Effects of County Public Hospital Reform on Procurement Costs and Volume of Antibiotics: A Quasi-Natural Experiment in Hubei Province, China

Background: The overuse of antibiotics has become a major public health challenge worldwide, especially in low- and middle-income countries, including China. In 2009, the Chinese government launched a series of measures to de-incentivise over-prescription in public health facilities, including decoupling the link between facility income and the sale of medicines. Objectives: We evaluated the effects of these measures on procurement costs and the volume of antibiotics in county public hospitals. Methods: The study was undertaken in the Hubei province of China, where 64 county public hospitals implemented the reform in sequence at three different stages. A quasi-natural experiment design was employed. We performed generalised linear regressions with a difference-in-differences approach using 22,713 procurement records of antibiotics from November 2014 to December 2016. Results: The regression results showed that the reform contributed to a 14.79% increase in total costs for antibiotics (p = 0.013), particularly costs for injectable antibiotics (p = 0.022) and first-line antibiotics (p = 0.030). The procurement prices for antibiotics remained largely comparable to those in the control group, but the reform led to a 17.30% increase in the procurement volume (expressed as defined daily doses) of second-line antibiotics (p = 0.032). Conclusions: County public hospitals procured more antibiotics and greater numbers of expensive antibiotics, such as those administered via injection, to compensate for the loss of income from the sale of medicines, leading to an increased total cost of antibiotics.