How Does Medical Consortium Affect Public Hospital Performance? Evidence from China

Abstract

The medical consortium represents a potential solution to the fragmentation and hospital-centered nature of China's health system. This paper utilizes hospital-level data from Beijing, spanning 2010 to 2018, to assess the impact of medical consortia on public hospital performance at different levels, with a focus on institutional isomorphism theory. The analysis was conducted using the Generalized Method of Moments (GMM) method, with the findings summarized as follows: (1) The establishment of medical consortia positively influenced outpatient and inpatient services, though it negatively impacted hospital revenue across the entire sample. (2) Further analysis demonstrated that the formation of medical consortia significantly improved outpatient services, inpatient services, and revenue in secondary public hospitals. (3) In contrast, for tertiary public hospitals, the establishment of medical consortia did not affect outpatient performance but negatively impacted both inpatient performance and hospital revenue. The results of this study offer the latest evidence on the impact of integrated care on public hospital performance. In light of these findings, it can be concluded that promoting medical consortia is an effective strategy for improving the performance of public hospitals. This approach has been recognized by the government as a crucial policy direction for advancing integrated care. However, it is essential to implement measures aimed at mitigating the negative effects of medical consortia on the performance of tertiary public hospitals.