The US and China have a similar problem: getting patients to use less expensive locations for routine medical care. Consumers in both countries with choices want the “best”. Regulators and payers in both countries are struggling to find a mix of incentives that will convince patients to use lower cost facilities.

Every government official, academic researcher, and medical staff person I have met so far in China has emphasized the critical importance of getting more Chinese citizens to use local community health centers for their primary and routine care. Many hoped something like the British primary care gatekeeping system would emerge to contain costs, increase quality, and provide greater equity. They fear that unless care seeking patterns change health system costs will become unsustainable.

When I asked my interviewees what they and their families do when they need any medical care every one of them said they go directly to the highest level teaching hospital. Every other person I met from tour guides to high government officials said the same thing. Not feeling well? Head for the biggest hospital, even though the wait might be long, the doctor impolite and rushed, and the cost high. It’s a problem.

Like most institutions in China for the past 5000 years, there is a hierarchy in the medical care system. At the base are primary health centers located in most urban neighborhoods and rural communities. They have doctors, often both “western” and traditional Chinese Medicine, nurses, and other health professionals. The facilities include outpatient clinics, pharmacies, again often western and traditional medicines, basic labs, xray, and often a small number of beds that provide rehabilitation and palliative care. They are owned by the local governments. The staff are government employees.

In the middle are community hospitals that provide maternity, pediatric, medical and general surgery services organized by specialty. They have inpatient and outpatient services. They often have emergency rooms that are open at night. These hospitals are staffed by full time doctors, nurses and other personnel. The hospitals are owned by the local and district governments but are not formally affiliated with a medical school. I was told many are underutilized.

The top tier are tertiary hospitals affiliated with a medical school. These are almost all in cities and can have more than 1000 beds and large outpatient clinics. They are owned by the local or province government. The medical staffs are organized by specialty departments. The most senior doctors often have both hospital and medical school appointments but all are government employees. Some of the senior physicians have ways to supplement their incomes, including through informal gifts and payments from patients.

Patients in China are free to go to any health facility at any time. There are no gatekeepers. A majority of Chinese citizens, I was repeatedly told, go the to teaching hospitals, bypassing health centers and community hospitals to get there. Repeat visitors usually know the clinic or doctor they want to see so they go to the appointment window to get an appointment (hopefully that day). New patients or a patient with a new problem start at a triage desk where a doctor or nurse hears why the patients came and tells them the clinic they should use. Patients go to a window to make an appointment and then to another to pay the physician and testing fees in advance, some of which are now covered by insurance. They pay again at the end of the visit for the medications they need and any treatments they received during the visit. (More on the evolution of insurance and out of pocket costs in another post).

Despite the large numbers of people at the hospitals, patients expect to be seen without delay. The waits they encounter increase tension between doctors who feel overworked and harried by the heavy patient loads and the patients and family members who expect to be seen immediately. I witnessed several heated exchanges even during brief visits to community centers and hospitals. Doctors told me confrontations are very frequent. Nevertheless, the tertiary hospital is the place of choice in China.

Why? There appears to be an almost total lack of confidence in the quality of care at the community centers. To understand why, anecdotes may be more important than statistics. One student told me: “Whenever I or one of my friends went to a community center, all they did was send us to the hospital to see a specialist, so why bother to go there first?” Another said: “Only old people use the community centers because they can get their medicine there for less money and it is convenient. But they go to the hospital when they are sick. “ (Doctors at the community health centers I visited confirmed this.)

A middle aged former teacher said: “Of course we all go to the hospital. Everybody knows the doctors at the health centers aren’t any good. The best doctors are always at the tier three hospitals”. Several academics explained why this perception is so widely held. Admission to medical school is based on one national exam. The students with the highest grades are admitted to the highest ranking medical schools where the focus is entirely on training specialists. Who will work in tertiary care hospitals. Students with lower grades on the exam go to regional medical colleges and usually do not get admitted to the specialty training programs. They staff the lower tiered facilities where they get low pay and little respect.

The Chinese government is using financial incentives to get people to select community health centers first. It is simultaneously lowering fees for prescriptions, especially when bought at a community health center, and raising fees for physician visits. In theory the changes are supposed to net out as little change for the patients but there is broad skepticism this is true. I was told by both doctors and academics that higher fees will bring higher respect for physicians and cover some of the loss of profits they have been making on prescription markups. The lower prescription prices are related to new government requirements that prohibit hospitals and doctors from marking up medicine prices as a way of raising revenue for the hospitals and doctors.

The government is also encouraging teaching hospitals to develop “networks” of care with local hospitals and community centers to increase collaboration among them and to get better trained physicians into the community centers, at least part of the time. My sense is the policy makers hope some form of gatekeeping will emerge without having to mandate it. These changes have been talked about for several years but they were formally enacted and start dates announced in early April, 2017. The information systems needed to operate an integrated system do not exist. At the moment, almost all records are still on paper and there is almost no communication back and forth across levels of the system.

A brand new highly innovative hospital I visited is using a home grown application on “We Chat” (the ubiquitous web/phone engine for everything) to post patient’s lab and test results. Patients can download the information to their personal account to show doctors at other facilities. The government has announced a plan and timetable to create a single nationwide medical information/insurance information network for everyone, but the people I met think it is years away.

The US is using similar approaches to get people to use generic medicines, primary care instead of emergency rooms and local hospitals instead tertiary centers through differential co-pays and co-insurance and gatekeeping rules. So far, the results in the US have been modest and mixed. Consumer reaction has been mostly negative, especially on restrictions on using tertiary hospitals. It is far too early to know what the effects will be in China. Jointly examining these policy incentives might be a very interesting way to learn more about both Chinese and American consumer health behavior. Every academic I met was keenly interested in knowing if or how American financial and behavioral incentives work.