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Over the past decades, pro-growth policies in China led to rapid economic development but overlooked the provision of health care services. Recently, increasing attention is paid to the emergence of integrated delivery systems (IDS) in China, which is envisioned to consolidate regional health care resources more effectively by facilitating patient referral among hospitals. IDS at an inter-city scale is particularly interesting because it involves both the local governments and the hospitals. Incentives among them will affect the develo