Resources Allocation and Utilization Efficiency in China’s Healthcare Sector

Wang Junhao and Jia Wanwen ()
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Wang Junhao: Professor of China Government Supervision Research Institute of Zhejiang University of Finance and Economics, and Doctoral Supervisor of Industrial Organization and Enterprise Organization Research Center of Dongbei University of Finance and EconomicsBeijingChina
Jia Wanwen: Doctoral candidate, Research Center of Industrial Organization and Enterprise Organization, Dongbei University of Finance and Economics. BeijingChina

China Finance and Economic Review, 2021, vol. 10, issue 2, 88-109

Abstract: The reasonable allocation of healthcare resources across different levels of healthcare facilities is the key to promoting the tiered diagnosis and treatment approach. The sudden outbreak of COVID−19 underscores the shortage of resources and service capability of China’s primary healthcare facilities. From the perspective of the vertical division of labor in the healthcare service system and based on the quality adjustment and quantitative correction of healthcare workers, this paper comprehensively calculates and analyzes the evenness of resources allocation between hospitals and primary healthcare facilities; and then, combining the theoretical model derivation with China’s empirical data test, this paper demonstrates how the misallocation of healthcare resources affects their utilization efficiency. The results are as below. (1) There are varying degrees of quantity and quality imbalance in various healthcare resources between hospitals and primary healthcare facilities. (2) When other conditions remain unchanged, the more misallocated healthcare resources are, the lower the “actual” utilization efficiency after quality adjustment is. (3) Compared with the absence of price regulation, government price regulation has led to a relative “overtreatment equilibrium” in the healthcare service market. Therefore, measures should be taken to optimize the structure of healthcare resources allocation and improve the efficiency of resources utilization, such as strengthening the government’s healthcare financing function, formulating policies that favor primary healthcare facilities, and encouraging social capital to invest at the community level.

Keywords: healthcare resources; fiscal investment; resources misallocation; utilization efficiency (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:bpj:cferev:v:10:y:2021:i:2:p:88-109:n:6

DOI: 10.1515/cfer-2021-0012

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