Most cases of acute childhood diarrhoea can be treated effectively and cheaply with oral rehydration salts and, when appropriate, with suitable antimicrobials. But many cases instead are treated with expensive, unnecessary and potentially dangerous drugs and intravenous fluids. Here, work in Yunnan Province (in South-Western China) is described. Reporting how village and township hospital doctors would treat hypothetical cases, the paper documents their inclination to overtreat. It compares the costs of such over-treatment with the costs of treating the cases according to the WHO guidelines. The economic inefficiency of current case management is confirmed. The reliance of the hospitals' finances on the profits from sales of drugs and materials is also recorded. The paper concludes that reform which reduces clinicians' financial dependence on the profits from the sale of drugs and materials might improve the efficiency of case management.
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