Effects of the New Health Care Reform on Hospital Performance in China: A Seven-Year Trend from 2005 to 2011

Jay J. Shen, Shoujun Zhou, Lin Xu, Jiaying Chen, Christopher R. Cochran, Erica R. Fisher, Shoujun Zhou

Abstract


Background: Since the market economy reform healthcare expenditures have escalated in China, especially out-of-pocket payments. A new policy intervention begun in 2005, aimed to reshape the health care system.

Objectives: To examine effects of the new health care reformon hospital performance and patients’ economic burdens in China, and provide evidence of the need for further public hospital reform in China.

Methods: Discharge records from 2005-2011 in a tertiary cancer hospital were abstracted. Changes in total charges, revenue structures, length of hospital stay and illness burden of patients were analyzed.

Results: During the seven-year period, total charges per dischargeincreased at a cumulative growth rate of 7.0%, which was far slowerthan that of the local GDP (105.9%). The hospital volume increased by 138.9%, annual revenues grew by 206.4%, and average length of stay declined by 28.4%. Prescription drugs accounted for 60.2% of the revenues. The ratio of total hospital charges to the per capita annual disposable income decreased from 1.38 to 0.84, and the percentage of out-of-pocket payment was reduced by 20 percent. Similar trends were observed in the national statistics.

Conclusions

The new health reform policy showed positive effects on alleviating both hospital operation and patients’ economic burden; however, only short-term effects on containing the increase in total charges of hospitalization were observed. The highest proportion of hospital revenues was generated from prescription drugs, and the lowest proportion from bed fees and nursing fees which remained virtually unchanged. More effective approaches are merited to adjust hospitals’ revenue structure and make hospital care more efficient.


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References


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