Impact of government subsidy reforms on primary health care efficiency in rural eastern China: an interrupted time series analysis.

BACKGROUND: Despite rising government subsidies, inefficiencies persist in China’s primary health-care system. We evaluated an eastern rural pilot that shifted subsidies from passive grants to strategic purchasing via fixed salaries plus activity-based payments using resource-based relative value units (RVUs). METHODS: Interrupted time series (January 2015 - December 2022) assess the instantaneous and long-term effects of the reform (implemented January 2017) on monthly RVUs per employee across all primary health institutions (PHIs) and three sub-categories (central town/street PHIs, other PHIs, remote countryside PHIs). COVID-19 onset (January 2020) was incorporated as a secondary intervention to control for its confounding effect. RESULTS: Post-reform, RVUs per employee were associated with a 61.17% level increase and a sustained upward slope (+3.13; 95% CI 1.65–4.61).The post-COVID slope was associated with a deceleration of −1.74 RVUs per month (95% CI:−3.23 to −0.24), consistent with pandemic disruption rather than definitive causation. Remote countryside PHIs showed no immediate level change (p = 0.18) but exhibited a significantly steeper post-reform slope (β₃ = +7.58; 95% CI: 3.42–11.75) and the steepest post-pandemic deceleration (slope change: −9.35; 95% CI:−12.14 to −6.55), indicating slope-based responsiveness. Cross-group comparisons suggest that smaller PHIs with higher subsidy dependence were more responsive to both the reform and the pandemic’s disruptive effects, although this association does not establish causation. CONCLUSIONS: Strategic purchasing was associated with moderate PHC efficiency gains in rural eastern China. Smaller, remote institutions demonstrated greater slope-based responsiveness to policy changes yet remained more vulnerable in terms of slope to external shocks such as COVID-19. Long-term efficiency gains require targeted support for underserved PHIs and continued refinement of activity-based payment mechanisms.