State versus private provision: How does China's market-oriented reform affect healthcare delivery?

The role of the government in health care provision remains a contested issue worldwide. Public hospitals dominate China's health care industry. However, in the early 2000s, the eastern China city of Suqian privatized all its hospitals and relaxed entry barriers for private hospitals. We assess the impact of the pro-market reform on hospital performance using a differences-in-differences approach. We find that the pro-market reform decreased medical price and expenditure, improved self-reported health outcomes, and reduced search time and cost for patients. We show that after the reform, Suqian residents had greater trust in doctors than did residents from other cities.