Table 3.

Provider payment methods and their impacts on cost control of health care in selected cities of China

		Shanghai	Shenzhen	Mudanjiang
Provider payment methods		• Global budget as main method; • Case-based payment for specific services [10].	• Fixed unit rate for inpatient services; • Case-based payment for specific services [10].	• Case-based payment as main method; • Fixed unit rate and FFS for specific services [10].
	OP services/ CHCs	Global budget	FFS for outpatient services	Fixed unit rate for OP visits.
	IP admission	Global budget, while case-based payment used for selected diseases	A fixed unit rate payment for hospital admissions	Case-based payment for IP admission, with capped annual ceiling.
	Special cases/services	Flat daily rate payment for inpatients with mental health problems	Case-based payment for normal baby deliveries	FFS for specific services as defined.
Other cost control measures	Rational use of drugs and high tech	Drug expenditure as % of total health revenue of designated hospitals by health insurance scheme should reduce year by year; Regulate the services and prices of high technology related services [11].	A monitoring and evaluation of prescribed drugs introduced in all the public hospitals. Expenditure of antibiotics should not be more than 20% of the total drug expenditures.	Each prescription provides patients with drugs for only up to 3 days [14].
	Service delivery management	Strengthening management of service referring system.	Defining the ratio of outpatient visits to IP admission to control induced hospital admissions [13].	Level of case-based payment or unit rate differs between different levels of hospitals [15].
Impacts	Cost escalation of health care	The annual increase rate of health care expenditure for main health insurance schemes has been around 11.7% a level similar to the annual GDP growth rate in Shanghai [12].	Average health expenditure per the insured has been maintained at a stable level (e.g., RBM 646.2 yuan in 2003, RBM 587.3 yuan in 2004)	The increases in OP and IP expenses were slower than the increase of average GDP per capita. The 2007 statistical data show that the average expenditure per hospital admission in the city was 28% lower than the national average [16].
	Health insurance funds	A balanced situation maintained in terms of incomes and expenditures.	The health insurance fund maintains a modest surplus annually	The health insurance fund has a modest surplus.