China:160 hospital bosses nabbed in anti-graft drive

3 Min
China:160 hospital bosses nabbed in anti-graft drive

Chinese anti-corruption investigators have netted more than 160 hospital bosses this year, as Beijing targets the lucrative medical sector, which received public funding worth billions of US dollars under Covid-19.

Sources and observers expect more heads to roll in the sector, which has been one of the largest sources of public grievances over high costs and rampant corruption.

State media reports said more than 150 hospital bosses and secretaries have been identified in the targeted campaign that began earlier this year, but tallies by the South China Morning Post suggest the total may have reached 168 this week.

It was also reported last month that at least two senior pharmaceutical company executives – Winning Health Technology Group chairman Zhou Wei and Fan Zhihe, chairman of Shanghai Serum Bio-Technology – were under investigation for alleged corruption.

The sector-specific anti-corruption campaign kicked off just months after China emerged from its three-year zero-Covid strategy, but stepped up a gear as a July 30 deadline neared for people to hand themselves over in exchange for leniency.

Data released in March by the National Health Commission showed health facilities across the country have received more than 110 billion yuan (US$15.2 billion) since 2020. A source – who asked for anonymity because of the matter’s sensitivity – said the campaign to rid the sector of systemtic corruption will continue into 2024.

“The campaign will continue for another 10 months and the investigators will report to the leadership next June. New rules and regulations will be introduced based on the results of the investigation,” the source said.

“So, more heads of health commissions, hospitals and medical suppliers will roll in the coming months.”

The urgency of the anti-corruption campaign was reflected in a notice issued last month by the Guangdong Health Commission, which gave major hospitals and medical bodies in the southern province two days to review an audit report of their finances.

“You must provide feedback officially even if you have no objections,” the notice said.

A Guangdong health official, who asked not to be identified because he is not authorised to speak publicly, said authorities had promised leniency for hospital bosses and officials who surrendered before August.

Cross-agency collaboration in the campaign underlines the clear mandate from the country’s leadership for the anti-corruption drive.
On July 15, the finance ministry issued a joint notice with the National Medical Insurance Administration ordering spot checks of local medical funds and a “thorough investigation” of any violations.

About a week later, the National Health Commission announced a year-long “rectification campaign” for the medical sector in a video conference held jointly with the education and public security ministries, as well as the General Audit Office.

Further political momentum was injected into the campaign on July 28, when China’s top anti-corruption agency – the party’s Central Commission for Discipline Inspection (CCDI) – held a video conference calling on inspectors and supervisors to double their efforts.

The crackdown was “essential in promoting the healthy China strategy by Xi Jinping”, the watchdog said.

Nearly 300 billion yuan evaporated from the medical sector’s market value in the six trading days after the CCDI meeting, according to Wind, a financial data provider in China.

Deng Yuwen, a former deputy editor of the Central Party School’s official newspaper Study Times, said Xi has set his sights on the medical sector because it has been a major source of public grievances.

“Xi knows these are the things close to people’s hearts. He has tried to tackle skyrocketing property prices and inequalities brought by the tutoring sector in the past five years. He is now going to take on healthcare,” Deng said.

High medical costs are one of the three “major burdens” – alongside housing and education – imposed on the Chinese public. Complaints from patients about unaffordable medical costs, for even mild illnesses, are long-standing and widespread.

It has been an open secret that some pharmaceutical companies bribe hospital bosses and party secretaries for sales. Kickbacks are sometimes hard to investigate because they may be disguised as sponsorship or invitations to medical conferences.

Xie Maosong, a senior researcher at Tsinghua University’s National Institute of Strategic Studies, said that while the post-pandemic clean-up might have triggered the campaign, it was long overdue.
The campaign also showed that Xi was ready to move on in the drive to clean up the house, Xie said. The anti-corruption focus has been a feature of Xi’s presidency, with health the latest sector to come under the spotlight.

Health spending in China has outpaced income growth, with the rapidly ageing population having to spend more to manage chronic conditions. Hospitals are known to sell branded medicines at steep mark-ups to make up for shortfalls in public funding.

“China now faces some serious and chronic problems and consumption is weak because people worry about their mortgages, kids’ education and their medical bills,” Xie said. “So Beijing is trying to take on these problems one by one, hoping that their resolution will help put people’s minds at ease so they will become more willing to spend.”

—–by William Zheng in SCMP, Aug 12, 2023-