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Health Economics Review

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Open Access 01-12-2024 | Research

The economic effect of financial compensation in China’s healthcare system: comprehensive insights regarding supply and demand factors

Authors: Yi Guo, Xuezhi Hong, Dongmei Li, Qiannan An, Wenwen Fan, Minghe Yang, Luyang Xiao

Published in: Health Economics Review | Issue 1/2024

Abstract

Objectives

We aim to analyse the effects of government subsidies on residents’ health and healthcare expenditure from the perspectives of supply and demand.

Data and methods

According to the regional division adopted in the data query system of the National Bureau of Statistics, this study divides 31 provinces and cities into three regions: eastern, central, and western. The data used are from public databases, such as the “China Statistical Yearbook,” “China Health Statistical Yearbook,” and “Government Final Account Report”. In this study, mathematical model derivation is used to construct a fixed effects model, and an empirical study based on cross-sectional data and general linear regression is conducted. To prevent endogeneity issues, this study introduces instrumental variables and uses 2SLS regression to further analyse the output results.

Results

For every 1% increase in supplementary funding on the supply side, the perinatal mortality rate decreases by 1.765%, while for every 1% increase in financial compensation on the demand side, per capita outpatient expenses increase by 0.225% and per capita hospitalization expenses increase by 0.196%. Regarding medical resources, for every 1% increase in the number of beds per 1,000 people, per capita hospitalization expenses decrease by 0.099%. In the central and eastern regions, where economic levels are higher, supply-side government funding is more effective than demand-side funding. In contrast, demand-side funding is more effective in the western region.

Conclusions

The roles of multiple influencing factors and significant regional heterogeneity are clarified. Increasing financial compensation to providers positively impacts perinatal mortality but leads to higher per capita outpatient and hospital expenditures. Finally, this study provides targeted policy recommendations and solid theoretical support for policymakers.

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Title: The economic effect of financial compensation in China’s healthcare system: comprehensive insights regarding supply and demand factors
Authors: Yi Guo
Xuezhi Hong
Dongmei Li
Qiannan An
Wenwen Fan
Minghe Yang
Luyang Xiao
Publication date: 01-12-2024
Publisher: Springer Berlin Heidelberg
Published in: Health Economics Review / Issue 1/2024
Electronic ISSN: 2191-1991
DOI: https://doi.org/10.1186/s13561-024-00496-5

2024 ASCO Annual Meeting

Springer Medicine

The economic effect of financial compensation in China’s healthcare system: comprehensive insights regarding supply and demand factors

Abstract

Objectives

Data and methods

Results

Conclusions

2024 ASCO Annual Meeting

Springer Medicine

Abstract

Objectives

Data and methods

Results

Conclusions

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