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Unpacking the red packets: institution and informal payments in healthcare in China

Author

Listed:
  • Ning Liu

    (Lanzhou University
    Lanzhou University)

  • Zhuo Chen

    (University of Georgia
    University of Nottingham)

  • Guoxian Bao

    (Lanzhou University
    Lanzhou University)

Abstract

Informal cash payments from patient to healthcare providers for services provided by the healthcare system have attracted increasing scholarly interest. However, the root and mechanism of informal payments are not well understood. This paper contributes to the literature by positing informal payments as informal institutions. We use a nationally representative longitudinal survey in 28 provinces in China to explore the root of informal payments. Our empirical findings suggest that patients’ informal payments for healthcare services may originate from information acquisition and processing, failure of government and market in allocating healthcare resources, and disparities in utilization. Further, this informal institution could be changed by the self-reinforcement of individual patients. These findings suggest that policies to facilitate transparency and to remove institutional barriers, such as the introduction of market competition, may reduce the incidence of informal payments.

Suggested Citation

  • Ning Liu & Zhuo Chen & Guoxian Bao, 2021. "Unpacking the red packets: institution and informal payments in healthcare in China," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 22(8), pages 1183-1194, November.
    • Handle: RePEc:spr:eujhec:v:22:y:2021:i:8:d:10.1007_s10198-021-01330-z
    DOI: 10.1007/s10198-021-01330-z
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    Cited by:

    1. Liu, Ning & Bao, Guoxian & Wu, Shaolong, 2023. "Social implications of Covid-19: Its impact on general trust, political trust, and trust in physicians in China," Social Science & Medicine, Elsevier, vol. 317(C).

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    More about this item

    Keywords

    Institutional theory; Healthcare; Informal payments; Informal institutions;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • H1 - Public Economics - - Structure and Scope of Government
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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