Tuesday, 30 June 2015

Starlet snubbed; swears at surgeon

by MICHAEL WOODHEAD
The Chinese public's dissatisfaction with the offhand and uncaring medical treatment they receive in state-owned hospital extends even to celebs. The China tabloids are today running the sensational gossip story of how singer and  Journey to the West star Han Xue (韩雪) lost her temper and screamed at a doctor who she was seeing at a Shanghai hospital for conjunctivitis.

The star has since apologised after her outburst hit the headlines, writing a piece on her Weibo blog about how the doctor treated her in a rude and offhand manner and refused to listen to her questions.

According to Han, she went to see a doctor at the Songjiang Branch Shanghai First People's Hospital after she developed a red eye from working underwater in a swimming pool as part of a film shoot. She got a ticket and waited in line like everyone else, only to be dismissed after just a cursory examination when she finally got a few minutes with a doctor.

Han Xue said the female doctor's attitude was indifferent and impatient, as she refused to even listen to her explanation of the eye problem. After a brief look at her eye the doctor wrote a prescription without saying anything to her.

When Han Xue remonstrated with the doctor, saying that she wanted a proper examination of what the problem was, the doctor merely replied that she didn't need to ask questions and could assess everything by sight. The doctor said she was busy and didn't not have time to waste. After being given a prescription and dismissed, Han Xue asked what the diagnosis was. The doctor simply said it was not a bacterial infection. When Han Xue complained about the lack of information and how the way she was treated was insensitive, the doctor said she was not a psychiatrist and didn't have time for niceties with a 'trivial' complaint like conjunctivitis. Han Xue retorted that her eye problem was not trivial to her, and that the doctor had a poor and unprofessional attitude.

The doctor said she didn't care, and this prompted Han Xue to 'lose it' and let out a stream of foul abuse at her. During the rant, the starlet asked the doctor whether she had been bullied as a child, and whether she had lost money on the Shanghai stockmarket crash. Shen finished with a shout that the doctor certainly did not deserve the title "Angel in a White Coat" (often applied in Chinese media to selfless medical staff).

On her blog, Han Xue apologised to the public for losing her temper and using bad language, but said she still stood by her judgement of the doctor as "uncaring and irresponsible" .

In the same week, Shanghai media have reported three separate physical attacks on hospital staff by irate patients and their families.

Sunday, 28 June 2015

Healthcare reform in China - The Five Reforms and why they will fail

by MICHAEL WOODHEAD

As part of its latest round of healthcare reforms the Chinese government has released  a handy guide to the five top things it is doing to overhaul the creaky hospital system. The snappily titled "Guiding Opinions on Pilot Comprehensive Reform of Urban Public Hospitals" is really just a wish list for what the government would like to  see happening in the public hospital system.

Bear in mind that in China a "Public Hospital" is not  a public hospital as we would understand it in Britain or Europe. It's not a government-funded hospital that provides universal care. No, it's a state owned enterprise that runs a user-pays health institution. No money, no treatment. It's true that most people have some kind of government-subsidised health insurance that may cover some of their medical bills, but here again the public hospitals have a monopoly on that income - until this year private hospitals were not eligible for medical insurance rebates.

Anyway, all that is changing with the new Five Reforms:

1. Management Reform

The government says hospitals must adopt a more independent and accountable management system - recruiting outside experts and taking on board evaluation and performance review systems. They must start to subject themselves to outside scrutiny from consumer and industry groups and  - here's the killer - be transparent with their data. In other words, reveal their costings (insurance companies will love this) and their activities. A big ask. Expect massive resistance.

2. Revenue Reform

Hospital must stop relying on profits from sales of drugs and medical devices for their revenue. At the moment hospitals get 40-60% of their revenue from markups on drugs, medical equipment etc, and only a small proportion from medical fees and government subsidies. The central government wants to reverse that, and is going to ban drug commissions. To make up the lost revenue the hospitals must increase medical fees. Patients won't like that. There have already been riots in pilot trial sites in Sichuan by kidney dialysis patients who saw their cost of treatment go up 200%. The local government backed down.

3. Performance Reform

Hospitals must ditch the current system that forces doctors to overservice in order to achieve their bonuses. They must ditch the contracts that link doctor's remuneration to prescribing and procedure numbers, and replace it with a performance system based on clinical outcomes, service and efficiency.

4. Gatekeeper Reform

The government wants a primary care gatekeeper system and says tertiary hospital must stop being the One Stop Shop/First Port of Call for all and sundry.  Medical insurance policies are to be changed to force patients to attend local community clinics for minor illness and then be referred to local hospitals before going to a major tertiary hospital. The  major city hospitals will be reserved for more advanced and complex care patients. They must stop offering outpatient care for minor illnesses. This will take some getting used to because at the moment all Chinese make a beeline for 'the best hospital' as soon as they have a cough or cold.

5. Private Interest Reform

State-owned hospitals must be opened up to outside private business interests - the so-called 'social capital'. Private companies must be allowed to take on major roles within hospitals, along with insurance companies, and other medical foundations. Most importantly, they must have access to health information data.

The long and short of this guidance is that the closed and tightly-controlled monopoly situation for state owned hospitals must be bust open. At the moment, state-owned hospitals are the empires for local government bureaucrat-business chiefs. They jealously guard their business and their revenue stream - which is patients and the drugs and treatment they receive.

In an interesting opinion article in Caixin this week, Tsinghua University health economist Li Jiangge says that previous efforts to reform the hospital have failed because they simply have too much power and have too much to lose. He cites the example of government programs to provide  affordable treatment for cataracts. Although the central government provided generous funding to set up cataract treatment programs, most local governments blocked these projects in their areas because they would lose the lucrative income from doing the operations in their own hospitals. In other words - hospitals will block anything they see as competition or which undermines their own services. Likewise with kidney dialysis: China has 3 million people with renal failure needing dialysis, but only 400,000 get dialysis. The remainder go untreated and have early death because public hospitals will not allow private operators to enter this area and compete with them.

As Li Jiangge says, private investors and public hospital managers are "strange bedfellows" with conflicting and competing interests, who cannot be expected to co-operate. The few attempts at encouraging private industry to go into partnership wit public hospitals have not been a great success, he says.

Li Jiangge says private hospitals will only flourish when they are independent of the public system and have access to the same advantages such as medical insurance rebates and access to health data. Furthermore, he says private hospital development has been held back by lots of regulations that make them subject to local government control - including many "not-for-profit" rules. He says private companies should be allowed to do what they do best - make profits and take them away. The role of government should be to focus on "public health" matters such as disease control, vaccination and basic health services, he argues.

Monday, 22 June 2015

If you think Dr Google is bad ... 'Dr Baidu' leaves woman 30,000 RMB out of pocket for botched operation

by MICHAEL WOODHEAD

[This is a long article explaining how Baidu paid search has contributed to the proliferation of a wide network of shonky clinics for 'sensitive' conditions such as STDs, Infertility and Gynaecology].

A Shanghai media outlet has exposed what it says is the all-too-common practice of dodgy hospitals paying large sums of money to get the top Baidu search rankings - and then overcharging patients for shonky treatments. The IT News cites the case of a woman called "Snow" who paid 30,000 yuan ($5000) for an operation to treat uterine fibroids at the Shanghai 85 Hospital after seeing it came top of the rankings when she Baidu'd her symptoms. However, after her condition worsened and the woman went to another public hospital, she found that she had been grossly overcharged for unnecessary and harmful treatments.

The article then reveals that  dubious private clinics and hospitals such as the 85 Hospital pay Baidu as much as 90,000 yuan ($15,000) a day to be listed as the top result for 'gynaecology hospital' on China's most popular search engine.

The article says its undercover reporter discovered that the 85 Hospital had set up 13 different Baidu accounts to pay for the top result ranking for various medical keywords. The information accompanying the search results claimed that the hospital was one of Shanghai's most prestigious institutions with a history of 66 years. In reality, however, the '85 Hospital' was just one floor of a PLA-run hospital that had been leased by the Putian Group of private clinics.

The trouble for the 43-year old Ms Snow started in 2014 when a routine work medical revealed she had uterine fibroids and an ovarian cyst.  When she searched on Baidu for these symptoms she saw the 85 Hospital had the top ranking and its gynaecology department was supported by many glowing testimonials.

When she consulted a doctor there, at a cost of several thousand yuan, she was told that the fibroids and cysts were worse than she had been told, and that she also had other pelvic problems. However, the doctor told her not to worry and reassured her that these could be cured with surgery. She went ahead with the surgery, being billed 17,000 yuan, of which she could only claim 3000 on her state medical insurance. (She was told beforehand that it would only incur 2000-3000 yuan out of pocket costs). Ms Snow was also called back for repeat follow up treatments to diminish inflammation, at a cost of 800 yuan per session. Her total outlay was 32,000 yuan.

Two months later, Ms Snow still had bad pelvic symptoms and went for a second opinion to the reputable Fudan University hospital gynaecology department. The doctor there told her she had premature menopause, and the condition was likely brought on by her recent operation. He was unable to judge on the appropriateness of her treatment because she had no medical records. However, when she mentioned the 85 Hospital he shook his head and said it sounded like a private  'contract clinic'.

When Ms Snow looked back on her experience at the 85 Hospital she began to suspect it was strange - as she had had to register in a separate office from the usual public patients - and all the offices and clinics were separated on the 4th floor. She had been accompanied by a nurse the whole time  to pay for treatment, and had been prevented from mixing with other patients. However, it was odd that she she had not been offered overnight recovery time at the hospital, which is usual practice for such a serious operation.

The doctor explained that gynaecology clinics were known as 'gold and silver' clinics to unscrupulous operators because women were embarrassed to talk about such complaints treatments and were easily persuaded to have unnecessary treatment.

When the IT Times followed up her case, it discovered that all the gynaecology keywords in Baidu automatically led to the "85 Hospital". It found that visitors to the 'public hospital' were asked about Baidu and then directed to the 4th floor where they were registered at a separate office from public patients. In the waiting room, the undercover reporter met other women who said they had been charged large amounts of money - typically 7000 yuan - for simple treatments that would usually only cost 2000 yuan in a public hospital. All of them had been directed to the clinic from Baidu and many had already spent several thousand dollars. They believed the clinic was reputable because of its high Baidu ranking and the testimonies there.

The undercover reporter was seen by a female Dr Huang, who had several professional certificates on the wall. After a cursory examination, Dr Huang referred the female journalist for an ultrasound, which shes aid showed major pelvic abnormalities. The treatment would involve surgery and the undercover 'patient' was advised to make a booking. However, when these scan results were taken to another hospital, the doctors said the scan was normal.

When the IT News reporter tried to make a complaint about the 85 Hospital at the city health department, she was told that the hospital was PLA controlled, and the department had no supervisory role over the hospital or the staff who worked there.

The reporter then investigated why the hospital came top of the Baidu listings, and found that the listings were all marked as 'promoted', meaning that they were effectively paid advertisements.  Strangely, there were many listings under different addresses but all led ultimately to the 85 Hospital website and 'information inquiry' hotline.

A 'WHOIS' search on the different web addresses showed that the registrant was a group know as the 411 doctor's group, which in turn was linked to the PLA 411 Hospital. An admin address was traced by a reporter to a backstreet cosmetic surgery clinic called the "Meilian Beauty Centre". These clinics were in turn linked to an investment group know as the Shanghai MingAi Group. Undercover enquiries about employment opportunities with this group were refered back to the parent company in Taizhou, Jiangsu.

According to the company records, the shareholders are Ling Fengyu and Sun Jinping. They were linked through another company, Shanghai Venus, with someone called Lin Chunguang. This in turn is listed as the same address as the Putian Medical Company boss. Further checking showed that all the former clinics and hospitals are listed as Putian subsidiaries.

This situation resembles the 2007 incident over a 'fake' Harmony Hospital. At that time a Shanghai Harmony Hospital was set up, which many assumed to be a branch of the renowned Beijing Harmony Public Hospital. However, it turned out to be a privately run venture recently set up by Putian's Lin Chunguang. The hospital was de-registered after it was found to have been providing overdiagnosis, overtreatment and overcharging of female patients at its Fertility Clinic. At that time Putian's Lin Chaungwang was spending hundreds of thousands of yuan on advertising for his clinics. All that has changed in the last eight years is that he is now channelling this advertising through online sources such as Baidu.

Investigations by IT News found that the 85 Hospital is paying about hundreds of thousands of yuan in fees to Baidu trough 13 different advertising accounts for the medical keywords related to gynaecology problems. For every click by a consumer on a keyword, the company must pay several hundred yuan (145-212RMB). In addition, the 85 Hospital has paid Baidu for a prestige 'verified' title  on listings, which costs an additional 5600 yuan per title.


When the reporter asked about this 'V' verification procedure with Baidu's Zhendao and Guojing Information agencies, she was told that PLA and Armed Police institution were not allowed to undergo such verification, but this could be worked around.

On the Baidu site the reporter scrolled through seven pages of search results for 85 Hospital without finding a single negative review. All were fulsome in praise for the 85 Hospital. However, from the 8th page onwards it was continual negative reviews of the hospital by users. This is an example of Baidu having its search results  customer weighted. Interestingly, the 'promoted' 85 Hospital has 3000 reviews saying that it is a '5 Star" institution, whereas the non-promoted Fudan University hospital has only 51 reviews.

Baidu says its star rating system is automated and resistant to human manipulation. However, one internet rating and review 'specialist' said fake reviews were offered for 1.1 yuan per review. Another internet services company contacted by the reporter said they had offered similar review 'paid review. services to other private clinics. They said they could offer website setup and hosting quite cheaply, but Baidu search result manipulation would cost a lot more. He said the price for setting up a  search manipulation service would be about 90,000 yuan a month for top health sites such as hospitals. His financial model was to start with a monthly spend of about 50,000 yuan, which would get a 1:1 return, increasing over a year to about80-90,000 yuan a month, with a return of 1:3.5 on investment for a hospital.

All this may be about to change after the now famous spat between Putian and Baidu over 'compensated search' advertising for Putian network clinics. Putian clinics said that they were halting all advertising in protest at being overcharged by Baidu, but the search engine said it was cleaning up its search results to eliminate unauthorised health clinic advertising. Nevertheless, when IT News tried entering search terms synonymous with Putian clinics such as  "men's illness" [STDs], "Fertility Clinic" and "Gynaecology Clinic" all the top results were still for private clinics of the Putian chain. It seems the advertising boycott proclaimed for 1 April has yet to start in reality.

In 2013 the party secretary for Putian city said the healthcare companies based in the city spent 1.3 billion  on internet advertising for their national chains of clinics and hospitals, which represented about half of Baidu's revenue. They also represented the biggest source of patients to the clinics. According to Baidu, its  revenue from online advertising and paid search was 3.2 billion yuan, of which healthcare was just one five main areas that contributed to 54% of revenue.  In 2014 Baidu CFO Li Xinzhe said he expected healthcare to be one of the top contributors to revenue. This year so far Baidu has increased its revenue by 34% on the previous year. Draw your own conclusions.

Tuesday, 16 June 2015

Self circumcision attempt goes horribly wrong for Zhejiang man

by MICHAEL WOODHEAD
After working as a urological surgeon for five years at Zhejiang's Yongkang No1 People's Hospital, Dr Hu Xiang thought he'd seen it all. But near midnight on the 11th of June, a delicate-looking young man waddled into the department clutching at his groin. When Dr Hu asked what was the matter, the man removed his hands to reveal his trousers were stained with blood. After getting him to lie down on the bed, the man revealed that he had circumcised himself at home, and his penis foreskin would not stop bleeding. 

"Have you had medical training?" asked Dr Hu. The young man shook his head and said he had heard that circumcision was a simple operation and thought he would do the it himself. He had looked up how to do it in books and on the internet and had made an attempt when the rest of his family were out of the house.

When Dr Hu inspected the man's penis, he observed that it had been unevenly cut and what remained of foreskin was 'mashed' and was bleeding from areas where small blood vessel had been severed. The man had also tried to stitch up the cut penis with eight stitches of white sewing cotton.

Dr Hu asked him what had happened. The man said he was 30 years old, married with a daughter, and did not like the appearance of his foreskin, and thought it 'too long'. He had therefore gathered some scissors and some sewing needles and cotton and attempted to circumcise himself. When the scissors proved too blunt, he had tried a razor blade instead and was able to cut the foreskin. The man then sewed eight or nine stitches in the wound. None of the cutting and sewing implements had been sterilised, he admitted. Dr Hu noted that the man had cut too much and had damaged some of the erectile tissue of the penis in his amateur attempts at self-surgery.

The doctors in the urology department took the man in for surgery, to try curb the bleeding and prevent further complications. They did this under local anaesthetic, but were amazed to find the man kept sitting up and giving them advice on how they should do the operation. "Don't make any creases here .. make that bit look a bit more beautiful ..." he told them.

Dr Hu told local reporters that he was experienced in performing circumcisions, and these usually took no more than 20 minutes without complications. However, the self-circumciser had needed about an hour of surgery, including restorative plastic surgery to avoid disfigurement. The man had also warned them haughtily not to tell anyone about what had happened and not to talk to other members of staff at the hospital.

To add insult to injury, the patient then 'did a runner' after being left in the hospital ward to recover overnight. The next morning he had left without leaving any contact details. Dr Hu said the usual cost of circumcision was about 500 yuan, but this man had left an unpaid medical bill of 1000 yuan. He advised the man that he would have to return for follow up of his operation. If not, he could face serious complications such as infections and disfigurement.

Dr Hu's advice was that all circumcisions should be done in a proper hospital environment. he said he sometime had seen men who had circumcisions done in unofficial 'backstreet' clinics that did not have sterile equipment - and this could lead to excessive bleeding and skin  infections. However, he said this case was the first time he had seen someone try perform a circumcision on themself.

Sunday, 14 June 2015

Mobile healthcare in China: all you need to know

by MICHAEL WOODHEAD
I've written a great deal about the bottlenecks in the Chinese healthcare system and the problems that stem from having a hospital-based initial consultation system as opposed to European-style general practitioner gatekeepers. While China is slowing moving towards community clinics (most notably in Shanghai) - it will be a while before there is any system that efficiently triages and treats the minor illnesses and also provides continuity for people with chronic disease. 
In the meantime, Chinese patients are struggling to access doctors hidden away in the fortresses that are State-Owned Enterprise hospitals. They face a lot of hassle to register for an appointment and then long waits to actually see a doctor in a rushed consultation. Nobody is happy with this situation.

Enter the Mobile Healthcare providers (Cellphone for the Yanks). The Big Three at the moment are Baidu, Chunyu (Spring Rain) and Tencent-DXY. Let's deal with them one at a time.

Baidu are making big moves into mobile healthcare. They are China's biggest internet search engine and major internet player, so they have a lot of clout. Baidu are playing to their strength and basically offering an online appointments service, based on their search engine results.
The recently launched Baidu Doctor app allows users to find the nearest available doctors and book an appointment. It also includes some menus that allow the user to work out which kind of doctor they need to see. There is also a rating system that allows users to leave feedback on the quality of their experience. Baidu are rolling this service out nationally, province by province, and have made some strategic partnerships with key hospitals to ensure that they are offering appointments with certified, named doctors. So far they have signed up 1000 doctors nationally - not many in a country that has 3 million - but they are working to ensure that the doctors they enrol are kosher.
As a search engine, Baidu have had a bad reputation for advertising dodgy healthcare services, hence the recent falling out with the Putian chain of private clinics - who some have said owe more to marketing than medicine. Baidu are now trying to build up a reputation for quality and reliability - as well as convenience, and they certainly have the resources to invest in building up a network of doctors. However, by offering what is essentially an online referral system they seem to me to be duplicating the role of the general practitioner gatekeeper. How Baidu will sit with the government's policy of building up primary care and discouraging people from heading straight to hospital remains to be seen.

The next big name in mobile health is Chunyu - Spring Rain. They are essentially an online consultation provider - with an app turning the mobile phone into a telehealth device to allow the patient to speak directly to a doctor.  
www.chunyuyisheng.com claim to have 45,000 doctors online, and say they can hook up a patient with a doctor for a phone consult in just three minutes. The doctor provides advice and medical information in conjunction with Chunyu's online searchable medical library. The service also offers an electronic health record, personalised advice and links to nearby medical providers and pharmacies.

This seemed to be a promising avenue until the health ministry outlawed online consultations earlier this year except for patients registered with authorised hospitals. I'm not sure how Chunyu are managing their way round this, but they now say that users must be registered to receive medical consultations. They have also announced that Chunyu will be setting up bricks and mortar clinics in addition to their 'virtual' ones.
I personally am not a great believer in online consults. They may be useful as a convenient substitute for a limited number of consultations where the interaction between doctor and patient can be verbal - but most illnesses need a healthcare provider to be there to assess the patient in person. It is often the subtle signs that are only visible in the flesh so to speak that are the most crucial. Not to mention things like continuity of care, need for tests and scans and physical examination. When online doctors can remove earwax, change dressings and do Pap smears I'll get the app. Until then, it's just a glorified advice line.

Last but not least in the Mobile Health wave of the future is the partnership between Tencent and the doctors' forum site DXY.com (Ding Xiang Yuan - which translates as Lilac Garden).
I have a lot of respect for DXY.com because their forums are docgor-driven and the site for good quality doctor-to-doctor discussions. They also provide Continuing Medical Education (CME) and healthcare news. There's nothing really like DXY in the west. There are the so-called 'Facebook for Doctor' sites such as Sermo and Doc2Doc but they haven't really taken off and become universal in the way DXY has in China. I should point out that DXY is focused on younger doctors, though it does have content sourced from the older 'master clincians'. The success of DXY really reflects the positive attitude towards technology and social media among young Chinese - but sadly I think it also reflects the 'silo' mentality of Chinese healthcare and culture, cut off from the outside world. DXY features a lot of content and discussion around translated medical research from the west - the big journals such as JAMA for example. However, Chinese doctors seem to feel more comfortable discussing medical practice and developments in their native language and behind the Great Wall of DXY rather than venturing out into the wider online world and conversing directly in English. The lack of access to social media sites such as Twitter and Facebook means that most young Chinese clinicians can't take part in the many vibrant medical exchanges now going on in the social media sphere - groups such as Free Open Access medical Education (FOAMed), for example.

Anyway, Tencent has recently partnered with DXY, presumably hoping to harness all that young medical know-how and try to extend the online physician-to-physician communication links to physician-to-patient links. At a recent medical tech meeting, Tencent's investment manager Mu Yifei explained their philosophy in mobile health. Rather than being a 'disrupter' he said Tencent recognised that doctors would still be a the centre of any new online health system, and the company aimed to provide a new, smoother pathway between patients and doctors, based on data and information. Ma said that it was early days in mobile healthcare development, but they hoped to harness the skills of doctor online using the tools that have already brought them so much success in areas such as microblogging (Weibo), instant messaging (QQ) and their taxi app Didi (just banned). It's worth remembering that Tencent is a $200 billion company so they're not short of resources to invest in the mobile medical market.
Ma said the main areas for reform in medicine are unreliable costs, information silos, inefficiency in getting to see a doctor and the lack of good networks  for users of the healthcare system. He gave an example of how mobile networks for restaurants now allow users to find a restaurant, peruse the menu, order online, make a reservation then pay and leave feedback. Can this apply to healthcare too?

At present the DXY partnership offers only limited advice online for patients. The founder of DXY, cancer immunologist Dr Li Tiantian, is sceptical of the 'flashy' medical advice apps that are now in fashion. He has said  the future lies in two-way communication between patient and doctor, not one-way 'advice' from the physician. His vision is for patients to be given more encouragement to self manage their illness and give feedback to the healthcare provider. In this, he sees the longer term role of DXY in collecting and using information from patients - rather like a market research company - instead of just pushing out information and services to patients.

This then, is my brief introduction to the mobile health players in China. It's a fast moving field, and like other areas of internet and social media in China, it is very much a local game, with western companies either excluded or late to the game. Having said that, China seems to be leading the way in mobile health - there is great enthusiasm for mobile solutions and the Chinese are avid early adopters. China also faces less of the red tape and regulatory barriers that exist in the west around matters such as patient privacy, confidentiality of data and the regulations around doctors' scope of practice when offering online consultations. The other big barrier to online health in the west is remuneration - doctors are highly paid and beholden to either medical insurers (the US) or national payers (NHS, Medicare) for their income. With huge pressure on their already mushrooming budgets healthcare payers are loathe to open up new channels in which doctors could claim income and further inflate costs.
In China, things are different. Doctors are poorly paid and at the mercy of their  State-Owned Enterprise hospital managers. The government is actively working to break these shackles and encouraging doctors to work independently in private practice. If China's doctors can see an income stream from mobile health, they may well jump in and meet the apparent huge demand for their services. The players in mobile health say that China's healthcare market will be worth trillions of yuan in 2020 - and much of that will be online.

Sunday, 7 June 2015

China's government take the biggest step towards private healthcare

by MICHAEL WOODHEAD

This month China's State Council has announced its biggest ever policy move towards developing a private healthcare system in China: it has made private hospitals eligible for reimbursement under the national health insurance coverage plans. In other words, private hospitals can now compete for China's equivalent of 'Medicare' rebates. Since most urban Chinese are covered by some kind of national health insurance policy, this is huge.

The State Council announced a raft of other measures that will make it easier for private hospitals to compete against the giant and powerful public hospitals. The government has announced tax breaks for private hospitals and abolished a lot of regulatory barriers such as rules on bed numbers. It has also said that nonprofit private medical institutions should get subsidies from the government.

These changes are a signal of a major change in China's government health reforms. Up till now, the government has made incremental changes to try foster the development of private hospitals (or "private capital invested medical institutions" as the cosmetic-Marxist state media still refer to them).

The government has tried to encourage doctors to work outside the public system by abolishing many of the restrictions on 'moonlighting'. It has eased the rules on foreign companies investing in private hospitals. It has abolished the pharmaceutical profit-skimming by public hospitals by stipulating a no-commission policy on drug sales.

However, none of this has been enough. The small reforms haven't worked because the powerful State-Owned Enterprise hospitals have been the elephant in the room of China's healthcare system. They control the income (from health insurance and out of pocket payments), they control the real estate, the equipment ($2 million for an MRI machine anyone?) and the workforce - and they also control the medical training. It's also not too obvious to state that the big public hospitals are run by the local government - who make the rules.

The central government has finally woken up to the fact that the only way to truly reform the healthcare system is to undermine it. The new deregulation steps will divert revenue from the public hospitals and give investors the belief that there is a genuine business case for private hospitals to succeed in a tough market.

Until now, the private hospital sector has been small, stymied and suspect. Official figures say that private hospitals account for about 10% of hospital beds - and patients, with most private hospitals being small specialist clinics of limited influence. The small private hospitals have never had the capital or networking to compete in purchasing power with the big government funded hospitals - and hence have a reputation for having limited equipment, staffing and resources. Many of the privately operated clinics have a reputation for offering aggressively marketed but suspect services (fertility and impotence clinics, cosmetic surgery etc) and for overcharging.

In the Chinese media, analysts are saying the new deregulation changes will awaken investor interest in the private hospital sector - with specific interest coming from pharmaceutical companies. One example is Shanghai's Fosun Pharmaceuticals, which has a subsidiary "Hospital Medical Investment Management" company that has just signed a "framework agreement" to set up private hospital services in Yulin City

It remains to be seen whether the changes will help the National Health and Family Planning Commission (NHFPC) and Chinese government achieve its aim of doubling the number of private hospital beds from 10% of total to 20% by 2020.

My top ten China healthcare stories for the week


1. Chinese people's cholesterol levels are going through the roof. The mean daily cholesterol intake in Chinese adults increased from 166 mg/day in 1991 to 266 mg/day in 2011, with eggs, pork, fish and shellfish most to blame - although cholesterol intake from chicken is also considerable.

2. The number of Chinese people diagnosed with schizophrenia has increased from 3 million in 1990 to 7.2 million in 2010, a 132% increase, say researchers from Beijing. They say the incerase is far ahead of population growth and is linked to increasing urbanisation.

3. Schistosomiasis has been resurging in certain areas of China where its transmission was previously well controlled or interrupted, possibly due to a more mobile population re-introducing the parasite, say Suzhou researchers.

4. Exposure to pesticides is casing serious health risks to China's rural dwellers, a study of 246 farmers from Guangdong, Jiangxi, and Hebei has found. Pesticide exposure was high and those exposed showed adverse effects on nerve function, blood cell levels and liver function.

Good news on infant mortality rates: in Zhejiang they have fallen more than 60% since 1997, from 7.85 to 2.81 per 1000 livebirths for neonates.

5. China's hospital rarely recommend TCM. While China has many hospitals dedicated to Chinese Traditional Medicine, the majority focus on western medicine, and few of them recommend TCM in their clinical guidelines. A review of more than 600 clinical practice guidelines found that only 12% recommended TCM therapy.

6. Don't eat those wild mushrooms: heavy metal pollution in wild edible mushrooms is a serious problem in the Yunnan Province, a new stud shows. Analysis of wild mushrooms found that they contained hazardous levels of arsenic and cadmium.

7. Heavy metal contamination is also a problem for rice supplies in some parts of China. A study of five areas of China found that about 20% of rice samples exceeded the maximum allowable cadmium levels, with some areas of Guizhou having 40% of rice with serious contamination.

8. Dengue fever is an emerging problem in China that demands attention, according to doctors from Viral Disease and Vaccine Translational Research Unit, Institut Pasteur of Shanghai. They say the disease has come from nowhere to epidemic proportions, with 1000 cases discovered each week in Guangdong since September 2014. They blame increased overseas travel by Chinese and returning travellers.

9. Another emerging infectious disease of concern is the tick-borne disease Babesiosis, which has been reported for the first time in two patients near the Burma border in Yunnan.

10. Tibetans have a high risk of cardiovascular disease, with a high rate of risk factors such as hypertension seen in the more prosperous, lamas and those living at lower altitudes.The findings suggest that without the immediate implementation of an efficient policy to control these risk factors, cardiovascular disease will eventually become a major disease burden among Tibetans, say researchers from Tibet and Tianjin.