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Why some doctors are taking a pay cut amid China's crackdown on medical corruption to stop 'red enve

By Kelly Wu and Nicholas Ning

Posted Wed 13 Sep 2023 at 3:29pmWednesday 13 Sep 2023 at 3:29pm, updated Wed 13 Sep 2023 at 10:57pm



Joe Yang is a 35-year-old doctor in one of China's public hospitals.

He earns about 15,000 RMB ($3,200) a month and that figure would be even lower if it didn't include commissions he receives from drugs salespeople for selling their medications to his patients. Over the course of a year, commissions average out at around 5,000 RMB ($1,083) a month, roughly a third of his total income.

But Dr Yang's earning capacity is coming under threat because of an anti-corruption campaign targeting public hospitals, which is described by Chinese state media as the largest sweep in the industry's history. According to China News Services, more than 184 hospital directors across the country are under investigation, double the number from last year.

Doctors and hospital directors have been asked to hand over their "illegal income" to authorities, while the Shanghai government is offering substantial rewards for those who report bribery, according to Xinhua News Agency.


The campaign targeting medical corruption will last a year. (Reuters: Tingshu Wang)Dr Yang, who has been working in a public hospital in China's south-west city of Guiyang, said the measures were "a little extreme" and they made him and other young doctors feel "disheartened".

He said taking a fee from drugs salespeople was "the default custom in the industry" as the basic salary for doctors was "very small" in China.

"Now, the campaign is investigating everyone from top to bottom, even the junior doctors without any power who just want to do good work," Dr Yang said. "It seems to have soured."

Dr Yang said he feared what might happen to his income and was considering other ways of earning money.

"I'm actually a very frugal person myself [but] when I earn less, it will certainly have an impact on the quality of my life or the way I spend money," he said.

"If it really affects my life, I may start a side business or some other means of earning a living … in my spare time."

Dr Yang said he wasn't against major changes to the industry but they needed to be fair. "I still hope to see a series of policy reforms that can improve our legitimate income … I think taking 'grey income' is not a permanent solution, it is illegal," he said.

"But why do medical staff need that? It is because your general income is too low."

'Zero-tolerance' attitude towards corruption


With a lack of GPs in the community, public hospitals provide the majority of routine medical care.(Reuters) Despite China's efforts to build a primary care system with more general practitioners, government data shows there are only three GPs for every 10,000 people.

It means public hospitals continue to be the primary destination for patients receiving treatment for illness and injuries.

Chinese authorities, including the Communist Party's corruption watchdog — the Central Commission for Discipline Inspection (CCDI) — say corruption in this field poses a threat to "people's lives and health".

They say it also "directly affects the image of the party and the government".

The campaign is set to last for a year, during which corruption will be "firmly punished" with a "zero-tolerance" attitude.

Observers say becoming a doctor would likely become a less attractive option for young Chinese if these additional revenue streams are cut off.


Professor Bingqin Li predicts the income of Chinese doctors will drop.(Supplied: Bingqin Li)


Li Binqing, a professor at the Social Policy Research Centre at the University of New South Wales (UNSW), said the campaign would have a major impact on earnings.

"A doctor's income consists of fixed components like basic salary, performance pay, and allowance. The anti-corruption campaign primarily targets the unfixed components that may bring in money," Professor Li said.

Unfixed components often include "grey income", like payments from drugs or medical equipment companies.

"If the unfixed components make up a large proportion of the doctor's income, then this would mean the decrease in the doctor's income would be very clear to see."

A culture of bribery and underpayment


The COVID-19 pandemic and hard lockdowns were especially tough for China's doctors.(cnsphoto via Reuters, File)In addition to payments from drug companies, some are also accused of soliciting bribes from patients, sometimes to fast-track treatment in the world's most populous country.

A peer-reviewed journal article published in 2018 showed that one-third of 500 randomly sampled residents in China said they or their family members had given "red envelopes", or bribes, to doctors. When surgeries were involved, that increased to 50 per cent.

The hidden agenda of China's widespread bribery culture Despite Xi Jinping's sweeping anti-corruption campaign, patients continue to slip doctors thousands of dollars in red envelopes. Read moreResearchers attribute the bribery to a lack of trust between patients and the medical staff, with patients believing they will receive better medical treatment by offering money.

They argue that the way that doctors get paid should be made more transparent to increase trust between them and their patients.

In China, young doctors in public hospital typically work long hours under significant pressure with underwhelming pay.

According to a Reuters report, new doctors' monthly salary can be as low as 3,000 RMB ($647) in small cities and 10,000 RMB ($2,157) in big cities like Shanghai, which is considered inadequate for a comfortable life.

Meanwhile, research from 2017 showed that more than 75 per cent of doctors in China worked more than 40 hours a week, dealing with an average of 40 patients a day.

The future of China's healthcare sector


Professor Xia says the crackdown will have a major effect on the medical sector.(Supplied: Ming Xia)


Professor Ming Xia, a politics expert at the City University of New York, said the anti-corruption campaign would have a drastic impact on the industry, with support staff potentially encouraged to point fingers and whistle-blow at doctors who step out of line.

"Health workers, medical providers negatively impacted by a year-long crackdown-style campaign could number in the hundreds of thousands," he said.

Dr Xia said that the anti-corruption campaign would "inevitably" lead to a downturn in profits for those across China's healthcare industry, such as hospitals, drug makers and medical equipment manufacturers.

"In a climate of overlapping crises … the government has lost sight of these economic consequences," Dr Xia said.

Zhao Heng, founder of the consultancy business Latitude Health, said this crackdown was "more forceful" than anything he'd seen before.

"The crackdown on corruption would have an obvious impact on drug sales, at least in the short-term," he told Reuters, adding that pharmaceutical companies with distinctive or highly competitive products would be less vulnerable.

The ABC has contacted China's State Council for comment. Additional reporting by Joyce Cheng and Stevie Zhang ABC/Reuters

Posted 13 Sep 202313 Sep 2023, updated 13 Sep 2023

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