The bonus scheme, motivation crowding-out and quality of the doctor-patient encounters in Chinese public hospitals

Methods of paying health providers have been extensively studied in health economics. Bonus as a powerful incentive has been widely used to boost staff morale and improve productivity in hospitals. This may, however, also create unintended consequences. This study analyzes primary data collected from a physician survey in China and demonstrates that the extensive use of quantity-based bonuses has not only led to the provision of unnecessary care but also crowded out physician’s intrinsic motivations, resulting in a decline in the quality of services. More appropriate physician remuneration mechanisms must be introduced in China’s ongoing health reform. Copyright © 2016 Springer Science+Business Media New York.