Externality Analysis Of Medical Expenditure At County Government

The county government is the foundation of our country's government organization system,and the county finance is the important financial guarantee for the grass roots government to exercise its functions,improve the public services and promote the regional economic development.However,in the process of financial operation,attracting capital,labor and other liquidity resources and seeking political promotion is an important consideration for county government to make fiscal expenditure decision which,intergovernmental fiscal expenditure competition plays a significant role,but also an important basis for planning the expenditure of county government.Especially with the deepening of the decentralization reform and the establishment of GDP as the core of the performance evaluation system,the county government has further intensified the horizontal comparison and competition.At the same time,due to the limited role of the economy in the short term and not the hard constraints in the political assessment,education,for health care and other external public goods which the county government assumes the main responsibility for the expenditure,the county government can also enjoy the "free rider" to enjoy the spillover costs in neighboring areas.Therefore,under the background of increasing demand for medical and health services,the empirical test of county government health expenditure externalities and the mechanism has important practical significance to regulate government expenditure,optimize the expenditure responsibilities and promote the coordinated development of regional economy.Therefore,based on the analysis of the related system of medical and health expenditure at the county level in our country,this paper firstly uses the method of spatial measurement to check the existence of externality of medical and health expenditure at county level.Based on the "Geography + Administration","Geography+ Economy" matrix and the method of adding the vertical constraint variables,the model uses the method of System GMM to carry on the empirical research on the national health expenditure data of county government in 2002-2006 and 2009-2014 in Shandong Province.The results show that,in the same period,for the counties in the same prefecture level cities or with similar economic development level,the fiscal expenditure competition is the main way of mutual influence among the county governments;from the perspective of intertemporal,due to the constraint of budget and the public goods attributes of medical service,the spillover effect of health expenditure exists between the county governments with similar geographic distance;in addition,the vertical constraint variables represented by the transfer payment of the higher authorities and the expenditure of health care have a significant impact on the county health expenditure.In order to further identify the mechanism of competition between health expenditure in county government,this paper introduces the way to add the dummy variable of the year of cancelling the agricultural tax and the new National People's congress,and studies the competitive behavior in the end is derived from the financial competition for liquidity resources,or based on the "top-down" yardstick competition mechanism.The results show that both of them play a role in the financial operation of the county government,among which the "top-down" scale competition mechanism is more intense.For Shandong,such as.the economic province,its competition is more intense.Based on the above analysis,we can find that the competition between governments has gradually expanded from the economic field to public health services,such as health care,and under the background of the difficulty of the county financial operation,the state of full competition will further increase its expenditure pressure.Thus,this paper puts forward the following policy recommendations:First,further refine the medical and health expenditure projects,and actively through the government to purchase services,PPP,etc.to introduce the market mechanism to ease the difficulties of county finance;however,it is worth noting that we should further strengthen the supervision of government financing behavior,prevent the distortions of local financing behavior,including PPP disguised borrowing,financing platform resurgence,in order to promote "sustainable financing." Second,it is important to improve the division of responsibilities between governments at all levels of medical and health expenditure and the proportion of government at all levels should be strictly defined in the form of law to reduce the discretion of the county government spending and improve the financial capacity of county governments.Third,we should improve the transfer payment system and its regulatory mechanism,according to the actual financial capacity and needs of the county,allocate the transfer payments rationally,and improve the transparency of transfer payments,in order to strengthen the county government's financial security.Fourth,we should improve the performance evaluation of local officials,regional synergistic development and other related supporting system,so as to realize the all-round,multi-level coordinated development of the county governments at all levels of,promote county finance sustainable development,and accumulation force for the promotion of urbanization and the building of a moderately well-off society.