LAUSR

In the last two decades, developing countries have increasingly engaged in improving the governance of their health systems and promoting policy design to strengthen their health governance capacity. Although many well-designed national policy strategies have been promulgated, obstacles to policy implementation and compliance among localities may undermine these efforts, particularly in decentralized health systems. Studies on health governance have rarely adopted a central-local analysis to investigate in detail local governments' distinct experiences, orientations, and dynamics in implementing the same national policy initiative. This study examines the policy orientations of prefectural governments in strengthening governance in health financing in China, which has transitioned from emphasizing the approach of fiscal resource input to that of marketization promotion and cost-containment regulation enforcement at the national level since 2009. Employing text-mining methodologies, we analyzed health policy documents issued by multi-level governments after 2009. The analysis revealed three salient findings. First, compared to higher-level authorities, prefectural governments generally opted to use fiscal resource input over marketization promotion and cost-containment regulation enforcement between 2009 and 2020. Second, policy choices of prefectural governments varied considerably in terms of enforcing cost-containment regulations during the same period. Third, the extent of the prefectural government's orientation toward marketization promotion or cost-containment regulation enforcement was not only determined by the top-down orders of higher-level authorities but was also incentivized by the government's fiscal dependency and the policy orientations of peer governments. These findings contribute to the health governance literature by providing an overview of local discretion in policy choices, and the political and fiscal dynamics of local policy orientations in promoting health governance in a decentralized health system.