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.

The medical side-effects of China's stockmarket crash

by MICHAEL WOODHEAD

Headaches, irritability, depression and most of all insomnia are the most common medical side effects of China's stockmarket crash, doctors say.

Mental health specialists at Guangzhou's prestigious Sun Yat Sen Hospital say they have seen a stream of unwell patients this week suffering from the mental effects of severe stress from the stockmarket collapse.

"Some people can not sleep at night, have difficulty falling asleep or wake up in the early hours three or four times a night.
Many people have overt physical symptoms such as palpitations, chest tightness, aches and pains, stupor and confusion," says psychiatrist Dr Wei Qinling.

Dr Wei says the worst affected people are those with a casino mentality towards the stockmarket and those with little mental resilience, who are most at risk of severe depression, mental confusion and possible suicide risk. Other common reactions are despair, alcohol abuse and loss of motivation. Some workers in the finance industry say there is nothing to work for anymore, and they have lost a reason to work. Others have lost their livelihoods altogether. Dr Wei says some have gone on extreme drunken binges to try wipe out the stress.

And in what some are calling "stocks syndrome", people suffers from sever stress from the sudden reversal from riches to destitution. This is a mix of severe anxiety, guilt, frustration and mental paralysis. Dr Wei says some people have symptoms that are so severe they may require hospital admission and antidepressant treatment.

However, at the Beijing Union Medical College Hospital Department of Psychological Medicine, Dr Li Jianzhong says some people are looking for a quick fix for symptoms such as insomnia. Some of the most difficult to treat are those who were most greedy when the market was good and became obsessed with the stockmarket. After making large gains they are now in denial and are unable to accept that they have made losses and cannot adjust to reality. Counselling may be needed, but it requires people to learn about "spiritual wealth" as well as financial wealth, he says.

Dr Li says there are two steps to treating "stock syndrome". Firstly, people must identify the cause of their symptoms and learn to manage the stressors through activities such as deep breathing and findings distractive activities such as walking or sport. Secondly, people must find an alternative to obsession with the stockmarket and focus on that.

In Shanghai, psychologist Dr Chen Gong says there has been an increase in patients with 'financial stress' but it would be an exaggeration to say his department has been overwhelmed. For him, two of the most serious consequences of mental stress from the stockmarket are cardiovascular and cerebrovascular disease. These may be triggered by severe stress, and people must learn to change their habits and behaviour to have a more balanced life, he suggests. Another problem with financial stress is its effect on the family,and relationships, he adds. He recommends that people talk openly with their family and focus more on family activities rather than being preoccupied with speculating on shares.

Dr Wei, however, warns that for some people the stockmarket has become a form of addiction, just like gambling. He warns family members to look out for signs of addiction and to recommend counselling and treatment for those who have become addicted to the stocks - and are at risk of withdrawal symptoms.

How much does the average Chinese doctor earn?

by Michael Woodhead
Much of the recent highly-publicised violence against doctors by patients has been triggered by resentment and mistrust of the medical profession, especially in relation to their earnings. 
In theory, doctors have only a modest salary, but everyone in China knows that many doctors make a lot of money through the so-called 'grey channels'. This week the People's Daily mounted an investigation to discover the true earnings of a typical doctor and the sources of their income.

After speaking to doctors off the record and also to other people working at senior levels in hospital management and in industry, it soon became clear that doctors have many additional and unofficial (but often legal) sources of income. The phrase "drug-dependent doctors" describes the reliance of doctors on prescribing for their income. Another well know rhyming phrase in hospitals is 'physicians rely on commissions, surgeons rely on operations' (it sounds better in Chinese - 'Neike kao huikou, waike kao shoushu').
A typical doctor at a large tertiary level hospital in Beijing will officially earn about 46,000 yuan (US$7500) a year. In reality, doctors earn more than three times that - about 180,000 yuan ($29,000) a year. The additional income comes from four areas:

1. Bonuses  - from hospital, for meeting patient number and performance quotas
2. Commissions for prescribing drugs and ordering tests
3. Red envelopes - from patients to get preferential treatment
4. Moonlighting - doing 'outside clinics' at weekends - often in regional cities and towns

One orthopaedic surgeon said that without the 10,000 yuan ($1600) monthly bonus from his hospital, most doctors in his department would leave. The basic monthly income of a doctor is only about 2-3000 yuan ($320-480), and no-one would work for that. The surgeon said all doctors depend on their monthly bonus for much of their income, and also the annual bonus, which can be several thousand yuan. The real income for a hospital specialist is about 180,000 yuan ($29,000) a year, and for a head of a department as much as 250-300,000 yuan ($40,000-48,000) a year. The income varies between departments and specialities. Some areas such as orthopaedics, surgery and cardiology are the highest paying. Others, such as paediatrics, have a lower income because doctors in these specialities prescribe fewer drugs and use fewer tests. A doctor in a  regional hospital would also earn less - maybe only 10,000 yuan ($1600) a month.

Doctors also get commissions from the sales of drugs. It is well known that hospitals rely on commissions on drug sales, which make up 50-60% of their income. Doctors also individually benefit from drug sales, says a drug company representative. Whether they agree or not, doctor's income is related to how many drugs they prescribe. Companies reckon that 10-30% of drug sales income goes to doctor.s for choosing them and prescribing them. Surgeons do not prescribe as many drugs but they make money from 'red envelopes' in prioritising patients. Surgeons along with anaesthetists and theatre nurses also make commissions on the use of disposable medical items and the use of medical devices and tests.

Another overlooked source of doctors' income is moonlighting. At weekends, Beijing Airport is said to be a social meeting place for the medical profession as doctors fly off to do their 'outside clinics' in other parts of the country. For the top specialists in any field this is a lucrative source of additional income and they can make tens of thousands of yuan from just a single session - and millions of yuan a year. However the junior and low level doctors make much less than the top specialists. A doctor at a community clinic, for example, would get only 4-5000 yuan ($640-800) as a basic salary and would not get much income from prescribing or surgical work.

These kinds of grey income are a contradiction in the health system and are the underlying reason for doctor-patient tensions - it is all to easy for misunderstandings to occur and to flare up into trouble - like 'a minor incident sparking a war' as the Chinese saying goes.

One of the fundamental underlying problems is that the doctor's time is undervalued. Take a knee replacement operation, for example. Such an operation will require two surgeons, two theatre nurses and two anaesthetist and last at least an hour - possibly three hours of their time. And yet the 'doctor's fee' for the operation is only a few hundred yuan - where is all the money to come for the doctor's expertise - let alone for the equipment, drugs, gas and blood and dressings?  There are doctors with a conscience who will add a reasonable and standard markup for their time - and yet there are other 'business minded' doctors who add a lot more. And there are some doctors who use foreign disposable equipment which might cost 200 yuan ($32) to buy, but is billed to the patient at several times that amount.

"There are some bold doctors who when it comes to prescribing always choose the most expensive, not the most appropriate drugs," says one pharmaceutical  supplier. "And when a new drug comes out they all rush for it in a show of excessive and unnecessary prescribing," he says. It is the same with tests - patients are told they must have numerous complex and expensive tests that they don't need, because the doctor gets a commission, he says.

The situation in hospitals also has a rhyming slogan: "Getting to see the a doctor is hard (kanbing nan): registering is hard (guahao nan),  waiting is long (houzhen chang), time with the doctor is brief (kanbing duan), doctor's fee is expensive (kanbing gui), tests are many (jiancha duo), prescriptions are many (chufang duo) and drug costs high (yaofei duo). All in all it is a volcano waiting to explode - no wonder 70% of doctors have experienced violent disputes with patients.

It is hoped that the Chinese government's new health reforms - including those on drug pricing and supply arrangements, will help straighten out this situation. What is also needed to 'restore the honour of the doctor's white coat'? According to leading physician Dr Huang Jiefu, the answer is a turn to the free market. By giving doctors the freedom to practice where and as they wish - as set out in new government policy -  doctors will be able to set a true market value for their services. When they do this they will no longer need to rely on unethical and unfair 'grey market' channels to maintain their income.  The People's Daily ends by saying that new health insurance schemes should allow patients to afford private doctors by encouraging the public to pay in premiums and have a policy that they can use when they need it most.

All health departments to undergo financial audits

The National Health and Family Planning Commission (NHFPC) has announced that all health departments will undergo more stringent financial audits to promote a healthy organisational climate. The NHFPC said the audits will look at financial management and also at areas such as personnel in health departments and their subsidiary agencies. The NHFPC warned that any departments that resisted or obstructed auditors, covered up or provided false or misleading information would be severely punished.