ABSTRACT
Chapter 6 focuses on sovereign planners’ efforts to control the price of medical care in order to ensure affordability, covering such key issues as the institutional and managerial changes involved, the process of decentralization, major policy initiatives, the policy tools and mechanisms of price control, managerial and operational issues, and key actors involved. As the study argues, there are two basic issues in the design of price control over the medical care services in China. One has to do with unrealistic assessment of the value of medical/technical components of curative services in relations to drugs and medical devices (especially advanced technology), resulting in cost shift among various budgetary categories. The other concerns the failure to address the side effects of franchise funding in the re-distribution of financial burden among hospital management, users and insurers. As a result, the efforts of price control faced the formidable challenges to correct the tendency of revenue maximization of hospital management in collaboration with medical personnel.
