Reforming how physicians are paid in Chinese public hospitals: The bonus scheme, motivation crowding-out and the doctor-patient relationship

Research output: Contribution to conferencePaper

Abstract

China is currently in the midst of carrying out an ambitious national health care reform to overhaul its heavily deteriorated health system and build a universal replacement by 2020. A multitude of misaligned incentives created in the past three decades have powerfully altered the behavioral patterns of Chinese health care providers towards profit-seeking. Overprescribing pharmaceuticals, diagnostic tests and expensive procedures are rampant in public hospitals. Among other explanations, low income and high-powered bonus schemes have been found to be the key drivers behind physicians’ various perverse behaviors. Recent years have seen a rising recognition of the importance of payment reforms. Alternative payment mechanisms such as capitation, global budget and case-mix have been increasingly used in many localities on a pilot basis to pay hospitals. Positive effects have been found. Little is known, however, as to how individual physicians should be paid. This study investigates a new experiment in the Fujian Province that changes physician compensation from a low basic salary+high bonus to an annual salary system that pays physicians higher salaries. It is expected to reduce physicians’ strong profit-seeking incentives. Does this work? How do physicians respond to new incentives? What are the implications to China’s ongoing health care reform? This study uses a qualitative approach to answer these research questions. It contributes fresh evidence to the health policy reform in China and beyond.
Original languageEnglish
Publication statusPublished - Sep 2015

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Doctor-patient relationship
Public hospitals
Bonus
Physicians
Crowding out
Incentives
Salary
China
Profit
Health care reform
Payment
Experiment
Policy reform
Health care providers
Replacement
Diagnostic tests
Low income
Locality
Pharmaceuticals
Case mix

Citation

He, J. A. (2015, September). Reforming how physicians are paid in Chinese public hospitals: The bonus scheme, motivation crowding-out and the doctor-patient relationship. Paper presented at the Australian Social Policy Conference: Rights and entitlements in times of austerity, University of New South Wales, Sydney, Australia.