Impact of zero-mark-up medicines policy on hospital revenue structure: a panel data analysis of 136 public tertiary hospitals in China, 2012–2020

ObjectiveTo quantify the overall and dynamic effects of the implementation of the zero-mark-up medicines policy on the proportionate revenue generated from medicines, medical services and government subsidies at Chinese tertiary public hospitals.MethodsThe revenue data of 136 tertiary public hospitals from 2012 to 2020 and the implementation-time framework of zero-mark-up medicines policy of these hospitals were obtained from the institutional survey of the third-party evaluation of the China Healthcare Improvement Initiative. The study adopted the time-varying difference-in-differences method and combined it with the event study approach to estimate the effects of the zero-mark-up medicines policy.ResultsFollowing the implementation of the policy, the proportionate medicines revenue decreased by 3.23% (p<0.001); the proportionate medical services revenue increased by 3.48% (p=0.001); and the difference in the proportionate government subsidies revenue was not significant. In the year of implementation, the proportion of revenue generated from medicines decreased by 7.76% (p=0.0148); and that from medical services increased by 8.62% (p=0.0167). The effect of the policy gradually strengthened thereafter. In 2020, the sixth year after some hospitals started the implementation of the policy, the share of revenue generated from medicines decreased the most by 18.43% (p=0.0151), and that generated from medical services increased the most by 15.29% (p=0.0219). The share of revenue generated from government subsidies increased by 2%–5% in the second, third, fifth and sixth years following implementation (p<0.05).ConclusionsAlthough the policy goal of adjusting hospital revenue structure has been achieved, the findings were insufficient to conclude whether the policy goal of establishing a scientific compensation mechanism was met by increasing the price of medical services and government input. Additionally, whether there was an unexpected policy effect requires further analysis.

Reduced hospital revenue due to error code diagnosis in the implementation of INA-CBGs

In the case-mix system, diagnostic codes are used as the basis for classifying health service rates. The difference in tariffs between hospitals and the accuracy of the diagnosis code causes a gap where there are hospitals that benefit and are disadvantaged by the Indonesian case-based groups (INA-CBGs) tariff policy. This study assesses the gap factor between hospital rates and INA-CBGs rates, which include hospital characteristics and the accuracy of the diagnosis code. Samples were taken of 100 medical record documents of inpatients at two hospitals in Surakarta, Central Java, Indonesia in 2020 by stratified random sampling. Data were collected by observation and analyzed by Chi-Square test. There were errors in the primary diagnosis code 11 (32.35%), secondary diagnosis code 19 (55.88%), combination diagnosis code 4 (11.76%). Changes in the INA-CBG code that caused the inaccuracy of the claim rate were 26 (59.09%) case-mix main groups (CMG) codes, 44 (100%) CBG-specific codes, 31 (70.45%) severity level codes. Public-private hospitals with class B experienced a decrease in income of IDR 46,081,900 (-17.50%), while special government hospitals with class A experienced an additional income of IDR 99,733,869 (38.31%). An accurate diagnostic code can increase the odds by 42.128 times the accuracy of the INA-CBGs rate (b=42.128; 95% CI=11.127 to 159.497; p&lt;0.001).

Effects of Chinese medical pricing reform on the structure of hospital revenue and healthcare expenditure in county hospital: an interrupted time series analysis

Background China has initiated a medical pricing reform to combat the overuse of drugs and relieve the financial burden of patients. This paper aims to analyze the effect of medical pricing reform on revenue structure and healthcare expenditure of county public hospitals in Guangdong province. Methods Based on the monthly data from January 2013 to August 2019, we use interrupted time series design to evaluate the effects of medical pricing reform on healthcare expenditure in both outpatients and inpatients. A counterfactual is also established to examine the net effect of the policy. Results The proportion of drug revenue decreased from 35 % to 2015 to 29.7 % in 2019, and the revenue from medical services and inspection increased 3.2 and 3 % respectively. Meanwhile, the increasing trend of total expenditure and its main components is slowed down, especially the drug expense and medical consumable expense for inpatients after the Zero Mark-up Drug policy (coefficient = -18.76, p < 0.01; coefficient = -13.41, p < 0.01, respectively). However, the growth of inspection expense for outpatients continues to increase, while the healthcare expenditure for inpatients experiences an instant increase after the Zero Mark-up Medical Consumables policy. In terms of the net effect, most of healthcare expenditure in both outpatient and inpatient experienced a negative net growth from 2015 to 2019. Conclusions The medical pricing reform is a valuable attempt in controlling the unreasonable increase of medical expenses. In the meantime, the unexpected increase in inspection expenditure and insufficient compensation from medical service adjustment should draw the attention of the policymakers.

Effects of Chinese Medical Pricing Reform on the Structure of Hospital Revenue and Healthcare Expenditure in County Hospital: An Interrupted Time Series Analysis

Background China has initiated a medical pricing reform to combat the overuse of drugs and relieve the financial burden of patients. This paper aims to analyze the effect of medical pricing reform on revenue structure and healthcare expenditure of county public hospitals in Guangdong province. Methods Based on the monthly data from January 2013 to August 2019, we use interrupted time series design to evaluate the effects of medical pricing reform on healthcare expenditure in both outpatients and inpatients. A counterfactual is also established to examine the net effect of the policy. Results The proportion of drug revenue decreased from 35% in 2015 to 29.7% in 2019, and the revenue from medical services and inspection increased 3.2% and 3% respectively. Meanwhile, the increasing trend of total expenditure and its main components is slowed down, especially the drug expense and medical consumable expense for inpatients after the Zero Mark-up Drug policy. However, the growth of inspection expense for outpatients continues to increase, while the healthcare expenditure for inpatients experiences an instant increase after the Zero Mark-up Medical Consumables policy. Conclusion The medical pricing reform is a valuable attempt in controlling the unreasonable increase of medical expenses. In the meantime, the unexpected increase in inspection expenditure and insufficient compensation from medical service adjustment should draw the attention of the policymakers.

Does the separating of hospital revenue from drug sales reduce the burden on patients? Evidence from China

Background Since 2015, all pilot cities of public hospital reform in China have allowed the zero-markup drug policy and implemented the policy of Separating of Hospital Revenue from Drug Sales (SHRDS). The objective of this study is to evaluate whether SHRDS policy reduces the burden on patients, and to identify the mechanism through which SHRDS policy affects healthcare expenditure. Methods In this study, we use large sample data of urban employee’s healthcare insurance in Chengdu, and adopt the difference in difference model (DID) to estimate the impact of the SHRDS policy on total healthcare expenditures and drug expenditure of patients, and to provide empirical evidence for deepening medical and health system reform in China. Results After the SHRDS policy’s implementation, the total healthcare expenditure kept growing, but the growth rate slowed down between 2014 to 2015. The total healthcare expenditure of patients decreased by only 0.6%, the actual reimbursement expenditure of patients decreased by 4.1%, the reimbursement ratio decreased by 2.6%. and the drugs expenditure dropped by 14.4%. However, the examinations expenditure increased by 18.2%, material expenditure increased significantly by 38.5%, and nursing expenditure increased by 12.7%. Conclusions After implementing the SHRDS policy, the significant reduction in drug expenditure led to more physicians inducing patients’ healthcare service needs, and the increased social healthcare burden was partially transferred to the patients’ personal economic burden through the decline in the reimbursement ratio. The SHRDS policy is not an effective way to control healthcare expenditure.

Review article on the change in the hospital revenue and healthcare economy during COVID-19 pandemic

The economy of the world has been shaken due to the COVID-19 pandemic situation. Nearly 8% of the world economy has shrunk during this time. Few countries have been identified as more vulnerable to be affected in comparison to others according to the Pandemic Vulnerable Index (PVI). Lot of universities of USA, Australia and UK have suffered from huge financial crisis due to lack of foreign students admission. Lockdown and travel restriction have affected the revenue generation of countries like China, USA, South Africa, India and sub-Saharan countries for which government subsidize were declared. Bangladesh has suffered mostly due to disruption in garment and textile business. Medical tourism also experienced severe financial trauma.