How Corruption Blights China’s Health Care System

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Carlos Barria / Reuters

A man walks in front of a GlaxoSmithKline factory in Shanghai's Pudong district on July 11, 2013

The anxious Chinese woman wanted to ensure that her mother would receive the best care during her upcoming gall-bladder surgery. So the woman, surnamed Cheng, cornered the dean of surgery at a hospital in eastern China’s Anhui province and pressed an envelope in the doctor’s hands. Inside the hongbao — or “red packet,” as such cash bequests are known in China — was 1,000 yuan, or around $160. The doctor took the envelope without questions. “Everybody does this,” Cheng recalls. “If you don’t give a hongbao, you’ll stand out.”

China’s medical system has to treat the world’s largest national population, a massive cohort that is rapidly aging. The illnesses that plague Chinese patients are shifting from life-threatening third-world ailments that can be treated relatively cheaply to the more complex and chronic infirmities of economically developed societies. It’s a daunting task — and an expensive one. Since China’s transition from a completely socialist model, medical bills have become one of the most common factors sending Chinese into poverty. That’s because hospitals have had their government funding slashed, forcing clinics to pass the cost burden to patients. In recent years, the central government has rolled out public health coverage to increase access to affordable care.

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These reforms notwithstanding, China’s medical system is still deeply diseased, riddled by corruption that impedes efficient caregiving and sends costs skyrocketing for patients. Beyond the proliferation of hongbao, hospitals recommend unnecessary but expensive tests and procedures to keep afloat departments now starved of public money. Extra fees for ambiguous items often end up on medical bills. Medical manufacturers and drug companies are also complicit, handing out cash to health workers in exchange for their products being used in hospitals.

China’s corrupt health care sector was exposed last month when foreign pharmaceutical giant GlaxoSmithKline was accused by government regulators of bribery and overcharging for its drugs. GSK staff in China have been detained and implicated in allegedly channeling up to $490 million through conduits to physicians and other medical staff to prescribe their drugs at inflated prices. In a statement, GSK admitted that “certain senior executives … appear to have acted outside of our processes and controls which breaches Chinese law.” Other Western pharmaceutical companies are now being probed by government investigators, although these firms’ representatives maintain the inquiries are routine. Whatever the outcome, the fact remains that China’s doctors and clinics are woefully underfunded, leaving ample space for the kind of bribery that is poisoning the country’s health care system.

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In Beijing, for instance, the average after-tax monthly income of a deputy chief physician is less than about $480. Salaries for other Chinese white collar professionals have dramatically increased in recent years, but doctors’ wages have stagnated. “When I was young, being a doctor was still a highly esteemed job and salaries of doctors were comparatively high,” says a senior surgeon at a top Beijing hospital. “Since Chinese doctors are now very underpaid, why are there still so many people who want to study medicine? One reason is that they are really interested in this job, and they can get professional satisfaction from curing patients. The second reason is hongbao and kickbacks.”

So endemic is corruption that cleaning out the system will require a herculean effort — a reality that mirrors the difficulties faced by China’s President Xi Jinping as he spearheads a campaign to tackle graft among Communist Party ranks. Says the Beijing surgeon, who did not want his name used because of the sensitivity of the subject: “If the government is really serious, all the Chinese doctors and drug companies will be found guilty because no drug manufacturer or doctor is innocent. If doctors are to be laid off for receiving hongbao, then every Chinese doctor will be laid off. But then who will take care of the patients?”

Already, patients are struggling with spiraling costs, even as China has launched a basic public health-insurance program. In 2000, surgery for stomach cancer, to take one example, would have cost a patient around $1,600. Today, the fee is five times that. And yet at certain Beijing hospitals, surgeons are paid less than $50 for performing a relatively complicated operation. Little wonder that red envelopes are so eagerly accepted. Bribes don’t just come in cash form. One Beijing contemporary-art-gallery owner says that a surprising demographic of art buyers are patients who need an appropriate gift for their doctors. (The price of Chinese modern art has rapidly appreciated in recent years.) An apple a day may keep the doctor away, but a contemporary canvas apparently keeps other physicians at work.

— With reporting by Gu Yongqiang and Chengcheng Jiang / Beijing

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11 comments
lucio
lucio

The corruption is more lethal weapon destruction wich can be used against a community.

Your action is similar to the caner's action in the human body. 

HopeToSeeSlim
HopeToSeeSlim

Accurate analysis...作为一个中国人,我对我的国家感到绝望。共产党会通过限制网络自由如此卑劣的手段来操控民众思想,什么东西都要和谐,容不下任何不同的声音,什么东西都要限制一下。一党独裁,贪污腐败还用说...

swagger
swagger

they sound like total amateurs compared to health insurance rackets here.

HollyKick
HollyKick

and why is this news ? what about america .. where are we with the highly overpriced system .. probably the worst "best healthcare" in the world.

MaryBiniam
MaryBiniam

I have visited a few Chinese doctors and my experience has been that they are in it for the love of the profession and they are intuitive and provide services far above and beyond the call of duty

jefforsythe9
jefforsythe9

The entire Chinese Communist Party is a gangster regime that operates on corruption. Its leaders have billions of dollars stashed in foreign accounts. Along with financial corruption, the CCP offers its people no human rights and has murdered over eighty million of its people since 1949. The people are just beginning to wake up to the millions of atrocities that have been and are still being committed by the cruel Party

rihannk
rihannk

The hongbao practise is expected.  When my wife delivered a baby locally, by the head of the gynae department, the gynae (western and Chinese trained) expected a hongbao.  She told us via one of the nurses that this is the normal practise. Given the chaotic state of local hospitals, who will not want to ensure the best treatment?  What is the alternative -  not giving a hongbao and risk bad treatment?

What I have also experienced first hand was the care and diligence of several Chinese doctors who treated members of my family from bone fractures to other ailments.  Their fees were nothing compared to what we would have paid in the West.  Many of the doctors in China act to a high ethical and moral code that compels them to be in the service of people.  They serve and almost do not expect anything in return.  

I have heard that many service oriented professions are regarded in this manner in China.  Lawyers and scientists are also traditionally not paid a lot becasue they are in the service of the people.  

The article points fingers at the "Chinese medical system" but this is not the root of the problem.  This is another example of how the pressure of capitalism and the influence of the west are changing China for the worse.  Materialistic pressure is what is fuelling these practises.    

What is a real shame and it is sad that the writer did not mention the "western hospitals" in China.  In Shanghai the Shanghai United hospital charges RMB200,000 (USD33,000) for the delivery of a baby.  This exludes the miriad tests in the 9 months before delivery.  Expats that had to spend a day in hospital are bombarded with a battery of tests and more tests and medicine they don't need.  One day in Shanghai United will set you back at least USD3000, excluding any treatment, medicine or tests.  Patients are bombarded with all sort of "what if" and "have to be careful of this" and "cannot rule out that" scenarios.   These exhorbitant costs are funded by international medical aids or companies in China.  The Chinese counterparts see this and a vicious circle and practise ensues.

TomInShanghai
TomInShanghai

Don't let the 'shiny' cities of Shanghai, Beijing, and Shenzhen fool you, China is a true, 100% 3rd world country.  Corruption is baked into every level of society from top to bottom.  The 'government' is actually an ongoing criminal enterprise whose sole objective is to enrich itself.  


China_will_never_change.  Either the 'West' plays by China's rules or will be left behind after they've stolen everything and taken advantage of everything they can.

HollyKick
HollyKick

@MaryBiniam Doctors of any country would be better than america .. American doctors only care about money and care about how much little info can be given .. they would order 100 tests for something they already know ... they will not be able to say anything for sure. Price for just meeting a primary care physician is 500$ ... basically a nexus of doctors and insurance companies ... in my opinion american medical system is the worse. 

ysprefer
ysprefer

@rihannk  you are right, the author of this article just focus on some parts of the medical system, not every doctor in China like this, as my personal experience, my wife delivered a boy, and a surgery of my own do not require me to give any gift to the doctor, while the doctor still conduct the operation according to highest standard.              There is no such a thing that American doctor are better than Chinese, what they want is just benefit for themselves. And the scandal exposed this time is a English Company, who use their money to corrupt the medical system of China, a few thousand RMB to the doctor is not right, but understandable, but this kind of systematically targeted corruption, must be treated seriously by the government, to protect the interest of normal people.