Health care utilization after economic reform in mainland China: A multinomial logit approach

The support and expansion of traditional Chinese medicine as a policy direc tive since the early, 1950s resulted from the fear on the part of the Chine se government that Western medicine would supplant Chinese Medicine. The Ch inese government expanded Chinese medicine by subsidizing traditional hospi tals; however many of these hospitals have been operating at a deficit sinc e the institution of economic reforms in the early 1980s. There is a concer n that many traditional hospitals lose large numbers of outpatients to comp eting modern Western hospitals, which have better equipment and more qualif ied staff. The objective of this paper is to examine whether a reduction in Chinese medicine outpatient services is a result of peoples preferences, A multinomial logit model is applied to data from a 1989 China Health and Nu trition Survey. The major finding is that most demographic factors do not c ause significant variations in Chinese medical service choices. Even when s uffering a serious illness, people do not appear to prefer Western medicine to Chinese medicine. A potential counter-hypothesis offered is that a decr ease in Chinese medicine use may be due to inefficient management.