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China's Public Hospital Monopoly Problem

More people would have access to health care, and there would be less waiting for doctors if public hospitals were divided and more private hospitals were created in China.

Inside a hospital in the Qianjiang District of Chongqing, southwest China
Inside a hospital in the Qianjiang District of Chongqing, southwest China
Cao Jian

-OpEd-

BEIJING — China's large public hospitals these days are basically remnants of the planned economy era. They monopolize the best human resources, enjoy the most government subsidies, and occupy the commanding heights of clinical academic research. They are the aristocrats and the nobility of the health care sector.

But to achieve accessibility and fairness and to solve the problem of horrendously long waits to see doctors or be admitted to the hospital, more space should be given to privately managed hospitals. Dividing certain large public hospitals would be a scientific and rational choice. Determining which hospitals should stay as is and which should be split would depend on a review procedure and their results.

In terms of economy of scale, a certain critical point in operational efficiency is bound to decline when a hospital grows too large. Public hospitals are non-lucrative organizations, but as institutional units they all run on taxpayer money. Thus the public has the right to demand that they are more efficiently operated. When hospitals are too big, patients spend too much time shuttling back and forth between different departments.

Also, large public hospitals usually develop using national resources, and yet they only serve the welfare of the people where the hospitals are located. If large hospitals were divided, their dominant disciplines would be spread over a larger area. The two mutually independent hospitals would most likely provide medical treatment to more patients and at the same time promote their interactive development in the discipline.

In terms of competition, splitting big public hospitals would be beneficial to China’s overall health care industry. Up to now, hospitals run privately account for only 10% of China's market share. Large public hospitals use various advantages in continuing to enforce their monopoly positions. Ending that would be good news for the development of privately run hospitals and would represent a new opportunity for China's medium-sized public hospitals.

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