Recent trends in the commercialization of medical care in China.

ABSTRACT

Commercialization of healthcare is a global trend and many healthcare systems all over the world are affected by it. Privatization, marketization and liberalization are generally distinguished from commercialization in that while the former indicate a shift from state-led provisioning to market-led provisioning or the transfer of state-owned assets to private hands, the latter also takes into account the behaviour of public-owned institutions.1 Commercialization of health services has mainly occurred when low levels of public investment have created a space for private interests to grow. It has also arisen from a generalized crisis due to the rising costs of medical care. These trends have coincided with the rise of neo-liberalism that argues that government-funding of social services is inefficient and called for an enhanced role for the market. Much of the scholarly writing on the roles of the market and the State during the post- 1970s has tended to look upon these two spheres as discrete. However, Mackintosh and Koivusalo1 have argued that this kind of analysis does not capture the interrelatedness of the two sectors and the underlying processes which drive them. They define commercialization as the ‘increasing provision of healthcare services through market relationships to those able to pay; the associated investment in and production of those services for the purpose of cash income or profit; and an increase in the extent to which healthcare finance is derived from payment systems based in individual payment or private insurance.’1 For over three decades there has been an increasing trend towards the commercialization of health services in China. There are discernible phases in this shift, which began with the commercialization of public hospitals and has led to the more recent growth of private for-profit hospitals in the major cities. The Chinese commercialized their health sector fairly rapidly from the mid-1980s. The rationale given by the government was the inability of the State to meet the rising costs of healthcare. Various measures were taken to garner resources for the ailing hospital sector. These ranged from the introduction of user fees to the setting up of State-owned enterprises (SOEs)1 which brought in organizational reforms, finally leading to the autonomization of hospitals. An SOE is a legal entity created by the government. It is partially or wholly owned by the government but is able to participate in commercial activities. Autonomization is a complex process aimed at financial autonomy and autonomy in governance. It has created a distinct separation between administrative