Staff retention after the privatization of township-village health centers: a case study from the Haimen City of East China

BACKGROUND Township-village health centers in rural areas play an important role in health service system in China. In East China's Jiangsu Province, the City of Haimen privatized all 25 township-village health centers in 2002. This study assesses the effect of privatization on staff retention among these health centers. METHODS This is a retrospective study based on 10-year administrative data from Haimen City. Three waves of administrative data were collected in 2000 (2 years before privatization), 2005 (3 years after privatization) and 2009 (7 years after privatization) for all health care providers in Haimen City, including 3 county hospitals, 6 central township health centers (CTHC) and 25 township-village health centers (TVHC). The effect of privatization on TVHCs' staff retention was evaluated in comparison with the other two types of health care providers. We conducted focus groups with people from Haimen Bureau of Health and various health care providers to help understand the context of these administrative statistics. RESULTS Each township-village health centers had an average of 40 staff members before the privatization, and the majority of those staff members were their permanent staff. In 2005, three years after the privatization, a substantial amount of staff decrease (from 39.7 staff members per TVHC to 27.5 per TVHC) occurred in these township-village health centers. From 2000 to 2009, the total payroll in TVHCs decreased by almost 29%, while the number of their permanent staff members and nurses decreased by more than 40%. Among the two types of health care providers that did not go through a privatization, those central township health centers had no significant change on their payroll size during this period whereas the county hospitals' average payroll size actually increased by 20%, especially for the number of doctors. In addition, the average salary and caseload in TVHC showed similar decreasing trends from 2000 to 2009, while no such trends can be observed among the other two types of providers that did not undergo privatization. CONCLUSION The privatization of township-village health center could have adverse effects on their staff retention, a phenomenon that occurs with a decrease in salary and caseload in these centers. To ensure that these health institutions keep providing health care for rural communities, a stronger social safety net and stronger financing of rural health insurance might be helpful in their staff retention.