Effect of the mixed inpatient reimbursement system on adverse selection and moral hazard behaviours by physicians in China: a survey of physicians in Guangzhou

Abstract

BackgroundAn increasing number of physicians may be engaging in adverse selection and moral hazard behaviours, and this could be linked to the mixed inpatient reimbursement system. Driven by financial incentives, physicians may engage in moral hazard behaviours by supplying more services to a patient with slight illness, or fewer to a patient with severe illness, or may engage in adverse selection behaviours, thus changing the structure of patient cohorts. We assessed physicians' willingness to engage in, and attitudes towards, adverse selection and moral hazard behaviours under the current system, to explore whether changes to the mixed inpatient reimbursement system, from cost-based payment to value-based payment, are necessary to provide a fair and clinically optimal medical service to patients. MethodsPhysicians (n=700) at seven tertiary hospitals in Guangzhou, China, were asked to complete an anonymous survey. Districts were ranked based on their level of economic development, then a representative sample of hospitals was selected. Through stratified sampling, physicians who had been qualified to provide health services to insured patients for 1 year or more and who were still in work in the selected hospitals were selected randomly from the physician lists of each hospital. The survey response rate was 85·9% (601 of 700) and there were 585 valid questionnaires. Respondents were presented with different scenarios based on the current situation in hospitals and were asked to choose whether they would engage in adverse selection or moral hazard behaviours depending on whether the patient had medical insurance. Questions were grouped into three categories: admission to hospitals, provision of health services, and department transfers, referrals, and hospital discharges. Binary logistic regression analysis of the dichotomised willingness and behaviour variables was performed. FindingsA majority of physicians reported that they would refuse to receive inpatients who were expected to bring about large costs (62·1%, 361 of 581), and that they would be more likely to do so if their income decreased (OR=1·489, p=0·031). Physicians also reported that they would try to avoid department transfers for patients who had medical insurance (52·8%, 308 of 583) (avoiding department transfers can result in repeated discharges and admissions, which can result in physicians being paid more by the mixed reimbursement system, but not if patients have no medical insurance). A decrease in income (OR 1·591, p=0·014) or dissatisfaction with the reimbursement system (OR 1·643, p=0·034) increased this risk. Respondents reported that they would refer inpatients who had brought about large costs to other hospitals, or discharge them from the hospital prematurely (42·1%, 246 of 584). Factors that increased this risk included PhD level education (OR 1·831, p=0·014) and dissatisfaction with the reimbursement system (OR 1·824, p=0·021), and physicians who felt that the physician–patient relationship is currently worsening were also more likely to report these behaviours (OR 1·784, p=0·013). InterpretationPhysicians in tertiary hospitals have low willingness to engage in moral hazard behaviours in the provision of health services. However, they express a high willingness to engage in adverse selection or moral hazard behaviours in relation to admission to hospitals and to department transfers, referrals, and hospital discharges. Governments should integrate payment standards into the hierarchical medical system effectively, and consider physicians' suggestions on policy reform. FundingThis study was supported by a grant from the Chinese Ministry of Education Project of Humanities and Social Sciences (18YJAZH086), a grant from the Philosophy and Social Sciences department of Guangdong College for the project ‘Public Health Policy Research and Evaluation’ (2015WSYS0010), and a grant from the Public Health Service System Construction Research Foundation of Guangzhou. The funders did not participate in study design, data collection, or analysis.