Jia Wan wen ^*

• Zhejiang University of Finance and Economics, Hangzhou, China

Introduction: Relaxing entry regulation for private hospitals and fostering competition in the healthcare market are crucial prerequisites for addressing the diverse healthcare demands of the population and promoting the development of a Healthy China. This study aims to comprehensively evaluate the health effect of relaxing entry regulation for private hospitals and to examine its nonlinear characteristics. Methods: Using panel data from 31 provinces in mainland China, this study employs a fixed effects panel data model to investigate the health effect of relaxing entry regulation for private hospitals. To examine the potential nonlinear relationship, a panel threshold model is also employed. This study also employs a dynamic panel model as the econometric method to perform regression analysis for robustness testing. Results: The empirical findings indicate that relaxing entry regulation for private hospitals significantly improves the residents’ health level. This conclusion remains robust when different explanatory variables, measurement models and modified samples are applied. The heterogeneity analysis reveals that the health benefits of private hospital market entry are more pronounced in Central-Western region, regions with high medical resource endowment, and regions with High-quality competition. Furthermore, the health effect of relaxing entry regulation for private hospitals exhibits nonlinear characteristics: it weakens as economic development level reaches a certain threshold and becomes more pronounced as educational attainment reaches a specific threshold. Discussion: Based on these empirical results, Chinese provinces can be classified into three distinct types to guide the development of differentiated policies tailored to local conditions. This study provides valuable theoretical insights into promoting a fair competition mechanism in the healthcare market, enhancing the quality of private hospitals, and improving the overall health level of residents in China and other developing countries facing similar challenges.