Conclusion

Any effort to expand the zero-markup policy to other county hospitals will demand involvement by the government. As shown by the study, following the implementation of the zero-markup policy, the government’s actual subsidy increased by 1130 thousand Yuan, according to the hospital financial records. However, according to the ‘15% markup principle’, the subsidy-in-need from the government should have been 186.7 thousand Yuan. Based on the alternative analysis using the ‘natural growth principle’, we found that the government would not need to subsidize the hospital at all. This is because the health care revenue increased by 1576.6 thousand Yuan, which is a 5% increase.