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Doctor, a risky profession in China

February 15, 2011

By Fiorenzo Conte

China’s health care system underwent a drastic makeover in the 1980s: the public system was dismantled and nothing was created in its place. The government budget support for health care expenses drastically shrank and hospitals were left to rely on user fees. A cap on prices for routine visits was introduced to ensure access to basic services. However at the same time hospitals and doctors were incentivized to earn profits to cover the costs. As Blumenthal and Hsiao explain:

“It (the government ) permitted facilities to earn profits from new drugs, new tests, and technology, with profit margins of 15 percent or more. Furthermore, the government modified its salary-based system of compensating hospital physicians to include bonuses determined according to the revenue the physicians generate for their hospitals. Those revenues depend heavily on sales of profitable new drugs and technologies. The result was an explosion in sales of expensive pharmaceuticals and high-tech services, such as imaging, and rapid overall increases in health care prices and spending.”

An editorial in the Lancet now reports another perverse effect of this shift towards a market based health system: the deterioration of the doctor/patient relationship. As more and more episodes of violence against doctors are happening, hospitals are turning in “battlegrounds”. The reason? Patients complain that costs to access health services are skyrocketing and perceive the doctors as the main ones responsible because they prescribe unnecessary examinations and treatment. The reality is however that cut in government spending forced doctors to find ways to cover the costs. And over-diagnosis and over-treatment represents the main source of such profit for the hospitals.


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