Social Sciences in China (Chinese Edition)

No.12, 2014

Cost-Control Mechanisms and Operational Logic in Chinese Public Hospitals

(Abstract)

Yao Yu

Cost-control mechanisms in the field of healthcare services are not only a core issue for medical insurance, but, even more, a key point in the solution of “inaccessible and costly healthcare” in public hospitals. Such mechanisms are rooted in the operational logic of the whole medical service supply system. Through a logical and empirical analysis of operational procedures and the cost control situation in Chinese public hospitals, we have attempted to construct an incentive-based analytical framework for the operational logic of public hospitals that will enable us to investigate the cause of the phenomenon of “inaccessible and costly healthcare.” It can be seen that the formulation of public hospital reform policies should not be targeted only on the hospitals themselves but rather should be based on their operational logic, with a view to simultaneously creating an efficient internal and external cost-control mechanism that will largely alleviate the problem of “inaccessible and costly healthcare,” and allow health authorities to confine themselves to commissioning hospitals to provide medical services to society.