ABSTRACT
The hospital sector dominates the health care system in urban areas and consumes around 65 per cent of the total health expenditure. There was a rapid increase of 25 per cent per annum in hospital expenditures from the mid-1980s to mid-1990s (Ministry of Health, 1995). Influenced by national economic reforms, financial policies and administrative mechanisms for public hospitals have substantially changed since the early 1980s. In response to these changes, public hospitals adjusted their strategies in both administration and provision of health services. Both external and internal changes in the hospital sector are important to determine efficiency in the use of health resources and quality of services provided. The purpose of this chapter is to present the overall changes in hospital policies, hospital internal administration, productivity and cost in Zibo and Nantong. It starts by summarizing reforms surrounding public hospitals, and goes on to describe changes in administrative mechanisms taken by hospitals, analyse changes in productivity, quality and case mix and present out-patient and in-patient costs. The fmal sections discuss policy implications.
