1. Medical service cost
Medical service cost refers to the sum of the expenses paid by the medical unit for the provision of medical services. First of all, the cost of medical services is the main component of medical prices, is the most basic and major factors in the composition of medical prices. Generally speaking, the size of the cost to a large extent reflects the size of the quality of medical services, and is directly proportional to the level of medical prices. The value of medical services, like the value of other commodities, depends on the amount of socially necessary labor time it consumes. This consumption of socially necessary labor time includes both the consumption of materialized labor and the consumption of living labor. The consumption of materialized labor refers to the instruments, equipment, sanitary materials, etc., consumed in the provision of health services, the value of which is transferred to the health service commodity. The consumption of living labor creates new value, which is divided into two parts: one part is the labor of medical workers for themselves, which belongs to the consumption of necessary labor; the other part of labor consumption belongs to the labor of medical workers for the society. Secondly, the cost of medical services is the boundary for setting medical prices. In general, the price of medical services should be roughly in line with its value. But due to the influence of supply and demand, or for the implementation of national health policy. So that the price of certain medical services are systematically deviated from its value, this is also possible.
2. Supply and demand
The relationship between price and supply and demand is mutual influence, mutual constraints. On the one hand, the price operation regulates the supply and demand, on the other hand, the supply and demand situation and constrain the direction of price movement. When demand exceeds supply, the price on the basis of the value of the movement in the direction of the high direction of the price rise; when the supply exceeds demand, the price on the basis of the value of the movement in the direction of the low direction of the price fall.
The special nature of medical services weakens the influence of supply and demand on the price of medical services. In the medical service market, medical service is a highly specialized service provided by medical personnel, professionalism and technical requirements are very high, it is difficult for ordinary patients to grasp the complex medical knowledge, and the cost of people searching for medical service-related information is also relatively high, so the information asymmetry problem in the medical service market shows more serious. Doctors, with their dual roles as medical service providers and patient agents, can create additional demand for medical services. Moreover, the demand for medical services is relatively inelastic, the consumption of medical services is mandatory, and although patients may react to the price changes of medical services, the sensitivity of the reaction is not high. In the case of inelastic demand for medical services, medical service providers can gain more revenue by raising prices, giving them a potential incentive to raise prices.
3. Financial subsidies
Since medical service is a quasi-public **** product with no exclusivity of consumption but with competition, medical service products have strong positive externalities, and it is necessary for the government to provide financial subsidies for medical treatment in order to improve the cost compensation mechanism of medical price formation. Most of China's medical institutions belong to the non-profit nature, its income mainly from three parts: financial subsidies, medical service prices and drug costs. Among them, both financial subsidies and medical service charges are in essence a kind of compensation for the operating costs of medical institutions.
4. Price policy
Because of the special characteristics of the medical service market, in different countries and different forms of medical insurance, the implementation of different prices to carry out macro-control. China's health care is the implementation of a certain welfare policy of public welfare undertakings, the implementation of unified leadership of the hierarchical management of medical prices. The value of medical services is not fully realized through the market; the part of the value that reflects welfare is realized in the form of financial subsidies. The impact of the country's price policy on the formation of health service prices is mainly reflected in the following: first, health price decision-making has evolved towards scientific decision-making, and the formulation of health prices has begun to focus on the results of research on health prices, with some of the results of that research being applied to health price decision-making; second, health service price decision-making takes into account both the cost of health service items and the ability of consumers to pay; third, health service prices have gradually been implemented hierarchical management, increasing the autonomy of local governments and the flexibility of price management.
5. Payment Methods for Medical Expenses
The payment methods for medical expenses have an incentive and orientation effect on medical service providers. Common payment methods include payment by service item and payment by disease. Under the pay-per-service approach to healthcare payment, healthcare providers are reimbursed for all the services they provide and they do not bear any financial risk. By providing appropriate financial incentives to influence the behavior of healthcare providers, pay-for-service is able to prevent healthcare providers from prolonging hospital stays or providing unnecessary and dispensable healthcare services in order to reduce costs or lower the rate of cost escalation, and to control excessive rises in healthcare costs.