Can public hospital reform reduce medical resource mismatches? Evidence from China

Abstract

BackgroundThe mismatch of medical resources is a significant issue in global healthcare, undermining both service accessibility and system efficiency. In China, despite the implementation of the “Healthy China” strategy, persistent mismatches remain due to factors such as industrialization, urbanization, and population aging. This study empirically evaluates the impact of Public Hospital Reform (PHR) on mitigating these mismatches.MethodsA Difference-in-Differences (DD) approach is applied to panel data from 300 cities spanning 2010 to 2021, using the phased implementation of PHR as a quasi-natural experiment. This allows for a comparative analysis of changes in resource allocation between cities that adopted the reform and those that did not. Quantile regression assesses the effects of PHR across varying levels of resource mismatch, while mechanism tests investigate how PHR influences mismatches through cost reduction and supply expansion.ResultsPHR is found to reduce medical resource mismatches by 13.9%, primarily driven by cost reductions and increased resource supply. The effects are more pronounced at both lower and higher levels of mismatch, with a limited impact at mid-levels. Furthermore, the reform’s effectiveness diminishes as it is extended to more cities, suggesting a potential saturation effect.ConclusionsThis study demonstrates that PHR significantly alleviates medical resource mismatches in China. The findings underscore the need to focus on cost control and resource supply in future healthcare reforms, providing key insights for policymakers in developing countries facing similar healthcare resource challenges.