Township hospitals, which are an important link of the Chinese rural healthcare system, were affected by the successive socio-economic reforms since the 1980s. As a consequence, their utilization declined. From longitudinal data covering nine years (2000-2008) and 24 township hospitals randomly selected in Weifang prefecture (Shandong province, China), this article analyses the environmental and supply-side determinants of the volume of township hospitals curative activities, measured by the number of outpatient visits and that of discharged patients. The Hausman-Taylor and the Fixed-Effect Vector Decomposition estimators are used in order to cope with time-invariant variables. Results of the estimations are confronted and highlight similar outcomes. Findings show that the New Rural Cooperative Medical Scheme, introduced in 2003, has contributed to increase the activity of township hospitals, although financial barriers remain to the access to expensive medical services. The analyses underline also that referral practices between health facilities levels should be reinforced and that the size of the township hospitals needs to be adequate with environmental factors as they appear to be over-sized.Health insurance, China, Healthcare services, Hausman-Taylor, Fixed-effects vector decomposition
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