IDEAS home Printed from https://ideas.repec.org/a/spr/eujhec/v22y2021i8d10.1007_s10198-021-01330-z.html
   My bibliography  Save this article

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
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10198-021-01330-z
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10198-021-01330-z?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Currie, Janet & Lin, Wanchuan & Zhang, Wei, 2011. "Patient knowledge and antibiotic abuse: Evidence from an audit study in China," Journal of Health Economics, Elsevier, vol. 30(5), pages 933-949.
    2. 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.
    3. Adam Wagstaff, 2010. "Social health insurance reexamined," Health Economics, John Wiley & Sons, Ltd., vol. 19(5), pages 503-517, May.
    4. Macfarlane, Fraser & Barton-Sweeney, Cathy & Woodard, Fran & Greenhalgh, Trisha, 2013. "Achieving and sustaining profound institutional change in healthcare: Case study using neo-institutional theory," Social Science & Medicine, Elsevier, vol. 80(C), pages 10-18.
    5. 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.
    6. Horak, Sven & Restel, Katja, 2016. "A Dynamic Typology of Informal Institutions: Learning from the Case of Guanxi," Management and Organization Review, Cambridge University Press, vol. 12(3), pages 525-546, September.
    7. Cutler, David M. & Zeckhauser, Richard J., 2000. "The anatomy of health insurance," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 11, pages 563-643, Elsevier.
    8. Zhang, Anwen & Nikoloski, Zlatko & Mossialos, Elias, 2017. "Does health insurance reduce out-of-pocket expenditure? Heterogeneity among China's middle-aged and elderly," Social Science & Medicine, Elsevier, vol. 190(C), pages 11-19.
    9. Chen-Wei Yang, 2015. "Implementing hospital innovation in Taiwan: the perspectives of institutional theory and social capital," International Journal of Health Planning and Management, Wiley Blackwell, vol. 30(4), pages 403-425, October.
    10. Williams, Colin C. & Horodnic, Adrian V., 2017. "Rethinking informal payments by patients in Europe: An institutional approach," Health Policy, Elsevier, vol. 121(10), pages 1053-1062.
    11. Bloom, Gerald, 2011. "Building institutions for an effective health system: Lessons from China's experience with rural health reform," Social Science & Medicine, Elsevier, vol. 72(8), pages 1302-1309, April.
    12. Ensor, Tim, 2004. "Informal payments for health care in transition economies," Social Science & Medicine, Elsevier, vol. 58(2), pages 237-246, January.
    13. Xu, Yiqing & Yao, Yang, 2015. "Informal Institutions, Collective Action, and Public Investment in Rural China," American Political Science Review, Cambridge University Press, vol. 109(2), pages 371-391, May.
    14. Pan, Jay & Liu, Dan & Ali, Shehzad, 2015. "Patient dissatisfaction in China: What matters," Social Science & Medicine, Elsevier, vol. 143(C), pages 145-153.
    15. Fareed, Naleef & Bazzoli, Gloria J. & Farnsworth Mick, Stephen S. & Harless, David W., 2015. "The influence of institutional pressures on hospital electronic health record presence," Social Science & Medicine, Elsevier, vol. 133(C), pages 28-35.
    16. Voigt, Stefan, 2018. "How to measure informal institutions," Journal of Institutional Economics, Cambridge University Press, vol. 14(1), pages 1-22, February.
    17. Casson, Mark C. & Della Giusta, Marina & Kambhampati, Uma S., 2010. "Formal and Informal Institutions and Development," World Development, Elsevier, vol. 38(2), pages 137-141, February.
    18. Adrian V. Horodnic & Colin C. Williams, 2018. "Informal payments by patients for health services: prevalence and determinants," The Service Industries Journal, Taylor & Francis Journals, vol. 38(11-12), pages 841-855, September.
    19. Liu, Kai & Wu, Qiaobing & Liu, Junqiang, 2014. "Examining the association between social health insurance participation and patients' out-of-pocket payments in China: The role of institutional arrangement," Social Science & Medicine, Elsevier, vol. 113(C), pages 95-103.
    20. Tambor, Marzena & Pavlova, Milena & Golinowska, Stanisława & Sowada, Christoph & Groot, Wim, 2013. "The formal–informal patient payment mix in European countries. Governance, economics, culture or all of these?," Health Policy, Elsevier, vol. 113(3), pages 284-295.
    21. A. J. Culyer & J. P. Newhouse (ed.), 2000. "Handbook of Health Economics," Handbook of Health Economics, Elsevier, edition 1, volume 1, number 1.
    22. Kyriakos Souliotis & Christina Golna & Yannis Tountas & Olga Siskou & Daphne Kaitelidou & Lycourgos Liaropoulos, 2016. "Informal payments in the Greek health sector amid the financial crisis: old habits die last..," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 17(2), pages 159-170, March.
    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. 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).

    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. Erik Schokkaert & Jonas Steel & Carine Van de Voorde, 2017. "Out-of-Pocket Payments and Subjective Unmet Need of Healthcare," Applied Health Economics and Health Policy, Springer, vol. 15(5), pages 545-555, October.
    2. Williams, Colin C. & Horodnic, Adrian V., 2017. "Rethinking informal payments by patients in Europe: An institutional approach," Health Policy, Elsevier, vol. 121(10), pages 1053-1062.
    3. Wu, Bingxiao, 2019. "Physician agency in China: Evidence from a drug-percentage incentive scheme," Journal of Development Economics, Elsevier, vol. 140(C), pages 72-89.
    4. Liu, Kai & Wu, Qiaobing & Liu, Junqiang, 2014. "Examining the association between social health insurance participation and patients' out-of-pocket payments in China: The role of institutional arrangement," Social Science & Medicine, Elsevier, vol. 113(C), pages 95-103.
    5. Cristian Incaltarau & Adrian V. Horodnic & Colin C. Williams & Liviu Oprea, 2021. "Institutional Determinants of Informal Payments for Health Services: An Exploratory Analysis across 117 Countries," IJERPH, MDPI, vol. 18(23), pages 1-19, November.
    6. Giannouchos, Theodoros V. & Vozikis, Athanassios & Koufopoulou, Paraskevi & Fawkes, Leanne & Souliotis, Kyriakos, 2020. "Informal out-of-pocket payments for healthcare services in Greece," Health Policy, Elsevier, vol. 124(7), pages 758-764.
    7. McBain, Florence, 2014. "Health insurance and health environment: India’s subsidized health insurance in a context of limited water and sanitation services," Working Papers 179200, University of Bonn, Center for Development Research (ZEF).
    8. Cheung, Diana & Padieu, Ysaline, 2015. "Heterogeneity of the Effects of Health Insurance on Household Savings: Evidence from Rural China," World Development, Elsevier, vol. 66(C), pages 84-103.
    9. Nell, Martin & Rosenbrock, Stephan, 2007. "Wettbewerb in kapitalgedeckten Krankenversicherungssystemen: Ein konsistenter Ansatz zur Übertragung von individuellen Alterungsrückstellungen in der Privaten Krankenversicherung," Working Papers on Risk and Insurance 19, University of Hamburg, Institute for Risk and Insurance.
    10. James M. Malcomson, 2004. "Health Service Gatekeepers," RAND Journal of Economics, The RAND Corporation, vol. 35(2), pages 401-421, Summer.
    11. Lu, Fangwen, 2014. "Insurance coverage and agency problems in doctor prescriptions: Evidence from a field experiment in China," Journal of Development Economics, Elsevier, vol. 106(C), pages 156-167.
    12. Zhou, Wenhui & Wan, Qiang & Zhang, Ren-Qian, 2017. "Choosing among hospitals in the subsidized health insurance system of China: A sequential game approach," European Journal of Operational Research, Elsevier, vol. 257(2), pages 568-585.
    13. Arsenijevic, Jelena & Pavlova, Milena & Groot, Wim, 2015. "Out-of-pocket payments for health care in Serbia," Health Policy, Elsevier, vol. 119(10), pages 1366-1374.
    14. Ellis, Randall P. & Manning, Willard G., 2007. "Optimal health insurance for prevention and treatment," Journal of Health Economics, Elsevier, vol. 26(6), pages 1128-1150, December.
    15. James Marton & Aaron Yelowitz, 2015. "Health insurance generosity and conditional coverage: Evidence from medicaid managed care in Kentucky," Southern Economic Journal, John Wiley & Sons, vol. 82(2), pages 535-555, October.
    16. Lin, Lin & Zai, Xianhua, 2022. "The Power of Public Insurance With Limited Benefits: Evidence from China's New Cooperative Medical Scheme," GLO Discussion Paper Series 1180, Global Labor Organization (GLO).
    17. Raj Chetty & Amy Finkelstein, 2012. "Social Insurance: Connecting Theory to Data," NBER Working Papers 18433, National Bureau of Economic Research, Inc.
    18. Felix C.H. Gottschalk, 2019. "Why prevent when it does not pay? Prevention when health services are credence goods," Health Economics, John Wiley & Sons, Ltd., vol. 28(5), pages 693-709, May.
    19. K. P. M. Winssen & R. C. Kleef & W. P. M. M. Ven, 2017. "A voluntary deductible in health insurance: the more years you opt for it, the lower your premium?," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 18(2), pages 209-226, March.
    20. Bernal, Noelia & Carpio, Miguel A. & Klein, Tobias J., 2017. "The effects of access to health insurance: Evidence from a regression discontinuity design in Peru," Journal of Public Economics, Elsevier, vol. 154(C), pages 122-136.

    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

    Statistics

    Access and download statistics

    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:spr:eujhec:v:22:y:2021:i:8:d:10.1007_s10198-021-01330-z. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.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.