Putian hospital surgeon spills the beans on dodgy practices

by MICHAEL WOODHEAD

Dr Qiu Jianqin is a plastic surgeon turned cosmetic surgeon from Fujian province who has a few unkind things to say about Putian hospitals. In an 'exposure' aired in the Chinese media this week, Dr Qiu talks of his four years working in a Xiamen hospital run by the Putian network - and portrays it as rife with corrupt practices, overcharging, health insurance fraud and substandard clinical practices.

Before I describe these in more detail I should point out that Dr Qiu may well be an aggrieved ex-employee because he has been sacked by the hospital over claims that he was treating patients privately, in an unauthorised way, in his own premises. Dr Qiu and the hospital are now in litigation over unpaid wages, broken contracts etc etc.

The expose comes from the Southern Weekend - based in Guangzhou, which has a reputation for relatively bold investigative journalism.

Dr Qiu says he made the move to the Xiamen New Century hospital in 2011 after becoming burnt out and disillusioned working in the public hospital system. Despite being a senior plastic surgeon, (he is a representative of the Chinese Medical Association Standing Committee of Fujian plastic and cosmetic branch) Dr Qiu says his workload was excessive and the rewards small. The market reforms in the public sector meant that many burns units became more oriented towards lucrative cosmetic surgery, and gave staff commissions and quotas to generate more income for the hospital. And yet at the same time, the hospital still had an iron rice bowl mentality in which they were overstaffed by bureaucrats, says Dr Qiu. The last straw was when his assistant surgeon left over low pay, and Dr Qiu allowed himself to be lured by the promise of the New Century Hospital. He was personally invited by the manager, Su Qincan, who he said spouted a lot of hype but promised a lot of benefits and good facilities.

Su Qincan

Dr Qiu joined the New Century Hospital along with his wife, a senior nurse, but was disappointed to find that the private facility was lacking in many basic facilities such as as resuscitation equipment that are standard in public hospitals.  He wasn't aware initially that it was part of the Putian network, and he had a poor impression of that group. His negative impressions were confirmed when he found that the hospital was now what it purported to be. While claiming to have many different departments, it actually concentrated only on four areas: cosmetic medicine, STDs, obstetrics and dentistry. The other departments - required by health department regulations were 'Potemkin villages' - they were there in name only and were only staffed when health department inspectors visited, at which time they 'borrowed' clinical staff from sister hospitals. The New Century even paid 10,000-30,000 RMB to 'rent' the name plaques of several senior doctors, to make it appear as if they had many eminent consultant physicians and surgeons.

Dr Qiu found that the doctors and managers working at the hospital were unscrupulous profiteers. They would lure in patients, overdiagnose and overtreat their illnesses. In the cosmetic filed, a simple skin fold operation that would typically cost 50 RMB in a public hospital was being billed at 1000 RMB at New Century. If patients complained about costs or about botched procedures the hospital's policy was to engage them with obstructive and expensive legal actions.

The hospital also engaged in routine health insurance fraud - doing extensive cosmetic work such as liposuction and claiming it as appendix removal was one  common example. The hospital accountants became skilled at 'swiping' the health insurance cards of patients, using all their family credit balance on the card even if just one person was being treated at the hospital.

Dr Qiu said this practice was so widespread that the local health authorities must have known but they were also bribed by the hospital. The hospital managers had a well organised system of what Dr Qiu termed "Feeding Putian Cake" - taking officials out to dinner on a monthly basis and allowing them to win 'prizes' of department store spending vouchers worth 1000RMB.

Dr Qiu said that at first he believed this widespread corruption and malpractice was a passing phases as part of the transition to a market-based healthcare system - and he believed he could help improve standards and bring change from within. However, after a couple of years he realised things were getting worse, not better and he started to look for ways out of his five year contract. He was working on commission and described it as being "like forced prostitute"

His managers told his he could not leave and warned him that he would not be able to work anywhere else because his name would be blacklisted if he broke his contract. Things came to a head in 2015 when Dr Qiu kept making complaints and demands for improvements in the hospital. He was told he had been fired - along with his wife. The given reason for his sacking was that he was 'sneaking work home' - seeing patients privately without payment through the hospital. Dr Qiu disputes this. And now he has entered into a litigation with the Putian hospital and its manager Su over unpaid wages and the refusal to hand over his documents and medical licence.

Hospitals heed Xi Jinping's call to make use of "social capital", then rip off investors

by MICHAEL WOODHEAD
One of the cornerstones of Xi Jinping's healthcare reforms is the urging of public hospitals to take advantage of "social capital" (ie private investors) for future expansion and development.

Unfortunately, in China's murky and non-transparent climate of investment, things are quickly going wrong in predictable ways. A hospital in Jiangsu now owes its mom and pop investor almost a billion yuan, according to reports in the People's Daily. The Workers Hospital of Suqian asked locals and employees to put their capital into the hospital's investment fund and promised regular interest and dividend payments.

In 2012, a man called Chen heeded the call to invest in the Suqian hospital to help fund the building of a new hospital and to further develop and expand medical services. The hospital guaranteed a fixed income and this was backed by the local government. Mr Chen put in his 2 million yuan retirement savings and was initially  pleased with the interest payments he received on a regular monthly basis. In fact, Mr Chen was so impressed he persuaded his family and friends to invest their money in the hospital as well. In addition, local TV advertising that was aired to promote the fund resulted in more than 2000 small time investors putting close to 900 million yuan into the Worker's Hospital Investment Fund. However, things started to go wrong in April this year when the hospital defaulted on its interest payments. Investors who asked why they hadn't received their usual payments were fobbed off with non-commital replies.

However, as public complaints and protests increased, the local police and authorities have opened a financial investigation into the missing monies. So far they have found that there is not enough money to pay the interest and also not enough to repay the principal sums that were invested and which most investors are now demanding be repaid.

Several of the hospital financial managers have been detained for further investigation and the local authorities say they are now tracking a number of unauthorised financial investments. It looks very much like the Suqian people have had their social capital blown on the roller coaster Chinese stock market that crashed so spectacularly this year.

Putian cartel?

Meanwhile, China's private hospital market has started to take off in a big way with more than 8000 hospitals and clinics in the loose "Putian Network" forming an procurement alliance. The Putian hospitals network is a loose association of healthcare establishments set up from the 1980s onwards by entrepreneurial families from the Fujian town of the same name. Although suffering from a poor reputation for marketing of dodgy services such as fertility clinics and cosmetic centres, many of the Putian hospitals are trying to transition into more respectable establishments. Several of the hospitals have formed groupings and sought investors through IPOs. Now the Putian group hospitals say they are seeking to consolidate and form buyer's groups to give themselves greater purchasing clout. However, Putian hospital are still suffering from a credibility after being banned from Baidu for their dodgy advertising claims.

Putian: from Fujian VD doctors to private healthcare millionaires and Baidu bashers

by Michael Woodhead
The news that an alliance of private healthcare providers have boycotted Baidu over advertising charges this week requires a bit of background.

The basic story is that the Putian chain of 8600 private hospitals has accused China's number one search engine, Baidu, of hiking the costs for  its paid search 'adwords'. Like Google, Baidu auctions off its keywords to the highest bidder. In the US, Google can charge up to $50 per click through for the most lucrative keywords such as 'insurance' 'loan' and 'attorney ('Better call Saul'?). Advertisers are willing to pay these huge fees because of the high returns they get from having these keyword link straight from the search engine to their site. Likewise in China, Baidu operates a "Pay Per Click" (PPC) advertising sales operation. However, it turns out that in China about 60% of the paid search is for healthcare businesses. This means that words and phrases like 'gynecology' and 'cosmetic surgery' attract sky high adword rates on Baidu. According to one article the cost is as much as Y600 per click.

Resentful at having to pay such high fees for search words, the final straw for healthcare companies came when Baidu announced recently that it would be jacking up its prices by 40% (allegedly).
According to Caixin magazine, this price increase prompted the Putian Health Industry Chamber of Commerce to put out an instruction to all its affiliated 8,600 private hospitals across China to halt all paid promotional activities online. It went further, vowing to stop all cooperation with Baidu and close down all the Putian hospitals accounts with Baidu. Putian said that the advertising price increases meant that "many medical facilities have been reduced to almost working for Internet companies."

However, it's worth noting that Putian is only a loose association of healthcare providers and they are bound by clan ties more than business contracts, for whatever that is worth.The chamber of commerce called for 'unity', making them sound more like a trade union (or cartel).

It's worth pausing here and explaining who and what Putian is/are. The Fujian town has become a byword for private hospitals in the same way that Maotai is associated with hard liquor and Jingdezhen is for crockery. According to this article, the town has spawned (pardon the pun) a nationwide network of healthcare entrepreneurs based on local expertise in private VD clinics. The story goes that a former barefoot doctor called Chen Deliang became successful in the 1980s by selling treatments for ailments that the hospital system wasn't interested in - firstly scabies, then later venereal diseases. Other Putian businessmen followed his lead and they have spread out across China starting up clinics and hospitals that cherry-pick the lucrative but low risk medical treatments - fertility treatment, plastic surgery and dental care are said to be favourites.

Putian people are now said to control up to 80% of China's private healthcare clinics. Most of these attract business via online advertising, hence the Baidu connection. Putian people are also said to be extremely shrewd in business, and thus it is not surprising that when Baidu announced they would be putting up the cost of paid search words to as high as Y999, the Putian entrepreneurs spat the dummy.

The result is a standoff between two giants - Baidu the internet search behemoth and Putian, the biggest network of healthcare providers and thus some of Baidu's most important advertisers. Some say that Putian affiliated clinics account for half of Baidu's 26 billion yuan annual advertising revenue (I find that hard to believe - other estimates put it at a more realistic 6-10%, still, not to be sniffed at).

Baidu, however, is saying that the Putian complaints are not about price increases but about the increasingly strict enforcement of advertising rules about dodgy medical advertising. The Xi Jinping government has been making a lot of noises about cleaning up  unethical advertising and promotions - much of which is related to quack health cures and shonky clinics.

According to Caixin, the search engine Baidu is now seeking to distance itself from the disreputable end of the healthcare sector and align itself with more reputable medical providers. In a way it echoes Google's recent moves to tidy up its medical/health search functions and give more ranking to evidence-based treatments. Only in China this comes with a price - Baidu's share price has taken a hit - and Putian's reach to healthcare consumers has been curtailed.

My take on this? Given that the Chinese government is seeking to increase the influx of social capital (aka private investment) in healthcare to about 20% of all hospitals, they must be daft to estrange Putian. Why not find a way of working with them instead?

China medical news headlines for Saturday 25th January

Bribery and medical profiteering targeted in new campaign
Chinese authorities have launched a major national campaign targeting bad practices in medical services, including excessively high prices for drugs. According to the Global Times the reform campaign will stress better monitoring of drug production and marketing and address inappropriate practices within medical institutions and among medical practitioners. Medical ethics will be further promoted, and bribery in marketing of drugs will be addressed. Deaprtments taking part include the National Health and Familiy Planning Commission. The campaign calls for violators to be identified and cases of bad medical practice to be punished  in a serious way.

STDs a major problem in sex workers
Urgent efforts are needed to tackle the high rates of sexually transmitted diseases among prostitutes in Jiangsu, researchers say. A study of sex workers in Yangzhou and Changzhou found that 15% were infected with chlamydia, 5% had gonnorhoea, 5% had syphilis and 0.2% had HIV infection. The findings are published in PLOS One.

Dietary advice for obese students
Shanghai students should be given dietary advice and better access to health food at school to combat the rising trend in obesity, a political adviser has suggested. According to Shanghai Daily, Chen Lei said 17% of Shanghai school students were obese, three times the national average. Over half of the parents he surveyed expressed dissatisfaction with lunch provided by schools, which often included fried food such as pork and chicken.

Fujian hospital chief arrested for bribery
The president of a hospital in Fujian province has been removed from his post for accepting bribes. ECNS reports that Lu Kaiming, who also served as the vice chairman of the Municipal Committee of the Chinese People's Political Consultative Conference in the city of Sanming, has been detained and investigated for law infringement and serious disciplinary violations. Authorities have confiscated his illegal gains and he will be transferred to a local judicial organ for his alleged crime.

Fujian raises cost of medical treatment

The Fujian Provincial Bureau of Commodity Price and Fujian Provincial Health and Family Planning Commission said on Nov 18 that it will adjust the costs of medical services - including emergency services – from Dec 15.
The commission decided to raise the prices of emergency treatments due to increasing costs - such as those involving operating ambulances - in recent years. The fee for transport by ambulance has been increased from 25 yuan（$4.12）to 35 yuan, and use of a stretcher will cost another 30 yuan,and psychologist will cost another 100 yuan.
The fee for a consultation with a doctor has also increased - a consultation with any doctor up to the grade of supervisor now costs 15 yuan, and a consultation with an associate professor of medicine and above will cost 20 yuan.
The new prices cover a wide range of treatments, including in the fields of neurosurgery, radiotherapy and physiotherapy.
Source: China Daily

Fujian man hijacks ambulance to take girlfriend to hospital

A man named Shi was detained in Fujian province last week after he hijacked an ambulance in an effort to get his ill girlfriend to the hospital, according to reports.
Police said the man will be serving 20 days' detention for "disturbing order at a workplace" after he attacked the ambulance's driver so that he could steer the vehicle.
Netizens are now debating whether or not the man's actions were just, with many praising his determination to help the girl, who was suffering from gas poisoning.
"This just goes to prove that in China you have to do things yourself," one user said.
The woman had originally been admitted to the Xiamen Hospital of Traditional Chinese Medicine but had to be transferred to another hospital with more suitable equipment. Shi, who was impatient after filling out lengthy paperwork, assaulted the ambulance driver so that he could get her to the next location more quickly.
The doctor in the ambulance said in reports that the woman's life had not been in danger.
Source: Shanghaiist

Xiamen should lead in cross-straits medical cooperation

Xiamen, a coastal city in Fujian province, should serve as the pioneer in hosting wholly Taiwan-invested hospitals, a national legislator has suggested.
"The city could become an ideal way to raise cross-Straits medical cooperation to a new level," Chen Zixuan, vice-chairwoman of the Fujian committee of the Taiwan Democratic Self-Government League, one of the eight non-Communist parties on the mainland, said on the sidelines of the ongoing annual session of the 12th National People's Congress.
Since the Western Taiwan Straits Economic Zone was formally created by the State Council in 2011 to accelerate trade with Taiwan, Xiamen has been the province's "initiator" in many areas related to promoting cross-Straits ties, Chen said.
Currently, there are around 4,000 Taiwan-funded enterprises in Xiamen and more than 100,000 Taiwan people are living in the city.
According to the Fujian committee of the Taiwan Democratic Self-Government League, Taiwan people prefer hospitals with a Taiwan background for treatment.
The city has experience in Taiwan-invested hospital services and management, Chen said, as it hosted the province's first mainland-Taiwan jointly funded hospital, Xiamen Chang Gung Hospital, which was established in 2008.
The committee also pointed out that the growing demand for high-end medical services shows the huge potential of the mainland's medical services market.
Taiwan investors are permitted to set up wholly owned hospitals in Fujian, Jiangsu, Guangdong and Hainan provinces, and Shanghai.
Shanghai Landseed International Hospital, the only wholly Taiwan-invested hospital on the mainland, opened for business in Shanghai on June 26.
According to the Ministry of Health, 22 Taiwan-funded hospitals, all joint ventures, had started operation on the mainland by the end of 2011.
Partially due to the high bar set by the ministry, which states that wholly Taiwan-invested hospitals should have a total investment of at least 20 million yuan ($3.2 million), most Taiwan-funded medical establishments on the mainland are still joint ventures, Chen said.
In that case, the health authorities should lower the requirements on total investment, Chen suggested.
Chen said procedures and policies for Taiwan doctors' applying to practice on the mainland should be simplified.
"Taiwan medical practitioners' certificates should be examined every five years, rather than annually," she added.
Fujian Governor Su Shulin said recently that deepening cross-Straits ties, including strengthening medical cooperation, will remain high on the government's agenda over the next five years.
Chen Qiuli, director of Fujian's health department, said establishing wholly Taiwan-invested hospitals could help avoid the disputes that sometimes occur in joint ventures concerning investment in equipment and management.
He pledged to offer Taiwan investors preferential policies on issues such as land for construction, tax and insurance.
Source: China Daily

Taiwanese hospitals and doctors welcome to set up in Fujian

Fujian province should encourage investors from Taiwan to set up wholly owned hospitals as part of an effort to promote cross-Straits cooperation in the health sector, according to a proposal.
In the proposal to the ongoing annual session of the Fujian legislature, the Fujian committee of the Taiwan Democratic Self-Government League, one of the eight non-Communist parties on the mainland, said the province should open wider in terms of cross-Straits medical cooperation.
According to the proposal, growing demand for high-end medical services shows the huge potential of the mainland's medical services market.
Taiwan investors are allowed to set up wholly owned hospitals in Shanghai as well as Fujian, Jiangsu, Guangdong and Hainan provinces.
But most Taiwan-funded medical establishments on the mainland are joint ventures. Issues such as investment in hospital's apparatus and management are likely to cause disputes between the mainland and Taiwan investors, the proposal said.
"In that case, the establishment of wholly owned hospitals can avoid the problem," said Luo Shaming, vice-chairman of the party's Fujian committee. Luo suggested Fujian's Xiamen city and the Pingtan experimental development zone should serve as the pioneer to host wholly Taiwan-invested hospitals.
Shanghai Landseed International Hospital, the only totally Taiwan-invested hospital on the mainland, opened for business in Shanghai on June 26.
According to the Ministry of Health, by the end of 2011, 22 Taiwan-funded hospitals, all joint ventures, had started operation on the mainland.
Fujian's first hospital created from joint mainland and Taiwan investments, Xiamen Chang Gung Hospital, was established in 2008.
Fujian Governor Su Shulin said recently that deepening cross-Straits ties, an effort including strengthening medical cooperation, will remain high on the government's agenda over the next five years.
Chen Qiuli, deputy director of Fujian's health department, pledged this month to offer Taiwan investors preferential policies on things such as land for construction, tax and insurance.
Chen also said the department will simplify procedures and policies on Taiwan doctors' applying for a practicing certificate.
Source: China Daily

Xiamen medical insurance scheme cuts bills by 75%

Leaders of Xiamen in East China's Fujian province have increasingly focused on public welfare in recent years in an effort to translate the city's economic achievements into a better life for residents.
It sits atop the list of China's top 10 service-oriented governments jointly compiled by Nanyang Technological University and Shanghai Jiaotong University in late November.
Since Xiamen implemented a new health insurance system in 2009, rural residents have gained access to the same health insurance coverage as their urban counterparts.
With each resident paying 100 yuan per year, and the government providing an annual subsidy of 360 yuan per capita, the insurance reduces medical bills by up to 75 percent, protecting residents, especially the disadvantaged, from becoming mired in poverty because of medical costs, according to a health official.
In addition, the government is working hard to make it easier for residents to seek medical care.
The government has made heavy investments to increase the number of medical facilities to ensure that each district has at least one 3A hospital - China's highest medical ranking - and that there is a basic medical facility for every 10,000 to 20,000 residents.
In addition, appointments at all hospitals in Xiamen can be made in advance, so those who plan to see their doctors do not have to wait on the spot for their turns.
Also, the city's medical facilities accept each other's physical checkup results, saving patients the time and money required in most Chinese cities for repeated checkups.
Source: China Daily