Informal Payments and Regulations in China's Healthcare System: Red Packets and Institutional Reform

288 Pages·2017·2.48 MB·English

by  Jingqing Yang (auth.)

Informal Payments and Regulations
in China's Healthcare System
Red Packets and Institutional Reform
Jingqing Yang
’
Informal Payments and Regulations in China s
Healthcare System
JingqingYang
Informal Payments and
’
Regulations in China s
Healthcare System
Red Packets and Institutional Reform
JingqingYang
SchoolofInternationalStudies
UniversityofTechnologySydney
Sydney,NSW
Australia
ISBN978-981-10-2109-1 ISBN978-981-10-2110-7 (eBook)
DOI10.1007/978-981-10-2110-7
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ToSuzhen,BochanandBozhi
C
ONTENTS
1 Introduction 1
2 SocialistMedicineandTheoriesofInformalPayments 29
3 InstitutionalChangesandthePowerofChineseMedical
Professionals 67
4 HealthReformandtheRiseofInformalPayments
After1978 133
5 TransactionsofRedPacketsintheHospital 187
6 ReininRedPackets 239
7 Conclusion 275
Index 281
vii
L F
IST OF IGURES
Fig.5.1 Paymentandresponsibilitystructureinbureaucraticmedicine 233
Fig.5.2 Paymentandresponsibilitystructureinaredpackettransaction 233
ix
L T
IST OF ABLES
Table3.1 Numberofprofessionalstaffofthewholecountry 107
Table3.2 Numberofhealthorganizationsandbedsofthewholecountry 107
Table3.3 Healthcareoperationalbudgetinthepre-reformera 108
Table3.4 Healthcarecapitalconstructioninvestmentinthepre-reformera 108
xi
CHAPTER 1
Introduction
IfthereformofanysectorthathaseverbeenclaimedafailurebyaChinese
central government agency, it was the healthcare sector. In 2005, Ge
Yanfeng,DeputyHeadoftheResearchDepartmentofSocialDevelopment
oftheDevelopmentResearchCenteroftheStateCouncil,announcedthat
“the healthcare reform was basically unsuccessful” (Wang 2005b). His
announcement was first published in Chinese Youth, a leading national
newspaper controlled by the Chinese Youth League Central Committee.
Lateron,hepublishedajointlyauthoredbookelaboratingtheproblemshis
teamdetectedinthehealthreform.Inthebook,heandhisteamblamedthe
failure on excessive marketization, which led to increasing inequality, low
efficiency, and proliferation of “unhealthy practices” in the healthcare sys-
tem(GeandGong2007).
The Ministry of Health (MOH) disagreed (Guo 2005). Gao Qiang,
Minister of Health, when addressing a training workshop for provincial
and municipal health department heads in November 2005, asserted that
it was pointless to argue whether the health reform was successful or
unsuccessful.1 His speech was widely interpreted as a formal denial of the
failureandprovokedpublicoutcries.CommentatorsaccusedtheMOHfor
being arrogant and disconnected with reality, and disrespecting public
opinions(Liu2005).
Even though the MOH did not agree with Ge Yanfeng on that it was
wrong to choose marketization as the policy direction for health reform,
senior health officials, including Gao Qiang himself, admitted that the
Chinese healthcare system was fraught with problems resulted from the
©TheAuthor(s)2017 1
J.Yang,InformalPaymentsandRegulationsinChina'sHealthcareSystem,
DOI10.1007/978-981-10-2110-7_1
2 J.YANG
healthcarereform.2Amongtheseproblems,amajorconcernoftheMinis-
try,thecentralgovernment,andthegeneralpublic,were“unhealthyprac-
tices” that prevail within healthcare organizations and among individual
healthcare professionals. Gao Qiang, in the Work Report addressed to the
2004 National Health Work Conference, admitted that the unhealthy
practicesare“jeopardizingthevestedinterestofthepeople, damagingthe
good image of the healthcare undertakings, impinging the flesh-blood
relationship between the [Chinese Communist] Party (CCP) and the
mass, and impeding health reform and development” (Gao 2004b). This
remark manifested the CCP’s concern that unhealthy practices in the
healthcare system could jeopardize its legitimacy of ruling. The unhealthy
practicesthatGaoQiangmentionedinhisreportincludeddrugkickbacks,
prescriptionforcommission,overcharge,over-provision,and“redpackets.”
The first four unhealthy practicesinvolve illegitimate transactions between
individual doctors and organizations, be it hospitals or third-party organi-
zationssuchaspharmaceuticalcompanies.Althoughinappropriateincomes
that doctors make from these activities ultimately come out of patients’
pockets,doctorsdonottakemoneydirectlyfrompatients.Usually,patients
payformallytoorganizations,which redistributethe paymentsformallyor
semi-formallyorinformallytodoctors.
This book focuses on the fifth practice—red packet, which is different
from the other four by nature. It represents doctors taking payments
directly, unofficially, and illegally from patients. If the other four practices
are organization-based misconducts, the red packet is an individual-
centered misconduct that not only is endemic in China, but also wreaks
havoconhealthcaresystemsworldwide.
INFORMAL PAYMENTS AROUND THE WORLD
Internationally,redpacketisusuallycalled“informalpayment,”butitisalso
known by other names, such as “under-the-table payment,” “envelope
payment,” “illegal payment,” “unofficial payment,” and soon. In general,
the practice is mostly found in former and current socialist countries.
Evidence indicates that informal payments already existed in the former
SovietUnion(FSU)andtheSovietblocintheCentralandEasternEurope
(CEE) and Central Asia (CA) before these countries commenced demo-
cratic and market transition in the early 1990s (Miller et al. 2000). The
collapse of socialism and the abandonment of the “Semashko” healthcare