Monday, 31 March 2014

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.

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