Between Profit and Legitimacy A Case Study of Two Successful Township Health Centers in Rural China

Abstract

The Township Health Centers (THCs), which serve China’s rural residents are hospitals with Chinese characteristics. A comparative study of two THCs found that their performance is linked to their successful adaptation to the new economic and institutional context within which they operate. It found that health facility managers need to balance the need to generate revenue with the need to maintain their good reputation with government and the community It identified three major influences on their performance: the pattern of economic incentives, formal and informal rules of behavior and the history and management arrangements of the facility. It concluded that tailoring administrative rules to embrace the market, responding actively to social expectations and proper selection of THC director are all beneficial to THC performance