Does providing more services increase the primary hospitals' revenue? An assessment of national essential medicine policy based on 2,675 counties in China.

Fei Chen,Min Yang,Qun Meng,Jay Pan,Xiaosong Li,Qian Li,Kimon Bekelis

doi:10.1371/journal.pone.0190855

Fei Chen, Min Yang + Show 5 more

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https://doi.org/10.1371/journal.pone.0190855

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Abstract

ObjectiveTo understand whether the increased outpatient service provision (OSP) brings in enough additional income (excluding income from essential medicine) for primary hospitals (INCOME) to compensate for reduced costs of medicine.MethodsThe two outcomes, annual OSP and INCOME for the period of 2008–2012, were collected from 34,506 primary hospitals in 2,675 counties in 31 provinces in China by the national surveillance system. The data had a four-level hierarchical structure; time points were nested within primary hospital, hospitals within county, and counties within province. We fitted bivariate five-level random effects regression models to examine correlations between OSP and INCOME in terms of their mean values and dose-response effects of the essential medicine policy (EMP). We adjusted for the effects of time period and selected hospital resources.FindingsThe estimated correlation coefficients between the two outcomes’ mean values were strongly positive among provinces (r = 0.910), moderately positive among counties (r = 0.380), and none among hospitals (r = 0.002) and time (r = 0.007). The correlation between their policy effects was weakly positive among provinces (r = 0.234), but none at the county and hospital levels. However, there were markedly negative correlation coefficients between the mean and policy effects at -0.328 for OSP and -0.541 for INCOME at the hospital level.ConclusionThere was no evidence to suggest an association between the two outcomes in terms of their mean values and dose-response effects of EMP at the hospital level. This indicated that increased OSP did not bring enough additional INCOME. Sustainable mechanisms to compensate primary hospitals are needed.

Highlights

In response to allegations that it is too difficult and too expensive for many Chinese people to seek health care, China’s central government launched a new round of national healthcare reform in April 2009
There was no evidence to suggest an association between the two outcomes in terms of their mean values and dose-response effects of essential medicine policy (EMP) at the hospital level
The EMP was implemented among the hospitals in a temporal sequence from 2009 to 2012; no hospital was on the policy in 2008, and there were 27.6%, 26.4%, 25.8% and 20.2% hospitals exposed to the policy each year from 2009 to 2012 respectively

Summary

Introduction

In response to allegations that it is too difficult and too expensive for many Chinese people to seek health care, China’s central government launched a new round of national healthcare reform in April 2009. The main goals of this reform included accelerating the construction of the basic medical security system, establishing national essential medicine policy (EMP), improving the primary medical and health service system, promoting the equality of basic public health services and promoting government-run hospitals reform [1]. The EMP, an essential part of the new round of national healthcare reform, aimed to improve availability, affordability, quality and safety of essential medicine. It requested government-run primary hospitals to use low-cost medicine with zero profit [2,3,4]. The EMP was implemented among the hospitals in a temporal sequence from 2009 to 2012; no hospital was on the policy in 2008, and there were 27.6%, 26.4%, 25.8% and 20.2% hospitals exposed to the policy each year from 2009 to 2012 respectively

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