IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v7y2015i10p14092-14111d57427.html
   My bibliography  Save this article

The Efficiency and Its Determinants for China’s Medical Care System: Some Policy Implications for Northeast Asia

Author

Listed:
  • Kejia Chu

    (Department of Insurance, Guangdong University of Finance, Guangzhou 510521, China)

  • Ning Zhang

    (Department of Economics, Institute of Resource, Environment and Sustainable Development, School of Economics, Jinan University, Guangzhou 510632, China)

  • Zhongfei Chen

    (Department of Economics, Institute of Resource, Environment and Sustainable Development, School of Economics, Jinan University, Guangzhou 510632, China)

Abstract

The medical care system in China has experienced significant changes during three decades of reform, and thus result in a need to investigate the effects of medical reform. This paper investigates the technical efficiency of Chinese hospitals in 31 provinces during the period from 2002 to 2013 by proposing a new global generalized directional distance function (GGDDF) approach taking account of undesirable output, i.e. , mortality. Results show that despite the technical efficiency had being improved with time trend, most Chinese provinces are not performing well on hospitals’ technical efficiency and leave a large potential to improve. Some provinces display better performance compared to other provinces of China. We further investigate the factors that affect the technical efficiency of Chinese hospitals with Tobit models. It concludes that the medical insurance reforms have improved the performance of Chinese hospitals, while public subsidies have decreased it. The provinces with higher GDP per capital and population density, the performance of their hospitals is better. The related policy implications for Northeast Asia are derived, including encouraging the development of private hospitals, enlarging the coverage of medical services, and pursuing different policies for the provinces with higher GDP per capital and population density.

Suggested Citation

  • Kejia Chu & Ning Zhang & Zhongfei Chen, 2015. "The Efficiency and Its Determinants for China’s Medical Care System: Some Policy Implications for Northeast Asia," Sustainability, MDPI, vol. 7(10), pages 1-20, October.
    • Handle: RePEc:gam:jsusta:v:7:y:2015:i:10:p:14092-14111:d:57427
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/7/10/14092/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/7/10/14092/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ng, Ying Chu, 2011. "The productive efficiency of Chinese hospitals," China Economic Review, Elsevier, vol. 22(3), pages 428-439, September.
    2. Färe, Rolf & Grosskopf, Shawna, 2010. "Directional distance functions and slacks-based measures of efficiency: Some clarifications," European Journal of Operational Research, Elsevier, vol. 206(3), pages 702-702, November.
    3. Wagstaff, Adam & Lindelow, Magnus & Jun, Gao & Ling, Xu & Juncheng, Qian, 2009. "Extending health insurance to the rural population: An impact evaluation of China's new cooperative medical scheme," Journal of Health Economics, Elsevier, vol. 28(1), pages 1-19, January.
    4. Barros, Carlos Pestana & Menezes, Antonio & Vieira, José António Cabral & Peypoch, Nicolas & Solonandrasana, Bernardin, 2007. "An Analysis of Hospital Efficiency and Productivity Growth Using the Luenberger Productivity Indicator," IZA Discussion Papers 2689, Institute of Labor Economics (IZA).
    5. Dong, Keyong, 2009. "Medical insurance system evolution in China," China Economic Review, Elsevier, vol. 20(4), pages 591-597, December.
    6. Koop, Gary & Osiewalski, Jacek & Steel, Mark F. J., 1997. "Bayesian efficiency analysis through individual effects: Hospital cost frontiers," Journal of Econometrics, Elsevier, vol. 76(1-2), pages 77-105.
    7. Zhang, Ning & Zhou, P. & Choi, Yongrok, 2013. "Energy efficiency, CO2 emission performance and technology gaps in fossil fuel electricity generation in Korea: A meta-frontier non-radial directional distance functionanalysis," Energy Policy, Elsevier, vol. 56(C), pages 653-662.
    8. Bruce Hollingsworth, 2008. "The measurement of efficiency and productivity of health care delivery," Health Economics, John Wiley & Sons, Ltd., vol. 17(10), pages 1107-1128, October.
    9. Hsiao, William C. L., 1995. "The Chinese health care system: Lessons for other nations," Social Science & Medicine, Elsevier, vol. 41(8), pages 1047-1055, October.
    10. Karen Eggleston & Li Ling & Meng Qingyue & Magnus Lindelow & Adam Wagstaff, 2008. "Health service delivery in China: a literature review," Health Economics, John Wiley & Sons, Ltd., vol. 17(2), pages 149-165, February.
    11. Dong-hyun Oh, 2010. "A global Malmquist-Luenberger productivity index," Journal of Productivity Analysis, Springer, vol. 34(3), pages 183-197, December.
    12. Audibert, Martine & Mathonnat, Jacky & Pelissier, Aurore & Huang, Xiao Xian & Ma, Anning, 2013. "Health insurance reform and efficiency of township hospitals in rural China: An analysis from survey data," China Economic Review, Elsevier, vol. 27(C), pages 326-338.
    13. Jian, Tianlun & Sachs, Jeffrey D. & Warner, Andrew M., 1996. "Trends in regional inequality in China," China Economic Review, Elsevier, vol. 7(1), pages 1-21.
    14. Martine Audibert & Jacky Mathonnat & Aurore Pelissier & Xiao Xian Huang & Anning Ma, 2013. "Health insurance reform and efficiency of township hospitals in rural China: An analysis from survey data," Post-Print halshs-01230210, HAL.
    15. Badin, Luiza & Daraio, Cinzia & Simar, Léopold, 2010. "Optimal bandwidth selection for conditional efficiency measures: A data-driven approach," European Journal of Operational Research, Elsevier, vol. 201(2), pages 633-640, March.
    16. Varabyova, Yauheniya & Schreyögg, Jonas, 2013. "International comparisons of the technical efficiency of the hospital sector: Panel data analysis of OECD countries using parametric and non-parametric approaches," Health Policy, Elsevier, vol. 112(1), pages 70-79.
    17. Carlos Pestana Barros & António Gomes de Menezes & Jos頠 Cabral Vieira, 2013. "Measurement of hospital efficiency, using a latent class stochastic frontier model," Applied Economics, Taylor & Francis Journals, vol. 45(1), pages 47-54, January.
    18. Fukuyama, Hirofumi & Weber, William L., 2009. "A directional slacks-based measure of technical inefficiency," Socio-Economic Planning Sciences, Elsevier, vol. 43(4), pages 274-287, December.
    19. Carlos Barros & António Gomes de Menezes & Nicolas Peypoch & Bernardin Solonandrasana & José Vieira, 2008. "An analysis of hospital efficiency and productivity growth using the Luenberger indicator," Health Care Management Science, Springer, vol. 11(4), pages 373-381, December.
    20. Fukuyama, Hirofumi & Shiraz, Rashed Khanjani, 2015. "Cost-effectiveness measures on convex and nonconvex technologies," European Journal of Operational Research, Elsevier, vol. 246(1), pages 307-319.
    21. Rosenberg-Yunger, Zahava R.S. & Daar, Abdallah S. & Singer, Peter A. & Martin, Douglas K., 2008. "Healthcare sustainability and the challenges of innovation to biopharmaceuticals in Canada," Health Policy, Elsevier, vol. 87(3), pages 359-368, September.
    22. Färe, Rolf & Grosskopf, Shawna, 2010. "Directional distance functions and slacks-based measures of efficiency," European Journal of Operational Research, Elsevier, vol. 200(1), pages 320-322, January.
    23. World Bank, 2010. "Fixing the Public Hospital System in China," World Bank Publications - Reports 27720, The World Bank Group.
    24. Zhou, P. & Ang, B.W. & Wang, H., 2012. "Energy and CO2 emission performance in electricity generation: A non-radial directional distance function approach," European Journal of Operational Research, Elsevier, vol. 221(3), pages 625-635.
    25. Zuckerman, Stephen & Hadley, Jack & Iezzoni, Lisa, 1994. "Measuring hospital efficiency with frontier cost functions," Journal of Health Economics, Elsevier, vol. 13(3), pages 255-280, October.
    26. Wagstaff, Adam & Lindelow, Magnus, 2008. "Can insurance increase financial risk?: The curious case of health insurance in China," Journal of Health Economics, Elsevier, vol. 27(4), pages 990-1005, July.
    27. Zhang, Ning & Kong, Fanbin & Choi, Yongrok, 2014. "Measuring sustainability performance for China: A sequential generalized directional distance function approach," Economic Modelling, Elsevier, vol. 41(C), pages 392-397.
    28. Hu, Hsin-Hui & Qi, Qinghui & Yang, Chih-Hai, 2012. "Analysis of hospital technical efficiency in China: Effect of health insurance reform," China Economic Review, Elsevier, vol. 23(4), pages 865-877.
    29. Simar, Leopold & Wilson, Paul W., 2007. "Estimation and inference in two-stage, semi-parametric models of production processes," Journal of Econometrics, Elsevier, vol. 136(1), pages 31-64, January.
    30. Chambers, Robert G. & Chung, Yangho & Fare, Rolf, 1996. "Benefit and Distance Functions," Journal of Economic Theory, Elsevier, vol. 70(2), pages 407-419, August.
    31. Adam Wagstaff & Winnie Yip & Magnus Lindelow & William C. Hsiao, 2009. "China's health system and its reform: a review of recent studies," Health Economics, John Wiley & Sons, Ltd., vol. 18(S2), pages 7-23, July.
    32. R. G. Chambers & Y. Chung & R. Färe, 1998. "Profit, Directional Distance Functions, and Nerlovian Efficiency," Journal of Optimization Theory and Applications, Springer, vol. 98(2), pages 351-364, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Xian‐Hui He & Yung‐ho Chiu & Tzu‐Han Chang & Liang‐Chun Lu & Shih‐Yung Chiu, 2021. "Analyzing hospital medical efficiency of administration and medical treatment in China," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(6), pages 1564-1578, September.
    2. Zhang, Cai Wen & Yang, Yuanhui, 2023. "Appraisal of regional hospital efficiency and healthcare quality in China: Impacts of subsidies and marketization," Socio-Economic Planning Sciences, Elsevier, vol. 89(C).
    3. Zhiyang Shen & Vivian Valdmanis, 2020. "Identifying the contribution to hospital performance among Chinese regions by an aggregate directional distance function," Health Care Management Science, Springer, vol. 23(1), pages 142-152, March.
    4. Dunfu Zhang & K. M. Atikur Rahman, 2020. "Government health expenditure, out‐of‐pocket payment and social inequality: A cross‐national analysis of China and OECD countries," International Journal of Health Planning and Management, Wiley Blackwell, vol. 35(5), pages 1111-1126, September.
    5. Xiuxia Yin & Lucille Aba Abruquah & Ya Ding, 2019. "Dynamics of Life Satisfaction Among Rural Elderly in China: The Role of Health Insurance Policies and Intergenerational Relationships," Sustainability, MDPI, vol. 11(3), pages 1-19, January.
    6. Yongrok Choi & Malin Song & Seunghwan Myeong, 2016. "Introduction to the Special Issue on the Sustainable Asia Conference 2015," Sustainability, MDPI, vol. 8(3), pages 1-9, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Laurène PETITFOUR & Xiezhe HUANGFU & Martine AUDIBERT & Jacky MATHONNAT, 2017. "Efficiency of township hospitals in China in the context of the drug policy reform: Progress should not get bogged in midstream - A case study from a survey in Weifang prefecture," Working Papers P185, FERDI.
    2. Laurène PETITFOUR & Xiezhe HUANGFU & Martine AUDIBERT & Jacky MATHONNAT, 2017. "Efficiency of township hospitals in China in the context of the drug policy reform: Progress should not get bogged in midstream - A case study from a survey in Weifang prefecture," Working Papers P185, FERDI.
    3. D’Inverno, Giovanna & Carosi, Laura & Romano, Giulia & Guerrini, Andrea, 2018. "Water pollution in wastewater treatment plants: An efficiency analysis with undesirable output," European Journal of Operational Research, Elsevier, vol. 269(1), pages 24-34.
    4. Nabavieh, Alireza & Gholamiangonabadi, Davoud & Ahangaran, Ali Asghar, 2015. "Dynamic changes in CO2 emission performance of different types of Iranian fossil-fuel power plants," Energy Economics, Elsevier, vol. 52(PA), pages 142-150.
    5. Kounetas, Konstantinos & Zervopoulos, Panagiotis D., 2019. "A cross-country evaluation of environmental performance: Is there a convergence-divergence pattern in technology gaps?," European Journal of Operational Research, Elsevier, vol. 273(3), pages 1136-1148.
    6. Zhang, Ning & Kong, Fanbin & Choi, Yongrok, 2014. "Measuring sustainability performance for China: A sequential generalized directional distance function approach," Economic Modelling, Elsevier, vol. 41(C), pages 392-397.
    7. Ke Wang & Yujiao Xian & Chia-Yen Lee & Yi-Ming Wei & Zhimin Huang, 2019. "On selecting directions for directional distance functions in a non-parametric framework: a review," Annals of Operations Research, Springer, vol. 278(1), pages 43-76, July.
    8. Zhang, Ning & Wang, Bing & Chen, Zhongfei, 2016. "Carbon emissions reductions and technology gaps in the world's factory, 1990–2012," Energy Policy, Elsevier, vol. 91(C), pages 28-37.
    9. Wang, Zhaohua & Feng, Chao, 2015. "A performance evaluation of the energy, environmental, and economic efficiency and productivity in China: An application of global data envelopment analysis," Applied Energy, Elsevier, vol. 147(C), pages 617-626.
    10. Liu, Guangtian & Wang, Bing & Zhang, Ning, 2016. "A coin has two sides: Which one is driving China’s green TFP growth?," Economic Systems, Elsevier, vol. 40(3), pages 481-498.
    11. Sebastian Kohl & Jan Schoenfelder & Andreas Fügener & Jens O. Brunner, 2019. "The use of Data Envelopment Analysis (DEA) in healthcare with a focus on hospitals," Health Care Management Science, Springer, vol. 22(2), pages 245-286, June.
    12. Song, Malin & Wang, Jianlin, 2018. "Environmental efficiency evaluation of thermal power generation in China based on a slack-based endogenous directional distance function model," Energy, Elsevier, vol. 161(C), pages 325-336.
    13. Zhang, Yijun & Song, Yi, 2020. "Unified efficiency of coal mining enterprises in China: An analysis based on meta-frontier non-radial directional distance functions," Resources Policy, Elsevier, vol. 65(C).
    14. Manh D. Pham & Valentin Zelenyuk, 2018. "Slack-based directional distance function in the presence of bad outputs: theory and application to Vietnamese banking," Empirical Economics, Springer, vol. 54(1), pages 153-187, February.
    15. Fukuyama, Hirofumi & Matousek, Roman, 2011. "Efficiency of Turkish banking: Two-stage network system. Variable returns to scale model," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 21(1), pages 75-91, February.
    16. Kounetas, Kostas & Zervopoulos, Panagiotis, 2017. "Annex I and non-Annex I countries’productive performance revisited using a generalized directional distance function under a metafrontier framework: Is there any convergence-divergence pattern for tec," MPRA Paper 80904, University Library of Munich, Germany.
    17. Arabi, Behrouz & Munisamy, Susila & Emrouznejad, Ali, 2015. "A new slacks-based measure of Malmquist–Luenberger index in the presence of undesirable outputs," Omega, Elsevier, vol. 51(C), pages 29-37.
    18. Diogo Cunha Ferreira & Alexandre Morais Nunes & Rui Cunha Marques, 2020. "Operational efficiency vs clinical safety, care appropriateness, timeliness, and access to health care," Journal of Productivity Analysis, Springer, vol. 53(3), pages 355-375, June.
    19. Cláudia Araújo & Carlos Barros & Peter Wanke, 2014. "Efficiency determinants and capacity issues in Brazilian for-profit hospitals," Health Care Management Science, Springer, vol. 17(2), pages 126-138, June.
    20. Du, Limin & Hanley, Aoife & Wei, Chu, 2015. "Estimating the Marginal Abatement Cost Curve of CO2 Emissions in China: Provincial Panel Data Analysis," Energy Economics, Elsevier, vol. 48(C), pages 217-229.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:7:y:2015:i:10:p:14092-14111:d:57427. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.