- THE ANANLYSIS AND EVALUATION OF HEALTH POLICY
4.1 Health Reformation: the Functions of Governmentsand Markets
4.1.1 the Targets of Health Reformation
4.1.1.1 Allocating the health resources reasonably
From economic standpoint, when we allocate health resources, we should put resources as many as possible into the realm of greatest marginal income until all realms’ marginal incomes equal to each other. But, in the actual decision, it seems impossible to precisely calculate the marginal income of each realm and its law of gradual decrease. However, one point is clear that it is right to put more resources into the fields with great social benefit, low investment and high output.
4.1.1.2 Solving the problem of inequality in healthcare
Equalityof healthcare refers to the equalityof healthcare resources allocation or equality on receiving health services between different individuals and groups. In health policy, it usually refers to wide and equal accessibility to the reasonable health services and impartially distribution of the load of collecting health funds. That’s justice. In field of health, we should manage to diminish the difference on basic healthy service between the rich and the poor and keeping improving all people’s health, which is the concentrated illustration of pursuing fairness.
4.1.2 The economic characteristic of health service
4.1.2.1 Consumers are lack of information: The consumer’s lack of information about the merchandise that is, health service, is one of the main economic characters. When people go shopping, they always have their intentions and ideas in advance. For example, when to buy clothes, the customers know the style and the size, they can chose color, quality and producers area freely and they can also compare it with those in other shops. After all this they may make a choice. Since the consumers of healthcare learn little about medical knowledge and they cannot judge whatdiseases they are suffering from, what kinds of treatments they need and how much they should pay, nor can they compare the charge standards and the quality of services. All they can do is to obey doctors’ orders.
4.1.2.2 The passivenessof consumers: lacking of medical knowledge causes the consumers to be passive. In another word, consumers can’t control the sort, quantity and quality of medical service and pay the cost passively. Thus consumers can’t control their own medical cost. It’s another economic character of health service that suppliers decide the sort and quantity and consumers pay the costs passively.
4.1.2.3 Uncertainty of consumption: The outbreak of diseases is undeterminable and consumer’s need for health service is undeterminable either. They don’t know when they will get trouble and what kind of diseases they will catch.
4.1.2.4 The special action of consumers: Health service market is a monopolistic market in which the supplier is the controller. So the supplier has the power to induce health needs. In another word, the supplier of service may offer the unnecessary, unreasonable and even excessive health service such as big-prescription, expansive remedy and unreasonable advanced examine for their own economic interests. This is a kind of expression of morality degeneration of suppliers. People call this kind of action of doctor the doctor’ goals on income. Because of the supplier’s special position, they master the decision authority of medical service and the control power of medical cost, expressing the resource and manage, monopolize to a greater or lesser extent.
4.1.2.5 The outer profit characteristic of health service: taking preventing and curing of epidemics as example, when health services take vaccination for easy-infected people or heal the patients, the whole throng are benefited from these services. On another way, the health services achieve positive result beyond individual, which embody the outer profit characteristic of health service. The services, such as public health services, including prohibiting the occurrence of diseases, preventing and curing of epidemics, health education by TV and broadcasting etc, have benefit not only on service objects but also on non-service objects, enterprises and the whole society. Therefore, health services have the characteristics of public benefit, sharing together, nonexclusive.
4.1.2.6 The real-time characteristic of production and consumption of health service: unlike the production of common commodities, the providing process of health service is also the consumption process. They have no time interval between each other. Health service can’t be stored and transporting and haven’t wholesale and retail. This economic characteristic bring forward high request on reasonable allocation of health resources.
4.1.2.7 Paying by the third side: except for medical treatment paid by oneself, most people who have taken the medical insurance system needn’t pay the whole cost by themselves and the great mass of the medical cost was paid by the third side (the government, medical insurance companies or other fund institutions). This situation causes the deficiency of costing consciousness of consumers, stimulating excessive needs and utilization of health services, which is the “harm of morality” of consumers leaded by insurance.
4.1.2.8 The specialty of outcomes of health service: the final outputs of health service are the improvement of health, preventing and curing of diseases. For example, they are whether the incidence rate of epidemic and case rate of chronic diseases decreased and whether the targets of people’s health condition, such as death rate, death-rate of infants and expected life span, are improved and heightened.
4.1.3 The market of health service
With the establishment of socialist market economy, health service is inducted of market mechanisms, which can better optimize the allocation of health resources and reasonable use of them, which is concrete expressed by the followings.
4.1.3.1 The market of health service takes fundamental effect on reasonable allocation of health resources.
4.1.3.2 Health service market is inevitably with competitions. There are tremendous extrinsic pressures for every medical institution that survival of the fittest in the competition. As a result, every medical institution has to regulate the formation and item of the health services it provided and to do it best to promote quality of care and strengthen management.
4.1.3.3 Health service market is advantageous to promote medical technology progression. The enhance of medicine demand and violent competition in health service market will inevitably result in the emerge of the situation in which medical units use new technology, advance medicine technology to meet medical needs of people of different social status.
4.1.3.4 The key of market is price, the regulating and directing of price is important to market running and the locating of resources.
The health service market has some disadvantages in the next two sites: From the site of the effectiveness of resource-locating, because there are monopoly, unbalance of information and external effect in health service market, the price of health service market became disturbed, resulting in ineffective use of health resources;from the site of social fairness, the reduction of health service market can not clear the unfairness induced from poverty in healthcare.
4.1.4 Disorders of the market
4.1.4.1 The limited competition and the unfairness of chances result monopoly. Under the benefit oriented market principle, many hospitals in large cities begin a competition in enlarging scale and buying high-techfacilities and therefore, health resources flowed into large hospitals with hightechnology, good medical facilities and strong economic powers in large cities ,and this process strengthen the monopoly position of big hospitals, enlarging the differences between urban and rural areas, prevention and treatment and among different regions. The health resources focus on large cities and poverty rural areas suffered from the inefficient of health resources, resulting in a situation that shortage company with waste.
4.1.4.2 The information is asymmetry between doctors and patients and some medical services and technology are over used. Because there is no encourage mechanisms promoting the efficiency of health care resource utilization, accompanying with the reform of business accounting with a department as a basic unit, the healthcare providers have to provide more services to obtain returns, accumulating it to distribute bonus and make up the shortage of health service compensation.
4.1.4.3 Improper competition results in disorder in medical care providing. Disordered and non-ruling competitions resulted in abnormal medical activities. Some medical staff use examinations excessively, especially those with expensive facilities and large prescriptions with expensive and import medicine. Some medicine dealers, to obtain high profit, connect directly with clinic doctors. Doctors receive bonus according to the amount of medicine their proscribed. This kind of activities promotes the unfairness of medical expenditure.
4.1.4.4 The market mechanism is unfair; the market only use price to regulate relationship between the supply and requirements. Because the external effect the market price deviate from its cost and the price system no longer provide necessary accurate information that get efficiency leading to the ineffective location of resource. Thus price itself can’t make the resources flow into the side of sheer public benefit and active external effective field. In order to allocate the resources efficiently, the government should provide products with external effects. Because of the key fact of fault in health service market, the governments’ get involved into medical service is inevitable. In healthcare field the government should make choice for the following problems: one is the investment level and the second is how to produce health service in the best style; the last one is the allocation manner of health service, which in fact is the manifestation of economic efficiency in production and consumption of health service. The first two problems involved economic efficiency and the reasonable resource location and the third one directly involved with the fairness of health service.
4.1.5 The Theoretical Foundation of the Governments’ Intervening in Public Health
4.1.5.1 The government is replaceable when providing public products and pre-products of health service. The reason is as follows: First, the production of public products is not for profits and the consumption is free. So,the producer as the body of market does not provide this kind of production except the governments (or charitable organizations). Second, if there is no government involved in, the health services with best external effects can’t get good social effects. The reason is when consuming this kind of production individually, the consumer could not get all of the profits and thus they don’t want to pay the full price. Although consumers themselves may make it effective, they can’t have the best effects for the whole society. Thirdly, providing the two kinds of productions effectively depends on the governments’ financial assistance.
4.1.5.2 The reasonable interventions of the governments are the essential compensations to market mechanism. The international experiences show that: when the market is ineffective, government is irreplaceable in the building of regular, efficient, equitable medical service and medical insurance market. Because the attacks of diseases (especial serious diseases) are random and unforeseeable, to deal with them often consumes expensive medical services (namely, personal consumable). Therefore, the effective way to deal with this kind of service is to construct medical insurance market aiming at share venture. Compared with other insurances, to provide insurance to health venture has many characteristics and difficulties resulting in all kinds of market ineffectiveness, such as the imbalance of information allocation and ethic injury. This means that market regulation alone is incapable of forming a regular, efficient and equitable medical insurance market. Therefore intervene of the government is the only choice.
4.1.5.3 Governments should work hard to improve the fairness of healthcare allocation and insure poor people receive basic medical services. Reducing poverty is the direct theory foundation of government’s intervenes in medical service. Compared with people lived over poverty, to the same sanitary problem, people in poverty may face more risks; the same health intervene may get them more advantage too. Providing free health services or compensating private medical units and the poor through government’s intervene can insure the poorer receive basic medical service and then enhance social work productivity and obtain great social effects. On the concern of its contents, basic medical service includes nursing of sick children, nursing at perinatal stage, family planning, prohibition of TB and sex diseases, light inflammation injury therapy and outpatient insult etc. Because the poorer are limited by poor economic endurance, they are difficult to pay the cost and just depending on market regulation often makes them involved in the bad circle of being ill because of poverty and being poor because of illness. This is not only an economic problem but also a political problem. The government is duty-bound.
Although the default of health service market provides causes for government’s involving into health service market, the intervene of the government often pays cost. It is reasonable only when the cost of the government’s involving is less than the loss made by the default of health service market, or the profit resulting from the government’s intervene is more than the loss made by the default of health service market.
4.1.6 The comprehensive ways of government’s involving in healthcare
Governments have three ways to regulate health service laws, administration and economics .To solve many prominent problems in health service in shannxi province and to enhance economic efficiency, comprehensive methods of intervene is necessary.
4.1.6.1 Using several ways to solve the imbalance and the unreasonable distribution of resource allocation so as to insure the production outputs which are public and have best external effects. To speak concretely, we should strengthen the designation of health service, taking most of the limited public health funds into disease control and inspection, immunity, health monitor and health law construction etc; regulating the position of health resource now according to regional health design, enlarging the investment on the poor districts and poor people making the poorer receive basic medical service.
4.1.6.2 Using several ways to construct medical service and medical insurance market gradually and stably, bringing market into full play in the allocation of health resources. For example, to provide the consumer with information from administrative ways, to reduce the aimless consumption, cultivating and regulating medical market. Law and economic ways are useful to improve equity of healthcare. To date, special attention should be paid to the recovering and consummating of the rural co-operative medical system should to make farm especially the poorer may share a feasible and effective medical insurance system.
4.1.6.3 Using several ways to improve the health knowledge and health care consciousness in the whole society, Including of undertaking health education and dissemination of healthknowledge. These two measures are agree with the principle of cost- efficient and had ever been neglected. In our country in which people have poor health consciousness and the health resources are insufficient, to use universe health knowledge to promote health care is the best choice of governments to enhance economic efficiency in health field.
4.1.7 Ineffectiveness of planning or failure of governmental interference
4.1.7.1 Under the mechanism of planned economy, medical organizations are set by administrative districts, different trades and departments, forming a pattern featuring isolated, small and complete and big and complete. That leads to the repetitive equipment, idleness and waste of health resources.
4.1.7.2 Using administrative means as primary way, the highly concentrated planned management institution causedcorruption and bureaucratism. The abuse of administrative interference, the powerless of legal administration along with the limitations of administrative and economic abilities are often unable to use health resources efficiently.
4.1.7.3 The negative effects of health welfare policy
Under the mechanism of planned economy, healthcare as some social welfare seldom considers the service market and its profit, and its serving charge is much less than that its cost. All above cause the deficiency of competition and encouragement inside the healthcare system and low productivity. Besides, the incompletion of socialized medicine also causes the abnormal rapid rise in medical costs.
4.1.8 Exerting positive effect of plan and market, allocating health resources reasonably
Since the 50’s, many countries that had established market economy are tending to reinforce their functions in healthcare. There are three economic theories to support this point of view. The first is that if the government pays healthcare charges for the poor, the bad result of poverty caused by diseases or disease itsself can be reduced. The second is that some activities aiming in improvingpeople’s health can produce pure public interests or big outer effects that market cannot produce or can but just a little. The last is that the market’s failure in health care and health insurance.