Objectives: To describe effects of health financing on providers' opinions and prescribing behavior in rural China.

Methods: A multi-stage sampling procedure was used to select county, township, and village health care facilities. A total of 1,064 health care providers in county, township, and village health care facilities in six counties in central China were randomly selected and surveyed during one week by written questionnaire.

Results: Patient's health financing systems (insurance or out-of-pocket payment), financing methods for health facilities (general budget or fee for service), and payment methods for providers (salary or bonus) influenced provider prescribing. Bonuses could improve the quality of health care, but could also be an incentive to prescribe more drugs or more expensive drugs and other services. The providers were of the view that patients' health financing and ability to pay were the main determinants of the type of treatment. Insured patients could have more access to expensive drugs, referred to specialized health care facilities, and have a higher cure rate (according to the doctor's opinion) for tuberculosis. Most of the clinical doctors said that they prescribed more expensive antibiotics for insured patients and changed prescriptions according to patients' demands, financial ability, and health financing systems in the treatment of some diseases, such as chronic bronchitis, tuberculosis, and hypertension.

Conclusion: The empirical data suggest that the main factor influencing provider prescribing behavior is the economic incentives in relation to health care financing for both health care providers and consumers.