The impacts of China's drug price zero-markup policy on medical expenditures and health outcomes

Julie Shi, Lirong Liang and Manqi Hou

China Economic Review, 2023, vol. 79, issue C

Abstract: Drug overuse and high drug expenditures have long been of concern in China. In 2012, the Chinese government implemented the drug price zero-markup policy (ZMP) to contend with these problems. This paper investigates the impact of the ZMP on the hospitalization expenses and health outcomes of inpatients, using administrative data from Beijing. The findings show that the ZMP reduces inpatients' medicine expenses by an average of 20.4%, while total hospitalization expenses do not change significantly. The findings also show that the average length of hospital stay increases by 0.588 days. The results jointly indicate that hospitals adopt substitution behavior to make up for the drug revenue loss. The paper finds no evidence that the ZMP has a negative impact on patients' probability of death or readmission.

Keywords: Medical expenditure; Drug price zero-markup policy; Drug overuse (search for similar items in EconPapers)
JEL-codes: I10 I11 I18 (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1043951X23000342
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:79:y:2023:i:c:s1043951x23000342

DOI: 10.1016/j.chieco.2023.101949

Access Statistics for this article

China Economic Review is currently edited by B.M. Fleisher, K. X. D. Huang, M.E. Lovely, Y. Wen, X. Zhang and X. Zhu

More articles in China Economic Review from Elsevier
Bibliographic data for series maintained by Catherine Liu ().