New Institutional Economics Analysis of Doctor-patient Relationship in China

With the imperfect health care system and the increasing needs for medical care in China, it is not difficult to find more and more reports about the disputes, or even serious conflicts between doctors and patients in domestic hospitals, which obviously hinders the further development of medical care in China. The paper tries to use the new institutional economics theory to analyze the status of doctor-patient relationship in China, such as health bonuses of migration, cost of physician growth, transaction cost of "difficult and expensive" treatment and the external factors of the doctor-patient conflicts. The paper suggests that China need to improve the overall level of health care coordination so as to achieve cost internalization, promote scientific determination of property rights so as to transfer health care relation. China also needs to constrain physician behaviors by institutional and economic means and establish a multi-party financing mechanism to share the risk of medical care and thus resolve the conflicts between doctors and patients. Only then a sustainable development of medical care can be achieved in China.