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Notes
to a multi-indicator performance bonus system in Bangpu Medical College Hospital found that unnecessary health care fell, and expenditure per inpatient day decreased from Y 345 to Y 298 after implementation of the new scheme in 2001. 63. A public services unit (PSU) has been defined by the State Council (State Council 1998) as a “social service organization established by the state for the purpose of social public benefit”; it is created “by a state organ or other organization with state-owned assets” and carries out activities in education, science and technology, culture, health, or other areas. For a detailed discussion, see studies by the World Bank (2005) and the OECD (2005a). No firm data specifies what percentage of health care providers are PSUs. In 2005, around 85 percent of hospitals and nearly all THCs were classified as nonprofits (MOH 2006). The majority of these providers are government-owned, although a sizable proportion of hospitals are owned and operated by SOEs. The nonprofit classification does not overlap perfectly with the PSU classification, however, as the former includes some private nonprofit providers. 64. In many respects, permanent PSU staff have similar terms and conditions to civil servants. They have lifetime contracts, and a more generous salary and benefit package than “contract staff.” 65. For a long time, managers were permitted to distribute operational surpluses through a “welfare fund” to staff in the form of bonuses based on individual or departmental contributions to activities or revenues. Then new regulations in November 1998 required that all expenditures associated with wages, allowances, and cash bonuses must be explicitly posted as costs (MOF and MOH 1998). Despite the constraint, in practice, providers continue to exercise considerable latitude in how surpluses are used. 66. This has included making the selection of managers and staff more transparent and competitive, or relying more on outsourcing of support services such as facility management, cleaning, food services, security, and supply management (Jia 2003; Ye et al. 2003; Xiang and Yang 2004). Other initiatives to strengthen hospital organization and administration have focused on improving management information and financial control—for example, through the establishment of improved health management information systems. There are also examples of contract management, including by the local health bureaus in Wuxi City (Yang 2003). To date, very little is known about the impact of management reforms. 67. These efforts were meant to promote rationalization of health-system resources and strengthen coordination. Although formally adopted as a health policy tool, regional health planning has had limited impact on the configuration and organization of health services. 68. A number of studies have shown that outreach can be a cost-effective way of providing specialist services to rural and remote populations without adversely affecting quality.