its accounts, is acting the role and function of the Board of Supervisors. Agency is responsible for corresponding work as the management (Executive Committee). Based on this, the governance of fund management organizations of the NCMS could learn from the corporate governance and the NPO governance. By analogies among these three parts, the NPO and the fund management organizations of the NCMS have more similarities in market environments, while the idea and design of the corporate governance structure could be valuable guidance.In addition, the paper makes econometric analysis on its governance efficiency. Utilizing the national statistics, there are preliminary analysis on participation conditions and fund usage alike. In this paper, there is a deeply investigation about the situations of the33counties in the mid-west China, who carry the NCMS for years. Most of the counties have the stable and almost the same individual premium level, so the selection of the compensation mode is one of the most important decisions made by the Management Committee of the NCMS. Through cluster analysis, the compensation mode of hospital planning plus outpatient accounts achieves broader beneficiaries and higher reimbursement, than the compensation mode of serious disease planning plus household accounts, when both of them have almost the same reimbursement level on serious disease costs. Furthermore, by selecting the input elements and the output elements, the DEA model conducts a relative efficiency analysis on the overall efficiency and returns to scale among33counties. Overall, the input elements have transformed into the output elements effectively, and more than half of the counties have achieved the state of economies of scale. Namely, in order to achieve broader beneficiaries and higher reimbursement, those counties, who have achieved the state of economies of scale, should perfect its compensation mode and the compensation proportion of specific medical services, but not still increasing its management costs and human capital.For perfecting the governance structure, the paper puts forward some corresponding policy recommendations:(1) Management Committee-refine the internal division, set up specialized subcommittees (2) Supervisory Committee-improve internal supervision, puts particular emphasis on the external supervision(3) Agency-develop the information system, achieve the IT governance governance.