Abstract
BackgroundTraditional medicine has been widely used to address relatively common illnesses. In this regard, Chinese government has been continually topping up its investments on public Traditional Chinese Medicine hospitals (PTHs) in recent years. This study aimed to assess the optimal scales and structure of the investments in Henan province by analyzing the contribution of Government Financial Investment (GFI) to the efficiency and revenue growth of PTHs as well as recommending proper investment strategies for implementation to policy-makers.MethodsThis study was a panel data study, conducted in Henan Province, China. By collecting 143 PTHs’ operational data from the year 2005 to 2017, Barro Economic Growth (BEG) model, Stochastic Frontier Analysis (SFA) and Vector Autoregressive (VAR) model were used to assess the efficiency and PTHs revenue.ResultsThe study observed the positive contribution of GFI to PTHs’ revenue growth (average MPG = 2.84), indicating that the GFI had not reached the required optimal level of “Barro Law”. In order to maximize the input-output efficiency, the scales of GFI on Grade III, Grade II A, Grade II B PTHs need to be increased by − 5.96, 4.88 and 11.51%, respectively. The third year following the first investment may be a more essential period for conducting an effective GFI evaluation in Henan Province.ConclusionsGFI on PTHs usually has a long-term impact on PTHs. Governments can adjust its GFI policy so as to maximize the input-output efficiency.
Highlights
Traditional medicine has been widely used to address relatively common illnesses
The data which was used in this study includes: Traditional Chinese Medicine (TCM) practicing clinical workers, suitable TCM technologies implemented, Government Financial Investment (GFI), revenue and value of fixed assets et al of 143 public Traditional Chinese Medicine hospitals (PTHs)
Operational information of PTHs Between 2005 and 2017, the number of clinical workers from 143 PTHs in Henan Province increased from 32,058 to 64,669, with an average annual growth rate of 6.02% while the Fixed Value of fixed assets (Assets) increased with an average annual growth rate of 15.61%
Summary
Traditional medicine has been widely used to address relatively common illnesses. In this regard, Chinese government has been continually topping up its investments on public Traditional Chinese Medicine hospitals (PTHs) in recent years. Traditional medicine has long been used to address relatively common illnesses [1]. Traditional Chinese Medicine (TCM) is widely accepted in China as a complement and alternative for medical treatment [2,3,4,5]. TCM is mainly provided by public TCM hospitals (PTHs), private TCM hospitals and private clinics. In addition to external factors such as modern medicine, TCM’s development is mainly affected by the internal influence of funds. Government investment intervention is necessary if PTHs want to survive and continue fulfilling their mission [7]
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