Friday, 6 June 2014

Lack of unions in China’s healthcare system leads to corruption

by Michael Woodhead
One of the main aims of the current wave of health reforms in China is to curb corruption by de-linking doctors’ income from sales of drugs and the numbers of tests they order.
It is widely acknowledged by Chinese authorities that many of the problems in the current Chinese healthcare system stem from overservicing. Hospitals obtain about half their income from sales of drugs and also rely for income on the use of expensive and often unnecessary tests and procedures. Doctors in turn are given incentives in the form of bonuses and quotas to prescribe more drugs and more expensive drugs. The end result is waste, inappropriate treatment and high costs to the patient. The widespread and institutionalised bribery and corruption also means that the public mistrust doctors and the healthcare system - and they often turn to violence when they believe they have been cheated or not received adequate treatment.
One of the main reasons why doctors in China are so amenable to accepting commissions/bribes to prescribe drugs is their low income. The basic income of a Chinese doctor is less than that of a teacher or a civil servant. As I have previously reported, this encourages doctors to look to ‘grey channels’ for income – including the infamous red envelopes (bribes) and sales commissions. One of China’s leading physicians Professor Zhong Nanshan highlighted this problem earlier this year when he reported the huge discrepancies between official and actual incomes of doctors at his hospital in Guangzhou.
This week sees the publication of an interesting analysis of Chinese doctors’ incomes by Chinese healthcare analyst, Cao Xuebing.
He says that despite hospitals being opened up to the market, the ‘market has failed’ China’s doctors, who remain underpaid for their services. As a result, they turn to ‘informal’ income streams to make up for that. His paper also highlights the discrepancies - and resentments - between different branches of medicine within a hospital. Surgeons and cardiologists can earn much more than their counterparts in specialties such as paediatrics because they do a lot of procedural work and prescribe more expensive drugs, he notes. The poor income means that China’s doctors are demotivated and have no incentive to be efficient or productive. Income differentials also explain why China has huge shortages of doctors in the poorly paid specialities.
The study shows that most doctors in China are dissatisfied with their income, but unlike doctors in western countries, they have no way of acting on this. There are no medical unions to lobby for pay and conditions and doctors have no power in their relationships with hospital managers, who are backed by local governments. And unlike in other jurisdictions such as Taiwan and Hong Kong, doctors do not have the option of leaving the public system to work for better pay in private practice.
Cao Xuebing observes that if China is to have significant healthcare reform, it will need to tackle the central issue of doctors’ income. And to do that doctors need to have a meaningful voice in such discussions – regardless of whether you call it a union or not. At present the only group speaking on behalf of doctors in China is the China Medical Doctors Association (not to be confused with the official Chinese Medical Association). Currently the CMDA is a weak and unofficial -but tolerated - voice on medical issues such as violence against doctors. The CMDA has the potential to speak on behalf of doctors on remuneration as well as on other issues such as the level of control in doctors' training, education and the supply of the profession. These are the 'bread and butter’ work of medical ‘unions’ such as the AMA and BMA in western counties.
However, Cao Xuebing notes that the Party in China has always aggressively suppressed independent union activity, and exerts strong political control over the tame official unions. If doctors in China see no scope for improving their conditions through official unions they will continue to look to ‘unofficial’ ways of boosting their income. Or as the author puts it:
“If the market opens a window of informal payment that can lead to substantial pay rise, they may not have strong feeling to pursue an empowered professional body or union.”
And he concludes:
“It will … be interesting to follow the development of the CMDA in organising the biggest group of medical practitioners in the world. Professional organisations in China … are important for the party-state to incorporate the interests of key professionals. If regular socialisation can consolidate Chinese doctors with political representation, then these practitioners may be able to gain traction over hospital management issues through leveraging the social capital of their professional body.”

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