Path analysis and empirical test of medical service enhancement for common prosperity under government participation

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TL;DR

This study finds that improvements in medical service fairness and efficiency significantly promote common prosperity in China, with medical efficiency having a more pronounced effect. However, the relationship between medical efficiency and common prosperity is inverted U-shaped, meaning excessive efficiency gains can hinder prosperity when government participation exceeds 1.4% of GDP. Government participation plays a critical moderating role, and policymakers must balance medical equity and efficiency to avoid diminishing returns.

Full summary

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**Background:** The improvement of medical services is a key factor in enhancing workforce quality and achieving common prosperity in China. However, contradictions between limited medical resources and expanding demand, along with regional imbalances and government 'absence' in medical service investment, create uncertainty. This study investigates whether medical service quality contributes to common prosperity, whether fairness and efficiency have consistent effects, and how government participation moderates this relationship.

**Methods:** The authors constructed a comprehensive evaluation system for common prosperity using 2 primary indicators, 6 secondary indicators, 14 tertiary indicators, and 27 bottom indicators, measured via the entropy weight method. Medical service fairness (Msf) was measured as the product of accessibility (medical beds per capita) and availability (ratio of disposable income to medical expenditure). Medical service efficiency (Mse) was measured using the Malmquist index from DEA analysis, with inputs including health personnel, total assets, and total costs, and outputs including number of consultations and discharges. Government participation (Govpart) was proxied by the ratio of local healthcare fiscal expenditure to local GDP. Panel data from 31 Chinese provinces (2010–2019) were analyzed using systematic GMM and panel threshold regression models.

**Key Results:** The first-order lagged term of the common prosperity index was significant at the 1% level across all models, indicating strong time continuity. In the baseline model (Equation 1), both medical fairness (lnMsf coefficient = 0.027, p < 0.01) and medical efficiency (Mse coefficient = 0.065, p < 0.01) significantly promoted common prosperity. Government participation itself had a significant positive effect (coefficient = 0.687, p < 0.05 in Equation 2). The quadratic term of medical efficiency was negative and significant (coefficient = −0.586, p < 0.05), confirming an inverted U-shaped relationship. The interaction terms between government participation and both fairness (coefficient = 0.498, p < 0.01) and efficiency (coefficient = 0.315, p < 0.05) were positive and significant. Threshold regression revealed a single threshold for fairness (threshold = 0.9% government participation): below 0.9%, coefficient = 0.042 (p < 0.01); above 0.9%, coefficient = 0.049 (p < 0.01). For efficiency, a double threshold was found: below 1.1%, coefficient = 0.028 (p < 0.01); between 1.1% and 1.4%, coefficient = 0.056 (p < 0.01); above 1.4%, coefficient = −0.008 (p < 0.05).

**Clinical Implications:** While not a clinical study, the findings have significant implications for health policy and public health. The results suggest that increasing government investment in medical services can enhance common prosperity, but only up to a threshold (1.4% of GDP for efficiency). Beyond this point, further government spending may hinder prosperity, likely due to resource crowding-out effects or efficiency gains that compromise equity. Policymakers should adopt a 'localized' and 'targeted' approach: central and western regions may benefit from increased participation, while eastern regions must balance equity and efficiency. The government should focus on 'covering the bottom line' and ensuring basic medical service accessibility and availability, while encouraging market forces to meet diversified health needs.