While public health insurance reaches nearly all of China's 1.4 billion people, its coverage is basic, leaving patients liable for about half of total healthcare spending, with the proportion rising further for serious or chronic diseases such as cancer and diabetes. Official data show up to 44 percent of families pushed into poverty were impoverished by illness.
China’s medical bills rise steeply, outpacing government insurance provision, patients and their families are increasingly turning to loans to pay for healthcare, adding to the country’s growing burden of consumer debt. The personal healthcare bill is likely to soar almost fourfold to 12.7 trillion yuan ($1.9 trillion) by 2025, according to Boston Consulting Group estimates.
“Typically, what happens in China is the whole family contributes when someone gets a severe disease like cancer,” Severin Schwan, chief executive of Roche Holding AG, the world’s biggest maker of cancer drugs, told Reuters. “When it comes to innovative medicines, the financial burden is just too much. Families can go broke.”
Bribery is the lubricant that helps keep China’s public hospitals running,and the health system would struggle to function without illegal payments to poorly paid doctors and administrators, say medical practitioners and industry experts. Doctors and other staff expect to be paid extra fees to perform operations and take kickbacks from pharmaceutical firms and medical-equipment suppliers.
The corruption stems largely from doctors’ low base salaries, which are set in line with a pay scale for government workers. Hospitals can pay bonuses but, given public hospitals are strapped for cash, compensation is usually low, say doctors and industry experts. Hospital administrators can set fees for in-patient care, nursing and laboratory tests. But the state fixes the cost of operations to make surgery affordable to ordinary Chinese. And it effectively caps the cost of many prescribed medicines by setting a suggested price. That leaves hospitals little room to top up wages. An industry executive who has worked in China’s medical sector for more than 15 years said bribery and corruption permeated every level of a public hospital.
A doctor fresh out of medical school in Beijing earns about 3,000 yuan ($490) a month including bonuses — roughly the same as a taxi driver. A doctor with 10 years experience makes around 10,000 yuan a month,according to Peter Chen,chief executive of privately run Oasis International Hospital in Beijing.
“Without the grey income, doctors would not have the incentive to practice,” said Yanzhong Huang, a senior fellow for global health at the Council on Foreign Relations in New York.
One Chinese doctor who used to hold a senior position at a prominent hospital in Beijing said 80 percent of his income came from bribes. Without it, he would have earned less than $600 a month, said the doctor. Low salaries have also spawned a system of under-the-table payments from patients. The payments are known as “hongbao” — a reference to the cash-filled red envelopes given as presents during Lunar New Year festivities — and cover various services from jumping the queue for appointments to extra surgical fees.
A former doctor at a major heart hospital in Beijing said eradicating corruption would be nearly impossible. “It would be easy to find out who was taking money if the government wanted to,” said the cardiologist, who has been working in the United States since 2009. “But everyone would be found guilty. How could the hospitals survive?”
Over the past 30 years, the Chinese government has made its healthcare sector more market-oriented. That means the country’s 13,500 public hospitals have to balance their own books. Medical services accounted for just over 50 percent of public hospital revenue in 2011,according to Health Ministry data. About 40 percent came from prescribing drugs while the rest was from other income as well as government subsidies,which have fallen steadily since the 1980s.