Effect of healthcare system reforms on public hospitals’ revenue structures: Evidence from Beijing, China

Lu Gao, Leiyu Shi, Qingyue Meng, Xiangrong Kong, Moning Guo and Feng Lu

Social Science & Medicine, 2021, vol. 283, issue C

Abstract: To reduce the heavy reliance of public hospitals on drug sales and use of advanced technologies and to contain the escalating medical expenditures, Beijing implemented two rounds of comprehensive public hospital reform in 2017 and 2019, respectively. The first round focused on separating drug sales from hospital revenue (reform1), and the second round extended to include zero markup on medical consumables and price adjustments for medical services (reform2). To estimate how these two rounds of reform have affected public hospitals' revenue structures, we used observational data of medical revenues from 2016 to 2019 covering 354 healthcare facilities. A Panel-interrupted time-series (PITS) model was used to analyze the effects. The results suggest that the reforms have changed the structure of public hospitals' revenues. The proportion of drug sales in hospital revenues fell from 43.96% in 2016 (pre-reform) to 34.08% in 2019 (post-reform); the proportions of medical consumables decreased by 0.73% after reform 2; and the proportion of medical consultation service fees increased from 15.16% in 2016 to 24.51% in 2019. PITS analysis showed that the proportion of drug sales dropped by 5.46% in the month of reform 1, and it dropped by 0.20% per month on average after reform 2(p < 0.001). The proportion of medical consumables decreased by 0.04% per month on average after reform 2 (p < 0.001). The proportion of medical consultation service increased by 7.13% in the month of reform 1, and it increased by 0.14% per month on average after reform 2(p < 0.001). Similar trends were seen in hospital revenue structures from both inpatient services and from outpatient and accident and emergency services. Thus, Beijing's reforms successfully contained rising medical expenditures and optimized hospitals' revenue structures. These reforms can provide a reference for further public hospital reforms in China and other countries with similar systems.

Keywords: China; Hospital revenue; Healthcare system reform; Public hospitals (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1016/j.socscimed.2021.114210

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