Establishing Appropriate Agency Relationships for Providers in China

Liu, Yu; Saltman, Richard B.

Public hospitals hold a dominate position in terms of patient volume, medical technology, and high-quality practitioners. The percentage of total inpatient admissions made by public hospitals was about 90% by 2012, the percentage of inpatient admissions by government-owned hospitals remained about 84% between 2005 and 2012, and the percentage of inpatient admissions at tertiary-level hospitals during this latter period actually increased from 28% to 37% (see Table 1 ). 4 The dominating role of public hospitals also can be observed in variation of occupancy rates: In 2012, the bed occupancy rate was 94.2% for public hospitals, 104.5% for tertiary-level public hospitals, as against 63.2% for private hospitals. 4 Public hospitals accounted for 88.15% of the inpatient surgeries as of 2012. 4 Public hospitals also are the employers of most high-quality practitioners, for example, 82.07% of practicing physicians worked at public hospitals and 86.33% of registered nurses worked at public hospitals as of 2012. 4 The public data from China Health Statistical Yearbook are available up to 2012; however, based on the trend between 2005 and 2012, the dominating role of tertiarylevel public hospitals has not changed much since 2012. For example, China's public hospitals accounted for more than 85% of both inpatient and outpatient care as of 2015. 26 For most tertiary-level public hospitals, senior physicians are the attending physicians who control and manage a number of hospital beds, serving also as leader of a group of junior physicians and residents. Attending or senior physicians have a significant role in generating hospitals' revenue, and such revenue is tied to his or her own income as mentioned above. Therefore, even though physician-agency relation issues exist at all levels of public hospitals as well as private hospitals, the financial relation between specifically tertiary-level public hospitals and senior physicians remains a major barrier for the recent provider-related health care reform activities discussed below, reflecting the dominating medical role of tertiary-level public hospitals in China's health care system.