The new round of health care reforms in China achieved significant initial results. New and emerging problems coinciding with the deepening of the reforms, however, require further institutional changes to strengthen the competition mechanism and promote public hospital efficiency. This paper provides a conceptual framework and preliminary assessment of public hospital competition in China. Specifically, we distinguish between two closely related concepts – competition and privatization, and identify several critical conditions under which hospital competition can be used as a policy instrument to improve health care delivery in China. We also investigate the current performance and identify several unintended consequences of public hospital competition – mainly, medical arms race, drug over-prescription and the erosion of a trusting relationship between patients and physicians. Finally, we discuss the policy options for enhancing the internal competition in China’s hospital market, and conclude that public investment on information provision is key to reaping the positive outcomes of pro-competition policies.

In recent years China has witnessed a surge in medical disputes, including many widely reported violent riots, attacks, and protests in hospitals. This is the result of a confluence of inappropriate incentives in the health system, the consequent distorted behaviors of physicians, mounting social distrust of the medical profession, and institutional failures of the legal framework. The detrimental effects of the damaged doctor–patient relationship have begun to emerge, calling for rigorous study and serious policy intervention. Using a sequential exploratory design, this article seeks to explain medical disputes in Chinese public hospitals with primary data collected from Shenzhen City. The analysis finds that medical disputes of various forms are disturbingly widespread and reveals that inappropriate internal incentives in hospitals and the heavy workload of physicians undermine the quality of clinical encounters, which easily triggers disputes. Empirically, a heavy workload is associated with a larger number of disputes. A greater number of disputes are associated with higher-level hospitals, which can afford larger financial settlements. The resolution of disputes via the legal channel appears to be unpopular. This article argues that restoring a healthy doctor–patient relationship is no less important than other institutional aspects of health care reform.

Over-prescription has become one major problem in China’s health care sector. Incorporating interview data from hospitals in Shanghai, this paper provided empirical evidence on how the process of over-prescription was carried out in day-to-day clinical settings, and demonstrates various mechanisms that allow over-prescription to continue vigorously in the context of the Chinese health care system. In particular, this study identified four levels of incentives that over-prescription was carried out: hospital, medical department, doctors and pharmaceutical companies. Due to the insufficient funding from the government and rising operational costs, hospitals had to rely on the sales of drugs and provision of medical services to survive. This funding pressure then transferred to specific revenue targets for medical departments. A combination of incentives, including drug remunerations, bonus system, low pay and high workloads motivated over-prescription at doctor level. At pharmaceutical company level, high profits of pharmaceuticals products as well as lack of emphasis on efficacy of drugs led to under-table payments and illicit drug remunerations. The study argued that the way that the Chinese health care system operates was based on the profit-seeking principle rather than on fulfilling its social functions, and called for a systematic reform of provider incentives to eradicating the problem of over-prescription.

The passage of the Affordable Care Act in the United States has opened a policy window for the establishment of an independent Medicaid agency for the Navajo Nation. This article explores several policy options to improve health care services for Native Americans. Although there is a lack of scholarly research on the impact of healthcare reform and the effectiveness of current health care programs for American Indians, policymakers should utilize evidence-based research to inform policy decisions.

There is misunderstanding about both the meaning and the role of cost-effectiveness thresholds in policy decision making. This article dissects the main issues by use of a bookshelf metaphor. Its main conclusions are as follows: it must be possible to compare interventions in terms of their impact on a common measure of health; mere effectiveness is not a persuasive case for inclusion in public insurance plans; public health advocates need to address issues of relative effectiveness; a ‘first best’ benchmark or threshold ratio of health gain to expenditure identifies the least effective intervention that should be included in a public insurance plan; the reciprocal of this ratio – the ‘first best’ cost-effectiveness threshold – will rise or fall as the health budget rises or falls (ceteris paribus); setting thresholds too high or too low costs lives; failure to set any cost-effectiveness threshold at all also involves avertable deaths and morbidity; the threshold cannot be set independently of the health budget; the threshold can be approached from either the demand side or the supply side – the two are equivalent only in a health-maximising equilibrium; the supply-side approach generates an estimate of a ‘second best’ cost-effectiveness threshold that is higher than the ‘first best’; the second best threshold is the one generally to be preferred in decisions about adding or subtracting interventions in an established public insurance package; multiple thresholds are implied by systems having distinct and separable health budgets; disinvestment involves eliminating effective technologies from the insured bundle; differential weighting of beneficiaries’ health gains may affect the threshold; anonymity and identity are factors that may affect the interpretation of the threshold; the true opportunity cost of health care in a community, where the effectiveness of interventions is determined by their impact on health, is not to be measured in money – but in health itself.