“The Impacts of Marketization and Subsidies on the Treatment Quality Performance of the Chinese Health-care Sector”

Sungko Li, Hong Kong Baptist University

Xinju He, Hong Kong Baptist University

This paper investigates the treatment quality of the health-care sector in China during 2009 – 2014. The treatment quality of a region is higher if relatively more medical services are provided with fewer deaths. Our research question is twofold: (i) Does the pressure of profit-making lower treatment quality by causing more deaths? (ii) Can government subsidy raise treatment quality by releasing the pressure from market competition? Our empirical results show that the treatment quality in China was improving during the studied period. There are evidences that both market-oriented reform and government subsidy can boost the treatment quality of the health sector. Thus the co-existence of market force and government intervention is beneficial to the patients.