In China Lessons Come Loud and Big


One of the current lessons has to do with health care. From The Wall Street Journal (16/01, "In China, Preventive Medicine Pits Doctor Against System" by Andrew Browne) we have a shattering tale:

"Loudi, China – Dr. Hu Weimin has attracted a wide following amongst the poor in this city by providing free advice on how to avoid high blood pressure and dispensing cheap drugs to treat the condition, one of the biggest killers in that country. His efforts have won him national recognition, and he counsels thousands of patients through the Internet. But Dr. Hu’s public health message has turned him into an outcast at his hospital. The bottom line: Dr. Hu is bad for business at the Loudi General Hospital. For making treatment widely affordable, his colleagues shun him, and administrators bar him from the wards. Dr. Hu says he has cost the hospital a small fortune in lost profits.

"Like hospitals all over China, Loudi Central earns the bulk of its income from sale of drugs and high-tech testing. Doctors who pull in the most revenue earn the biggest bonuses. That gives them an incentive to pad the bills. Academic studies show that 50% of all Chinese health-care spending is for drugs. In the US the figure stands at about 10%. ‘Every prescription is a money-making opportunity,’ says Dr. Hu.

"Dr. Hu’s experiences show what makes it difficult to fix the broken-down health system. President Hu Jintao has made medical reform a priority. But incentives within China’s pay-as-you-go system leads some hospitals to fight desperately needed changes. Dr. Hu, a rare whistle-blower, has been lauded in the state-owned national media for preaching basic preventive medicine, but Dr. Hu has been treated as a dissident in his hometown, beaten up by one of his bosses, and banished from the wards.

"China’s socialist government once nursed the health of almost everybody. Then in the early 1980s it launched a privatization program. Private spending accounted for almost 64% of all health-care spending in China in 2004, compared with 55% in the US and 14% in Britain. Moreover, in China, almost all private spending is out-of-pocket. Private insurance coverage is negligible.

"Exorbitant health charges are putting health care beyond the reach of millions of people in a country where two-thirds of the 1.3 billion population has no health insurance and must pay cash up-front for treatment. If the patients can’t come up with the money beforehand, there is simply no treatment. As simple as that.

"A Chinese health ministry study showed that 43% of hospitalized patients in 2003 discharged themselves against medical advice, two-thirds of them because they had run out of money.

"Just this week the chief spokesman of the health ministry was quoted by Xinhua calling for a hospital system that stresses public service instead of commercial profit. ‘Hospital reform is the biggest problem we face,’ he said. He won’t comment directly on Dr. Hu’s case, but expresses general sympathy with him.

"The system’s failure has occurred just when strokes and heart attacks, cancer and vascular diseases have replaced contagious diseases and the leading causes of death in China. That is because of more sedentary habits and growing numbers of smokers, both linked to an increasingly urbanized and Westernized life-style.

"Resentment over health care is increasing. In November, some 2,000 people mobbed a hospital in south-west China after a boy died there. The boy died after he was rushed in by his grandfather after swallowing pesticides, according to the Hong Kong-based Information Center for Human Rights and Democracy. Doctors sent the old man away to fetch more cash, according to the report, but by the time he returned the boy – 3 or 4 years old – was dead. There are conflicting versions of the treatment the child received, but the protesters smashed hospital windows and equipment, and at least 10 people were injured.

"Dr. Hu is driven by personal tragedy. For several decades his father lived as an invalid following a heart attack. The hospital wouldn’t free up a room for his venture, but grudgingly agreed to let him use a dank space outside the coal shed. There he set up a desk and hung a white sheet to hide the piles of dirty coal he’d shovelled to one side. His health messages to the crowds that thronged there were simple and cost-free – stop smoking, exercise more, avoid greasy foods, go easy on the salt.

"As more people picked up tips, Dr. Hu says attitudes in the hospital turned frosty as fellow physicians noticed their own patient numbers falling, and revenues decreased. Government data show that Hunan province is a hot-spot for hypertension, brought on by the region’s spicy cuisine laden with salt and pork fat.

"Hospital officials declined repeated requests to respond to Dr. Hu’s allegations.

"A bonus system for doctors is widespread in China, as documented in a study by researchers at China’s Shandong Medical University and the Harvard School of Public Health. Dr. Hu describes how financial incentives work in Loudi Central, a sparkling new facility.

"Doctors who prescribe a CAT scan collect a personal bonus of 20 yuan ($2.50), he says. Inducements grow quickly with the sophistication of the treatment. The bonus for laser surgery is in US equivalent $63. For a heart pace-maker the reward is as much as $2,500. In addition, he says, the hospital pays departments collective bonuses based on the value of the drugs that doctors prescribe.

"The extra cash makes a huge difference to a hospital doctor in a provincial city like Loudi, who typically earn less than $200 a month in salary.

"Few countries let doctors profit so directly from their patients. China’s system virtually forces the profit-making incentive upon hospitals that are still mostly owned by the government – yet are largely self-funded."

Doctors Depend on Prescription Profits to Eke Out Livelihood

"In an effort to make treatment affordable, health authorities set low wages for doctors and impose caps on hospital charges for basic care and common drugs, which are delivered below cost. To make up for this hospitals and clinics are permitted to charge a 15% to 20% markup on new drugs, advanced tests and technologies. An unintended consequence: hospitals have turned into giant pharmacies. Some 60% of their revenue comes from drug sales, according to official data.

"Doctors massively over-prescribe drugs to increase their salaries. One survey cited in a World Bank study last year showed that less than 1% of drug prescriptions at village clinics in poor areas of China were considered ‘reasonable’ by doctors who reviewed the records.

"Dr. Hu’s battles with his hospital have upended the personal life of the gentle-mannered 43-old, who relaxes playing the violin and practising tai chi. Matters came to a head when he got into an argument with the deputy director of internal medicine, Chen Binhua, in 1999. According to local court records, there was some pushing and shoving and then Dr. Chen lashed out with a kick that caught Dr. Hu in the groin. The blow was serious enough to put Dr. Hu in the hospital – and, he says it rendered him impotent. As a result, Dr. Hu says his wife abandoned him. Dr. Chen, who retired, could not be reached.

"In 2003, the hospital director tried to remove him from medical practice altogether, and push him into a new job in the hospital union. Dr. Hu refused to go, but he was barred from working as an internist in the hospital wards, meaning that he could only do outpatient work. Finally in 2004, he resigned and with nothing more to lose took his story to the national media. Investigations detailing his persecutions begun appearing in state-run newspapers.

"Dr. Hu withdrew his resignation after two weeks. He says what changed his mind was a petition signed by 3,000 of his patients denouncing the hospital and begging him to stay.

"On one of his recent Sunday morning rounds, he dropped in on Wu Lianhua, 77 years old, in her windowless basement. A frail grandmother with wispy white hair, who gulps oxygen from a rusty cylinder by her bed, Ms. Wu says she ran through $6,300 in three months in another hospital. That exhausted the life savings of the retired textile worker and her husband. Dr. Hu says he immediately took her off a cocktail of expensive imported drugs that he says were working one against the other. A Chinese-made generic drug for hypertension plus another for anxiety gave her a full night’s sleep for the first time in sic months. His monthly bill was $38.

"These days, Dr. Hu’s clinic has moved inside the hospital. The sign above his door proclaims ‘Prevention and Cure for Blood Vessels of Heart and Brain.’ It’s standing room only on weekday mornings. ‘The most expensive medicine is not always the best,’ he lectures the crowd. ‘Find a drug that works for you.’

"Dr. Hu’s relations with Loudi Central remains frosty. Even though he’s now part of a national project collecting data on hypertension, his hospital will not let him into the wards."


– from Economic Reform, February 2007