The health care market mechanism can be constructed through the reform the regulator because of the congenial defect in health market which can be reviewed from the medical resource allocation inefficiency, we use the institutional theory to explain the market failure in China. The structure, scale even the technical of the health care organization influenced by the regulation under the special dominate field, under the hospital and special evolving mutually, the core of technology chain in health organization has ex- tended and the overlap service have intensified, which mean the more competition appear in health care market. But the health care price regulator combining the payment of the fee-for-service incent the public hospital compete with adopting the strategy to increase the investment in equipment and the new service project to gain the market power, moreover the public hospital are reluctant to corpo- rate with the primary health facility because of the monopolistic state, while the public hospital strengthen its market power and reduce the division of the health care system through enlarging its size, the hospital competition make the market became less vigor and induce the medical source allocation inefficiency.
Chinese Health Economics
public hospital monopoly
medical resource allocation inefficiency