Doctor incentive, hospital efficiency and medical disputes : evidence from a randomized controlled trial and a policy experiment in China

Abstract

Over the last forty years, the world has witnessed huge economic gains and continuous improvement in life expectancy, as well as rapid growth of health expenditure. However, due to the low efficiency and lacking incentive, medical spending from public hospital sector has posed huge burdens on public finance. How to offer residents an extensive and accessible medical service with limited funding is nowadays a real challenge for policy planners. In this thesis, we empirically explore two mechanisms that might influence the efficiency and satisfaction of public medical sector. First, we believe a customized incentive compensation structure for doctors is able to better balance hospital profitability and doctor talent retention. We focus on a sound doctor joining mechanism and conducted a randomized controlled trial experiment in a for-profit hospital in Chinese mainland. Using a difference-in-differences specification, we empirically examine the effect of engagement system, and find that a market-oriented salary structure can significantly improve the mobility of premium medical resources and increase doctor motivation, thus contributing to a higher level of overall medical services. Our study helps explore a balanced and relatively optimal compensation contract mechanism for doctors and contributes to better understanding the operation and management in for-profit hospitals. Second, we pay attention to medical disputes between patients and hospitals, and study a policy experiment that might influence the outcome of medical disputes and the quality of medical services. In October 2018, the State Council of China promulgated and implemented the Regulation on the Prevention and Handling of Medical Disputes, focusing on mediating medical disputes, strengthening medical safety management, and standardizing the identification mechanism and legal liability for medical damage. We explore the direct impact and significance of the implementation of the new Regulation on the resolution of medical disputes in China based on the case data of medical disputes in China over the past seven years. Our empirical findings show that the policy helps strengthen the management of medical quality, clarify legal responsibilities in cure process, and makes doctors more prudent in performing their duties. Our paper provides new insights for domestic further researches related to the economic analysis with public medical practice.