Financing Medical Care Services

Abstract

The focus of this chapter concerns the changing balance among three major funding sources to medical care. It examines the trend of growth and decline of franchise funding relative to the two public funding sources (government subsidies and public insurances) during the period of economic reform. An analysis is devoted to the issue of shrinkage of government subsidies that was inadvertently caused by decentralization of managerial powers from the central to the provincial and local level, coupled with the pro-growth policy advocated by the government prior to the early 2000s. The study treats the decline and restoration of public expenditures (government’s subsidies and public insurances) as a long-term process, dictated by the progress of institutional and policy restructuring. In addition, it tries to make a preliminary assessment on the extent medical care is politicized in the process of policymaking.