Abstract
BackgroundThe vertical integration of medical delivery systems (VIMDSs) is a reform direction both in China and worldwide. We conducted a controlled economic experiment to explore decision-making by managers of medical institutions with respect to profits and what influences the distribution mechanism in VIMDSs.MethodsStudents and hospital staff were recruited to make choices regarding the role of directors of institutions. z-Tree software was used to design the experimental program. Ninety-six subjects participated in the experiment. We gathered 479 valid contracts.ResultsOf the subjects, 66.39% chose flexible contracts. The median of the bidding distribution rate to community health service centres of all auctions was 18.50%. The final distribution rate was approximately 3 percentage points higher than the bidding distribution rate. The median effort level was 9.00. There was a significant correlation between the improvement rate and the choice of effort level (P<0.05) in flexible contracts.ConclusionsHospital managers have a preference for flexible contracts because of uncertainty in the medical system. A community health service centre director may behave perfunctorily by engaging in shading in the integration. Flexible contracts and sharing rates beyond the participants’ expectations motivate managers to engage in more cooperative behaviours.
Highlights
The vertical integration of medical delivery systems (VIMDSs) is a reform direction both in China and worldwide
We conducted a controlled economic experiment to explore decision-making by managers of medical institutions with respect to profits and what influences the distribution mechanism in VIMDSs
After the hospital managers had chosen the type of contract, the community health service centre directors began to bid for the contracts
Summary
The vertical integration of medical delivery systems (VIMDSs) is a reform direction both in China and worldwide. We conducted a controlled economic experiment to explore decision-making by managers of medical institutions with respect to profits and what influences the distribution mechanism in VIMDSs. The fragmentation of medical care has become one of the main reasons for the inefficiency of medical delivery systems in many countries (WHO 2009), which may subsequently raise health care expenditure and expand the scale of hospitals. Hart and Moore [10] introduced behavioural assumptions to test incomplete contract theory They proposed that a contract provides a reference point for managers’ feeling of entitlement and defined a concept, “nature state”, that represented the uncertainties of future political, economic, and other conditions. The experiments were programmed and conducted using z-Tree [24]
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