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Purpose

The purpose of this paper is to reveal the problems associated with unsatisfactory delivery of services in the current healthcare system of China as experienced by patients of diverse social‐economic backgrounds, including service quality, accessibility and affordability.

Design/methodology/approach

Summarizing the developmental problems of China's contemporary healthcare system, this article is principally a literature review to investigate interdisciplinary issues, including the role of social medical insurance agency, continuous quality improvement and performance measurement system.

Findings

The problems associated with unsatisfactory results of the output from the current healthcare system include the level of quality of services, accessibility and affordability, experienced by the patients of various social economic backgrounds. Developing an integrated system to provide adequate performance measurement complementary with the existing compliance emphasis is suggested, in order to uphold a continuous improvement initiative.

Research limitations/implications

This article is based on interdisciplinary literature review, examining current problems in China's healthcare system and qualitative analysis of the phenomenon. No data are collected to examine the problems identified. In‐depth, ethnographic studies would enable further understanding about the hurdles in the development of a quality healthcare system.

Practical implications

Provides a practical framework for stakeholders to develop an integrated performance measurement system to rationalize resource allocation process that enhances continuous quality improvement.

Originality/value

This paper suggests the adoption of an approach of management science in dealing with China's healthcare system problems and that some fundamental issues found to be critical in developed countries' experience, when striving for performance improvement are not attained under China's current healthcare system. Explores the fundamental issues pertinent to China's current healthcare system and the possible use of performance measurement system for dealing with existing deficiencies.

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