Factors that influence inpatient vs outpatient utilization in the private sector in China : an ecological study

Abstract

The Chinese healthcare market is a lucrative opportunity for private investors. In recent years, the government is gradually opening up the private healthcare market and encouraging the flow of foreign capital into the sector in various forms of cooperation. In the 12 five-year plan released by the State Council of China by 2012, the government further allowed private insurance and private hospitals to take part in the health sector by offering more flexibilities and preferential treatment to the private sector, aiming to share 20% of the total healthcare market in 2015.

The aim of the paper is to examine the role of private hospitals in China and investigate the relationship of factors that influence the inpatient and outpatient utilization of private hospitals in China. Using ecological data from the China Health Statistical Yearbook, data from 2006, 2011 and 2013 were selected for an analysis. Univariate analysis and linear regression model are run on the data with the number of outpatient and inpatient visits as the independent variables and age structure, gender, urban-rural ratio and regional income as the dependent variables for the analysis.

The findings show a consistent pattern. The descriptive result indicates an increasing trend in both outpatient and inpatient services to private hospitals. Outpatient visits increased three times from 130.324 to 310.609 (p<0.001) while inpatient visits increased from 2.807 to 22.575 (p<0.001) in the period between 2006 to 2013. The dominant factors influencing the inpatient and outpatient utilization to private hospitals are mainly male, the middle age group (15-65) and people in the Western region. The middle age group accounts for about 7 times (p<0.001) higher utilization rate than the younger and older age groups while the Western region accounts for 60% (p<0.001) higher utilization than the richer Eastern and Middle regions. The result illustrates the gap between inpatient and outpatient hospitals as well as the factors with a higher utilization rate to private hospitals.

The analysis shows that middle aged people in the rural and Western area in China tend to have a higher utilization rate to private hospitals. This is attributed to the problem of public hospitals and a lack of primary care that have diverted residents to visit private instead of public hospitals. Additionally, private hospitals in the Western region tend to be tier-2 or lower level hospitals that are smaller in scale and offer more specialized or general acute services. They are not high-end private hospitals in the Eastern region and are therefore more affordable to the general public. The implementation of the New Cooperative Insurance Scheme after health reform has also provided additional security to the residents and encouraged the use of hospitals at different levels.

Therefore private health services are not limited to the high-income level groups. The flexibility structure of private hospitals allows them to penetrate to rural areas where public hospitals fail to reach. With increased government support in the future, it is expected that more private health services will be developed. The paper aims to show that private health services are not necessarily high-end services designed for the rich, the profit-seeking and flexible structure allow them to provide health services that are crucial for the lower income groups as well.