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

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). 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. 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. 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.