[Differences in the formation mechanism of performance-based compensation in public hospitals with different...

One of the explicit goals of public hospital salary reform is to gradually and steadily narrow the salary gap among public hospitals. This study, taking public hospitals at different administrative levels as its starting point, seeks to investigate the differences in the formation mechanisms of performance-based pay.

From June to November 2024, a purposeful sampling strategy was adopted. A total of 43 in-depth interviews were conducted across 14 public hospitals located in a certain municipality directly under the central government. These hospitals covered three administrative tiers: the national level, the provincial and ministerial level, and the prefectural and municipal level. All interview data were analyzed using grounded theory methodology.

Through three-level coding, a total of seven core categories were extracted: external constraints, strategic positioning, market capabilities, business structure, incentive systems, management capabilities, and personnel characteristics. These seven factors jointly influenced performance-based salary distribution in public hospitals, but their specific manifestations and interactions showed marked differences across hospitals at different administrative levels. Specifically, public hospitals at higher administrative levels might be fully exempt from wage total amount constraints, or, even when operating within the total framework, still retained a considerably large distributable space. Relying on their high-level strategic positioning, these hospitals developed strong market capabilities and a business structure dominated by high-pricing medical services. They adopted a metric-based, incremental incentive model that allocated rewards directly to individual physicians, with the incentive scope covering the entire chain of medical care, education, and research. In contrast, public hospitals at lower administrative levels faced triple constraints: insufficient bargaining power in the healthcare market, limited and unstable patient sources, and a single compensation pathway heavily reliant on service volume. Their business structure was mainly composed of low-pricing projects with limited profitability. Consequently, they were forced to adopt a position-based performance model, where the incentive scope narrowed to basic medical quality, leaving these hospitals struggling with fragile incentives and persistent talent loss.

Public hospitals at different administrative levels present structural differences in their mechanisms for determining performance-based salaries. During the top-down transmission of reform policies, the hierarchical institutional environment, together with stratified market capabilities and management capacities, acts as a multi-layer filter. This filtering process leads to heterogeneous policy performances across different hospital tiers.