Caixin
Sep 30, 2014 12:17 PM

Can Doctors Cut the Public Hospital Cord?

(Beijing) – Dr. Zhang Qiang is living a dream that's shared by most of his fellow doctors in China: He has the freedom to practice his craft – vascular surgery – in more than one hospital.

Unlike the vast majority of doctors nationwide, Zhang can work as a private practitioner while cooperating with as many hospitals as will agree to use his services. It's an arrangement that stands in sharp contrast to the rigidly regulated, government-controlled public hospital system through which most of China's over 2 million doctors toil.

Zhang appreciates his freedom and wants to help his professional colleagues fulfill their dreams as well. He's also in the same camp as many health care academics in China who want the government to do more to marketize the medical system. Many see Zhang's personal success and subsequent push for labor mobility as a major victory for nationwide health reform, but not the end of the battle.

Reform advocates argue that current distortions in pricing for health care services and difficult access to high-quality medical treatment could be resolved if doctors were allowed to practice at more than one facility.

The government launched a reform initiative in 2009 that adjusted some rules to let doctors seek permission to practice medicine in more than one location. But the change did not fully open the door.

Today, most doctors are still required to function as communist system "danwei," or work unit, employees. A danwei offers "iron rice bowl" job security and benefits, but also keeps a doctor tied to one workplace. The system also links credentialing with a health practitioner's legal place of employment, usually the danwei.

Under one reform proposal, doctors would be allowed to change jobs by, for example, choosing to work for a private hospital or clinic. But under this plan, they would lose the benefits available through the public system, including guaranteed employment until retirement.

Zhang had an iron rice bowl arrangement until late 2012, when he resigned from a high-profile post as director of the Shanghai East Medical Center's vascular surgery department. He gave up a 400,000 yuan annual salary – and announced his decision to the public on his Weibo microblog account – not only for more freedom but also as way to help rewrite the rules.

Apparently, a lot of people in the medical community agree with the charismatic Zhang: He boasts about 260,000 fans on China's version of Twitter. And he's attracted big-name medical professionals to his Shanghai-based doctor group.

Accelerating Reform

These days many doctors choose to hold their rice-bowl jobs while also working on the side – and under the radar – for private clinics, hospitals and themselves. They're often working in a legal gray area because, although they're not technically breaking the law, they are going beyond restrictions imposed by each danwei.

Government officials have looked at closing these legal loopholes. To that end, the National Health and Family Planning Commission (NHFPC), which oversees doctors and hospitals, early this year started soliciting professional comments on several proposed policy changes affecting labor mobility for doctors.

Commission officials promised to complete the process by the end of September. But officials told Caixin in mid-September that deliberations were continuing.

Under Chinese law, a doctor can practice medicine only if he or she is registered with the medical institution where he or she legally works. In 2009, the government amended the rule to say that doctors could practice in more than one location "with permission from their current danwei and the relevant health administration department." The amendment added that doctors should "in principle limit their practice to one province, autonomous region or city," and that they should work in "no more than three locations."

NHFPC has recently shown interest in further reform. On January 26, for example, the commission posted on its website a document outlining a plan for letting doctors practice in "multiple locations." It also proposed ending the stipulation that a doctor who wants extra work must get "written permission" from the hospital where he or she is employed.

Moreover, the State Council this year outlined a medical reform plan that calls for "accelerating" rule adjustments so that doctors would be allowed to practice medicine in several locations.

According to the NHFPC, China has about 13,381 public hospitals and 11,584 private hospitals. By far most major hospitals – those with at least 200 beds – are public, according to the 2013 China Health Statistics Yearbook.

Some local governments are eager to see reforms proposals take root. On July 22, for example, the Beijing branch of the NHFPC issued a document laying the groundwork for relaxing restrictions. Officials proposed letting doctors make personal work decisions without permission from a danwei. Moreover, there would be no limits on the number of places where a doctor can practice or a hospital administrator is allowed to work.

Zhang now works for three medical organizations and wants to see his professional colleagues liberated from the system as well.

"I want to put outstanding experts together, organize them into teams and let them practice in multiple locations through contracts," Zhang said. "I want them to receive the same kind of treatment that doctors receive in the United States so that all they need to worry about is treating patients."

Zhang formed his doctors group with the sole objective of providing high-end medical services through partners in different locations. The group system would help make good doctors more accessible and all doctors more attentive, he said.

Doctors like the idea: Zhang says he's been flooded by requests for information from interested doctors. For now, he says, the group of 15 doctors has all the associates it needs. Before adding associate, he said, the group will have to build patient numbers.

"Through these medical workers we're experimenting with medical reform," he said. "They are a part of my experiment. If they're doing well by the end of the next half-year, maybe we can change people's thinking even more."

Team Building

Zhang's group, which launched in June, includes six teams of doctors. These include teams of surgical specialists for treating the vascular system, spinal problems and hernias. He is in the process of building teams to care for patients who need breast cancer treatment and prostate surgery.

A single group employs all necessary doctors, medical assistants, secretaries and other staff members. Zhang functions as the vascular surgical team's "lead expert," but holds a management position as well.

Once all of the groups are established and running well, Zhang said he plans to bow out from any tasks not directly related to medicine, and let a professional manager run the business.

Zhang reckons the group will initially operate something like a talent agency – similar to agencies that represent musicians, actors and other professionals – while financing medical supplies and equipment at hospitals and clinics.

Under Zhang's system, a hospital that agrees to work with his medical group becomes a site where group doctors can practice. The doctors, Zhang and the hospital sign three-way agreements that bar bribery and other shady practices.

Leading experts working on each specialist team take charge of overseeing treatment for patients, making sure they receive quality service.

Zhang said he is confident doctors can earn more through the group than at a public hospital. Through this system, a doctor's earnings will be determined by market demand, so that he or she need not seek bribes, gifts and other kinds of "gray income" to supplement the meager salaries common in China's health care system.

Still, some doctors appear to be willing to accept compensation cuts in exchange for the freedom that comes with working under Zhang's group.

After Zhang's group posted help wanted ads, many doctors who were interested in applying asked Zhang whether working for him implied leaving the public medical system. High-profile doctors "lose a lot by leaving the system," he said. "They immediately say goodbye to annual salaries in excess of 1 million yuan, as well as social security, pensions and other benefits provided by their danwei.

"They're doing pretty well in the old system. They don't have to pay taxes, and they have a big tree to lean on."

Flexibility and Freedom

Zhang's group is up and running even though the government has not given a clear green light to medical practice mobility. Indeed, several doctors who've joined his teams have yet to receive official permission to leave their danweis even though they've submitted resignations.

A city of Shenzhen proposal in July 2013 that would have given doctors permission to practice in several locations was issued by the local branch of NHFPC and spurred hopes that real change was imminent. But the plan was retracted two months later.

Zhang is not the only medical practitioner pushing to give doctors more independence. Song Donglei, president of the Shanghai Neuromedical Center, a hospital that specializes in neurological diseases, helped open a neurological treatment clinic in July at Ruici Hospital in Nantong, in the eastern province of Jiangsu.

Song said that although the government has yet to let doctors practice outside their jurisdiction, members of his team get around roadblocks by saying they provide "medical consultation" services. It's a technical loophole that works, according to one source.

Some doctors have found Zhang's group system impractical. Kunming hospital administrator freedom Li Yi, who works as executive director at the city's privately owned St. John's Hospital, left the public health system in 2009 and tried practicing in several locations. But authorities punished him for breaking the rules by stripping him of his teaching credentials.

In 2010, Li and 21 other medical professionals left the public hospital system to start Renqing Medical Technology Co., a doctor team specializing in cardiology. It operated at St. John's and three public hospitals.

Renqing later lost some of its best-known doctors after they opted to rejoin the public system. Later, Li also decided to work at a public hospital in southwestern Chongqing.

"Practicing at multiple locations is not necessarily suitable for everyone," Li said. "But certainly it is suitable for some."

In fact, Dr. Fu Yishan decided it suited his career. He said he joined Zhang's group July 9 after thinking carefully about whether to walk away from a 30,000 yuan-a-month salary and an iron rice bowl.

Fu said he was happy to leave the public system with its staff power struggles, a promotion system that glosses over a doctor's skills in treating patients and selling medicines to finance hospital operations. He also found the system impervious to change.

Fu added that doctor salaries are often too low to offset costs tied to disputes over patient treatment. Payouts can ruin a doctor's finances.

"Medical services are priced according to the public welfare system," he said, "but compensation payments are set at market prices."

Also leaving the system was Dr. Yu Yuan, sometimes called the "superwoman of emergency medicine." She left Beijing's prestigious Peking Union Medical College Hospital and the Amcare Women's and Children's Medical Health Center in 2013 to join a private hospital.

Yu said other doctors she knows have started making plans to follow her out the door.

Echoing Li, Chinese Hospital Association Deputy Secretary Zhuang Yiqiang said it is not easy for a doctor to cut the cord and work alone. They have to sort out marketing, staffing and protecting themselves from violent patients, a concern in China.

Doctors who choose to operate outside the public hospital system also have to consider insurance needs. Public health insurance can only be used in government-approved hospitals, which means most patients using doctors in Zhang's group must pay their own way.

"It's a cruel reality," Zhang said. "Patients can't go with a doctor, but rather have to go with a hospital."

Zhang hopes the government will relax restrictions on insurance coverage to give his and other doctor groups more room to grow. Until that happens, the group is pricing treatment in a mid-range, between standard insurance pays and what hospitals charge for VIP services for the rich.

"Patients will be relatively more capable of accepting prices if we cut them 60 percent of overall market prices for high-end treatment," said Zhang.

But doctor groups such as Zhang's will have to earn patient trust based on the ability to provide good treatment.

"You can't just look at the doctors. You have to look at whether a platform's overall medical care system is up to snuff," said Hou Shengtian, a management professor at the Beijing University of Chinese Medicine. He said the new doctor groups may generate a lot of social buzz, but they may not be able to retain business over the long run.

Moreover, doctors cannot practice medicine without equipment and support staffers, said Dr. Xie Rushi, director of the comprehensive ward at the Sixth Affiliated Hospital at Sun Yat-Sen University in the southern metropolis of Guangzhou. They also need laboratories, imaging equipment, operating rooms, anesthesiologists and intensive care units.

Xi's argument rings true for Zhang, whose group has contracted with hospitals for surgical and anesthesiological services at private hospitals.

Zhang said once doctors across China are allowed to practice in more than one location,

Dr. Zhang Qiang is living a dream that's shared by most of his fellow doctors in China: He has the freedom to practice his craft – vascular surgery – in more than one hospital.

Unlike the vast majority of doctors nationwide, Zhang can work as a private practitioner while cooperating with as many hospitals as will agree to use his services. It's an arrangement that stands in sharp contrast to the rigidly regulated, government-controlled public hospital system through which most of China's over 2 million doctors toil.

Zhang appreciates his freedom and wants to help his professional colleagues fulfill their dreams as well. He's also in the same camp as many health care academics in China who want the government to do more to marketize the medical system. Many see Zhang's personal success and subsequent push for labor mobility as a major victory for nationwide health reform, but not the end of the battle.

Reform advocates argue that current distortions in pricing for health care services and difficult access to high-quality medical treatment could be resolved if doctors were allowed to practice at more than one facility.

The government launched a reform initiative in 2009 that adjusted some rules to let doctors seek permission to practice medicine in more than one location. But the change did not fully open the door.

Today, most doctors are still required to function as communist system "danwei," or work unit, employees. A danwei offers "iron rice bowl" job security and benefits, but also keeps a doctor tied to one workplace. The system also links credentialing with a health practitioner's legal place of employment, usually the danwei.

Under one reform proposal, doctors would be allowed to change jobs by, for example, choosing to work for a private hospital or clinic. But under this plan, they would lose the benefits available through the public system, including guaranteed employment until retirement.

Zhang had an iron rice bowl arrangement until late 2012, when he resigned from a high-profile post as director of the Shanghai East Medical Center's vascular surgery department. He gave up a 400,000 yuan annual salary – and announced his decision to the public on his Weibo microblog account – not only for more freedom but also as way to help rewrite the rules.

Apparently, a lot of people in the medical community agree with the charismatic Zhang: He boasts about 260,000 fans on China's version of Twitter. And he's attracted big-name medical professionals to his Shanghai-based doctor group.

Accelerating Reform

These days many doctors choose to hold their rice-bowl jobs while also working on the side – and under the radar – for private clinics, hospitals and themselves. They're often working in a legal gray area because, although they're not technically breaking the law, they are going beyond restrictions imposed by each danwei.

Government officials have looked at closing these legal loopholes. To that end, the National Health and Family Planning Commission (NHFPC), which oversees doctors and hospitals, early this year started soliciting professional comments on several proposed policy changes affecting labor mobility for doctors.

Commission officials promised to complete the process by the end of September. But officials told Caixin in mid-September that deliberations were continuing.

Under Chinese law, a doctor can practice medicine only if he or she is registered with the medical institution where he or she legally works. In 2009, the government amended the rule to say that doctors could practice in more than one location "with permission from their current danwei and the relevant health administration department." The amendment added that doctors should "in principle limit their practice to one province, autonomous region or city," and that they should work in "no more than three locations."

NHFPC has recently shown interest in further reform. On January 26, for example, the commission posted on its website a document outlining a plan for letting doctors practice in "multiple locations." It also proposed ending the stipulation that a doctor who wants extra work must get "written permission" from the hospital where he or she is employed.

Moreover, the State Council this year outlined a medical reform plan that calls for "accelerating" rule adjustments so that doctors would be allowed to practice medicine in several locations.

According to the NHFPC, China has about 13,381 public hospitals and 11,584 private hospitals. By far most major hospitals – those with at least 200 beds – are public, according to the 2013 China Health Statistics Yearbook.

Some local governments are eager to see reforms proposals take root. On July 22, for example, the Beijing branch of the NHFPC issued a document laying the groundwork for relaxing restrictions. Officials proposed letting doctors make personal work decisions without permission from a danwei. Moreover, there would be no limits on the number of places where a doctor can practice or a hospital administrator is allowed to work.

Zhang now works for three medical organizations and wants to see his professional colleagues liberated from the system as well.

"I want to put outstanding experts together, organize them into teams and let them practice in multiple locations through contracts," Zhang said. "I want them to receive the same kind of treatment that doctors receive in the United States so that all they need to worry about is treating patients."

Zhang formed his doctors group with the sole objective of providing high-end medical services through partners in different locations. The group system would help make good doctors more accessible and all doctors more attentive, he said.

Doctors like the idea: Zhang says he's been flooded by requests for information from interested doctors. For now, he says, the group of 15 doctors has all the associates it needs. Before adding associate, he said, the group will have to build patient numbers.

"Through these medical workers we're experimenting with medical reform," he said. "They are a part of my experiment. If they're doing well by the end of the next half-year, maybe we can change people's thinking even more."

Team Building

Zhang's group, which launched in June, includes six teams of doctors. These include teams of surgical specialists for treating the vascular system, spinal problems and hernias. He is in the process of building teams to care for patients who need breast cancer treatment and prostate surgery.

A single group employs all necessary doctors, medical assistants, secretaries and other staff members. Zhang functions as the vascular surgical team's "lead expert," but holds a management position as well.

Once all of the groups are established and running well, Zhang said he plans to bow out from any tasks not directly related to medicine, and let a professional manager run the business.

Zhang reckons the group will initially operate something like a talent agency – similar to agencies that represent musicians, actors and other professionals – while financing medical supplies and equipment at hospitals and clinics.

Under Zhang's system, a hospital that agrees to work with his medical group becomes a site where group doctors can practice. The doctors, Zhang and the hospital sign three-way agreements that bar bribery and other shady practices.

Leading experts working on each specialist team take charge of overseeing treatment for patients, making sure they receive quality service.

Zhang said he is confident doctors can earn more through the group than at a public hospital. Through this system, a doctor's earnings will be determined by market demand, so that he or she need not seek bribes, gifts and other kinds of "gray income" to supplement the meager salaries common in China's health care system.

Still, some doctors appear to be willing to accept compensation cuts in exchange for the freedom that comes with working under Zhang's group.

After Zhang's group posted help wanted ads, many doctors who were interested in applying asked Zhang whether working for him implied leaving the public medical system. High-profile doctors "lose a lot by leaving the system," he said. "They immediately say goodbye to annual salaries in excess of 1 million yuan, as well as social security, pensions and other benefits provided by their danwei.

"They're doing pretty well in the old system. They don't have to pay taxes, and they have a big tree to lean on."

Flexibility and Freedom

Zhang's group is up and running even though the government has not given a clear green light to medical practice mobility. Indeed, several doctors who've joined his teams have yet to receive official permission to leave their danweis even though they've submitted resignations.

A city of Shenzhen proposal in July 2013 that would have given doctors permission to practice in several locations was issued by the local branch of NHFPC and spurred hopes that real change was imminent. But the plan was retracted two months later.

Zhang is not the only medical practitioner pushing to give doctors more independence. Song Donglei, president of the Shanghai Neuromedical Center, a hospital that specializes in neurological diseases, helped open a neurological treatment clinic in July at Ruici Hospital in Nantong, in the eastern province of Jiangsu.

Song said that although the government has yet to let doctors practice outside their jurisdiction, members of his team get around roadblocks by saying they provide "medical consultation" services. It's a technical loophole that works, according to one source.

Some doctors have found Zhang's group system impractical. Kunming hospital administrator freedom Li Yi, who works as executive director at the city's privately owned St. John's Hospital, left the public health system in 2009 and tried practicing in several locations. But authorities punished him for breaking the rules by stripping him of his teaching credentials.

In 2010, Li and 21 other medical professionals left the public hospital system to start Renqing Medical Technology Co., a doctor team specializing in cardiology. It operated at St. John's and three public hospitals.

Renqing later lost some of its best-known doctors after they opted to rejoin the public system. Later, Li also decided to work at a public hospital in southwestern Chongqing.

"Practicing at multiple locations is not necessarily suitable for everyone," Li said. "But certainly it is suitable for some."

In fact, Dr. Fu Yishan decided it suited his career. He said he joined Zhang's group July 9 after thinking carefully about whether to walk away from a 30,000 yuan-a-month salary and an iron rice bowl.

Fu said he was happy to leave the public system with its staff power struggles, a promotion system that glosses over a doctor's skills in treating patients and selling medicines to finance hospital operations. He also found the system impervious to change.

Fu added that doctor salaries are often too low to offset costs tied to disputes over patient treatment. Payouts can ruin a doctor's finances.

"Medical services are priced according to the public welfare system," he said, "but compensation payments are set at market prices."

Also leaving the system was Dr. Yu Yuan, sometimes called the "superwoman of emergency medicine." She left Beijing's prestigious Peking Union Medical College Hospital and the Amcare Women's and Children's Medical Health Center in 2013 to join a private hospital.

Yu said other doctors she knows have started making plans to follow her out the door.

Echoing Li, Chinese Hospital Association Deputy Secretary Zhuang Yiqiang said it is not easy for a doctor to cut the cord and work alone. They have to sort out marketing, staffing and protecting themselves from violent patients, a concern in China.

Doctors who choose to operate outside the public hospital system also have to consider insurance needs. Public health insurance can only be used in government-approved hospitals, which means most patients using doctors in Zhang's group must pay their own way.

"It's a cruel reality," Zhang said. "Patients can't go with a doctor, but rather have to go with a hospital."

Zhang hopes the government will relax restrictions on insurance coverage to give his and other doctor groups more room to grow. Until that happens, the group is pricing treatment in a mid-range, between standard insurance pays and what hospitals charge for VIP services for the rich.

"Patients will be relatively more capable of accepting prices if we cut them 60 percent of overall market prices for high-end treatment," said Zhang.

But doctor groups such as Zhang's will have to earn patient trust based on the ability to provide good treatment.

"You can't just look at the doctors. You have to look at whether a platform's overall medical care system is up to snuff," said Hou Shengtian, a management professor at the Beijing University of Chinese Medicine. He said the new doctor groups may generate a lot of social buzz, but they may not be able to retain business over the long run.

Moreover, doctors cannot practice medicine without equipment and support staffers, said Dr. Xie Rushi, director of the comprehensive ward at the Sixth Affiliated Hospital at Sun Yat-Sen University in the southern metropolis of Guangzhou. They also need laboratories, imaging equipment, operating rooms, anesthesiologists and intensive care units.

Xi's argument rings true for Zhang, whose group has contracted with hospitals for surgical and anesthesiological services at private hospitals.

Zhang said once doctors across China are allowed to practice in more than one location, the next step toward granting them freedom will be for doctor groups to attract large numbers of professionals. That will happen, he said, after the first batch of switching doctors with his group proves they can succeed.

 the next step toward granting them freedom will be for doctor groups to attract large numbers of professionals. That will happen, he said, after the first batch of switching doctors with his group proves they can succeed.

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