Wage Reforms, Fiscal Policies and their Impact on Doctors’ Clinical Behaviour in China's Public Health Sector

A recent report evaluating the medical reform carried out over the past two decades describes the outcome of the reform as a failure. It contends that the medical reform failed to contain the costs of health care, making medical services less and less accessible to the people, especially the poor. This paper explores how the wage reforms in Chinas public health sector since 1978 have contributed to the failure, with a focus on three new wage schemes: the bonus scheme, the “commission” scheme and the contract responsibility system. The paper argues that the decline of government investment in health care, the government's continuous control of medical services pricing and the pressure for the public medical facilities and professionals to increase their income have not only driven the health costs irrationally high, but also forced the facilities and doctors to resort to illegal means for this income.