Government regulation capture and hindrance mechanism at public hospitals as seen from the principal-agent perspective

Abstract

There is a high degree of information asymmetry in medical services.Public hospitals are characteristic of the nature of multi-layer principal-agent relationships.Asymmetric information can lead to inconsistent value goals between the principal and the agent,giving birth to the government regulation capture as a result.Such capture ranks a fundamental cause for diluted public welfare nature of public hospitals.To offset such capture at public hospitals calls for reconstruction of government regulation system within the framework of public hospital corporate governance at an institution level.It is also necessary to eliminate the information asymmetry and its negative results,bringing public hospitals back on track to public welfare. Key words: Public hospital; Principal-agent; Government regulation capture