Market Failure and Government Regulation: Perspectives in China's Medical Insurance System Reform

摘要

Market mechanism can be ineffective in pubic domain. Market failure will lead to the inefficient allocation of medical resources. Government regulation can make up for market failure. For seeking effective way in medical insurance system reform, this paper surveyed marketization and government regulation in medical insurance system reform in China. Normative analysis and empirical analysis methods were used in this paper. Through the statement of the main performances of market failure in medical service industry, this paper proposed specific policies of government regulation for remedying market failure. The paper puts forward that the combination of market mechanism and government regulation is very important in the reform of China's medical insurance system.