Reshaping the Regional Order of Health Care Resources in China: The Institutional Participants in an Inter-City Integrated Delivery System

Over the past decades, pro-growth policies in China led to rapid economic development but overlooked the provision of health care services. Recently, increasing attention is paid to the emergence of integrated delivery systems (IDS) in China, which is envisioned to consolidate regional health care resources more effectively by facilitating patient referral among hospitals. IDS at an inter-city scale is particularly interesting because it involves both the local governments and the hospitals. Incentives among them will affect the development of an inter-city IDS. This paper thereby builds an economic model to examine both the inter-local government and inter-hospital incentives when participating in an inter-city IDS in China. The findings suggest that while inter-hospital incentives matter, inter-local government incentives should also be considered because the missing incentives at the local government level may oppose the development of inter-city IDSs.