The Study Of Differences In Provincial Government Health Expenditure In China

Since the reform and opening-up, the government increases their investment to public health year by year. However, since the medical health system transformed from government leading to shared by the government, society and individuals, there were significant differences among provinces in terms of basic medical and health services and regional government’s expenditure on public health. Since the outburst of SARS in 2003, the government paid high attention to public health. However, the gaps remain significant in recent years. Public health service belongs to the public goods that have nature of welfare, so everybody has the right to enjoy roughly equal public health services. It contributes to the whole people’s health, the quality of human capital and social justice by doing research on the status of different regional government expenditure on public health and exploring the causes.This paper selects data from 2003 to 2012 to analyze the current situation of different regional government expenditure and its evolution and then further explore the causes of differences by quantifying the contribution degree of various factors using Shapley value method during the transformation of economic structure. We have obtained some conclusions through collecting and organizing data. First, while the whole government expenditure on public health per capita increases year by year, the absolute differences among provinces is increasing and the relative gap is narrowing. Second, government expenditure on public health changes lesser in the medium level areas and much more in other areas. Third, dividing China into east-middle-west region, the government in the middle region spend least on public health and the gap is further widening compared to the east and west region. Analyzing the causes of different expenditure on public health among different provinces, we find that the difference of economic development is the most fundamental reason, followed by fiscal decentralization, environmental pollution, number of medical beds and the degree of education. On the other hand, the results of the Shapley value decomposition show that the transfer payment indeed contributes to the narrowing of gaps among different provinces, moreover, the price of medical and health service, the budget deficit and the birth rate also help. Based on data analysis and the empirical results, we ended this paper by putting forward some relevant policy suggestions from the view of narrowing economic gaps, enhancing fiscal decentralization level and introducing more policy support to the middle region of China, improving transfer payment system and continuing to implement a proactive fiscal policy.