Chinese Medical Anti-Corruption Blitz


Anti-corruption efforts have focused on hospitals, pharmaceutical companies, and medical insurance funds in an anti-corruption blitz that targets hospitals, pharmaceutical companies and medical insurance funds alike. Particular emphasis has been given to bribe-givers as well as recipients. Often the Amazing fact about Chinese medical anti-corruption.

Critics worry it could stigmatize doctors in an industry already beset with violence and threats from patients’ families and have severe ramifications for medical innovation such as immunotherapy.

1. Doctors’ Income and Benefits

With economic activity slowing across China, China’s government’s new anti-corruption campaign is targeting healthcare as part of a nationwide crackdown. The campaign seeks to expose dubious links among hospital managers, doctors, and medical representatives. Investigations against over 155 hospital directors or party secretaries have already resulted in investigations, while its crackdown has resulted in 200 billion yuan being stripped off A-share healthcare stocks, according to RFA Mandarin service.

The national authorities’ multi-agency effort will focus on an array of issues, such as illegal commissions earned by doctors for prescribing medicines or ordering physical examinations and tests; illegal transfers between pharmaceutical companies and hospitals; overcharging for treatment to consumers and mismanaging of medical funds; as well as healthcare professionals or hospitals who receive bribes from suppliers of pharmaceutical and medical device products in exchange for procuring, selling or using them.

As opposed to previous corruption campaigns, this one focuses not just on individual bribe-givers and takers but rather on institutions as an entity. Prosecutors are targeting “key leaders and key positions” within the healthcare and pharmaceutical sectors in China to create a deterrent effect. Experts warn that adopting such an approach could have detrimental ramifications on innovative medical treatments such as immunotherapy, which has become a focal point for research activity in China; academic conferences that foster medical progress may be adversely affected as a result of this campaign.

2. Hospitals’ Management

As China’s anti-graft authorities target hospitals, directors, and party secretaries with increased scrutiny by anti-corruption investigators, the perception of medical workers has undergone an abrupt transformation. No longer regarded as “white angels” and “heroes in harm’s way,” medical personnel now find themselves scrutinized by anti-corruption investigators.

Over the last year alone, more than 155 hospital CEOs have been investigated – nearly twice what had previously been studied – with this trend expected to accelerate by 2023. This trend comes amid growing public dissatisfaction over healthcare costs and treatment quality.

The investigation being undertaken by the Communist Party’s top anti-corruption body, the Central Commission for Discipline Inspection (CCDI), and its National Supervisory Commission is being widely described as unprecedented in scale and scope. They aim to unearth any possible links between hospital management and pharmaceutical suppliers to prevent money from leaving the government into private hands.

Pharmaceutical industries are notoriously fraught with corruption. A study of 3,546 public medical corruption cases revealed bribery was present in over two-thirds of them, with some reaching as high as 10 million yuan ($1.6 million). Due to this practice, more funds have gone toward marketing than research and development, leading many Chinese pharmaceutical firms not only to fail to innovate but actually fall behind.

3. Patients’ Rights

Costs associated with healthcare treatments in China’s burgeoning healthcare system can be an immense strain for ordinary citizens, leading them to take to the streets earlier this year in protest over changes to their coverage and aging populations.

The government aims to address these concerns by targeting corruption among hospital administrators, doctors, and medical representatives. A recent analysis of 3,546 public medical corruption cases revealed bribery was present in over two-thirds of them; researchers analyzed payments made between pharmaceutical companies and procuring officials of medical institutions that ultimately lead to increased drug prices that are passed onto patients.

Local governments have also increased enforcement. Shanghai’s municipal government, for example, introduced “integrity accounts” so medical professionals can turn in illegal gains and be absolved of past mistakes. Beijing City offers generous rewards to anyone reporting illicit activities.

Under the direction of the Central Commission for Discipline Inspection (CCDI), this summer saw a one-year nationwide concentrated rectification campaign launched. This effort covers every value chain within healthcare production, sales, use, and reimbursement – as well as pharmaceutical and medical device industries – with the objective of eliminating key corruption issues while making significant strides toward combatting commercial bribery in the industry.

4. Health Insurance

China’s anti-graft fighters are targeting corruption in China’s vast healthcare industry, such as pharmaceuticals and insurance funds. Over 180 hospital leaders, including Communist Party secretaries, have been placed under investigation, according to state media reports — more than double what was reported last year. This nationwide probe will reportedly last for at least one year but may go back 20 years.

Wu Zuolai, a Chinese political commentator and independent scholar who was fired from his magazine editing job after signing Charter 08 initiated by Nobel Peace Prize laureate Liu Xiaobo, who died in prison in 2022, believes this campaign can make Chinese healthcare more affordable, pave the way for reform in payment methods and doctors’ compensation, and address longstanding public dissatisfaction over rising healthcare charges – an economic concern for many families (Credit China, July 23rd).

The latest anti-corruption effort differs from previous efforts in that it includes both CCDI and NSC – expanding law enforcement capacity beyond key health ministry departments such as the National Health Commission – as well as targeting medical institutions and funds’ leadership and critical positions to rectification, targeting both bribe-givers and recipients alike. It follows an anti-corruption model implemented successfully in Sanming, where law enforcement targeted local officials and business leaders who had misused public assets.

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