Study On The Development Of Hospital Privatization And Government Regulation Reform

Medical industry, a basis of national and social services-oriented industry, has close relationship with the enhancement of the majority of citizens’ life and furthermore it relates to the development of China economy. Traditional Chinese medical and health service system is unified and provided by the public sectors, but this model has been unable to meet the growing medical needs of the majority. The problems include the unreasonable of operation mechanism of public hospitals, high pharmaceutical price and lack of government’s supervision. The immaturity of the new hospital investment and the system for social capitals, and the ineffectiveness of private capital investment are potential issues as well. The needs of enhancing the quality of citizens force the government to solve the above problems by deploying the competition system and developing private hospitals vigorously.China’s medical services have been provided by the Government. This model leads to inadequate market competition, lower hospital service quality and low service efficiency easily. With the improvement of national health needs, these drawbacks reveal prominently. In order to ensure the overall efficiency of the medical industry, followed by the wave of health care reform swept in European, China began to gradually explore to the road of allowing social construction of medication which means private hospitals established are allowed. After discussion whether social capital can enter the medical industry, the State Council issued a document in 2000 to introduce the profit hospital business model. This totally changed the history in the past that hospitals can only have public nature orientation. After that, the Ministry of Health issued documents in 2005 to begin the hospital reformation and the main direction of the reformation is regarding the ownership. It encouraged the introduction of social capital to the medical industry, withdrew state-owned capital gradually, and shifted the focus on basic health care services.With the reformation of hospital privatization been taken place in the past nine years, what is the current status of the private hospital? Do the regulations match the needs of private hospital development? Do the objectives of government regulations on private hospitals being achieved? What are some problems waiting to be solved under government regulation policies? This essay studies integrated performance indicators of private hospitals throughout the country as research objects in order to provide answers to above questions. The number of private hospitals, the efficiency of medical service, the resource of medical and the economic efficiency are the fours aspects established to evaluate the influence of government regulations on private hospitals. Analyzed by using Eviews5.0, the data shows the influences about government policies on private hospitals in their performance indicators. The analysis result shows that the government regulations in policies have promoted the private hospitals in their overall performance. However, the economics incomes of hospitals and the service quality does not have prominent enhancement.The analysis further indicates that even though China has provoked the reformation of private hospital development for nine years, the bureaucracy monopoly is still obvious in the medical industry. It is inadequate to merely encourage social capitals to enter the medical industry as the main method for the restructure of China medical system. The privatization results in misunderstanding for the role-play of government departments, the low efficiency for government monitoring and regulations. The price regulation cannot effectively stimulate hospitals to improve service efficiency and quality. Moreover, the lack of adequate regulations of hospitals caused the medical care system is behind what citizens need. These are what government faces while making the policies. Learning from the thinking and practical experiment of foreign private hospital development, this essay concludes with some policy suggestions for the improvement of the reformation of privatization for public hospitals and for the full-dimension of reforming the government regulation system.