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On Life Support

Overworked and underpaid, Chinese doctors are looking to a new medical reform to increase their wages, while hospitals are trying different ways to increase revenues and share them with medical staff

By Niu He Updated Jan.1

Parents and children crowd Beijing Children’s Hospital as they line up for an appointment, September 23, 2023 (Photo by Du Guodong)

A short video created by Tan Qiang, chief thoracic surgeon at Shanghai Chest Hospital, ranked among the top searched topics for September 13 on Chinese platform Weibo. But he did not talk about surgery or hospital life.  

Instead, Tan criticized social media influencer Li Jiaqi for insulting a commenter on his livestream on September 10, who had complained an eyebrow pencil from the brand Florasis cost 79 yuan (US$10.9). Li was roundly slammed for being out of touch with his audience, after he said those who could not afford the product were not “working hard enough.”  

Doctor Tan was incensed, and Li lost more than one million subscribers.  

“Last month, after performing nearly 80 surgeries and providing outpatient services to more than 400 people, my salary should have been a bit over 40,000 yuan (US$5,480), averaging less than 500 yuan (US$69) for each surgery, which means my scalpel technique is still cheaper than Shanghai’s top stylists’ scissor skills,” Tan said in his video.  

“Meanwhile, according to the Diagnosis Related Group, I was told there was an excess charge for a patient with esophagus cancer, therefore, my salary had to be cut by 14,000 yuan (US$1,918) to cover it,” he continued said.  

The Diagnosis Related Group is a payment system designed to control hospital costs and determine pay rates.  

“I spent half my life to become the top thoracic surgeon in the country, I’m not slacking off in my job. But I can’t buy my wife an eyebrow pencil whose per-gram price is higher than gold,” Tan said.  

His video got more than 200 million views, sparking a range of controversy. Some believe he took advantage of Li’s scandal as an opportunity to show off, while others said he saw it as a chance to shed light on how doctors are underpaid.  

Less than two months before, China rolled out a medical reform aimed at addressing the issue of medical staff salaries. The reform was outlined in a joint statement released by six governmental authorities, including the National Health Commission (NHC), the National Healthcare Security Administration (NHSA) and the National Drug Products Administration on July 21.  

“Having prevented medical costs from soaring uncontrollably, China’s medical reform is entering its second stage, where hospital revenues should be distributed as incentives for doctors to focus on their professional development,” Tao Hongbing, director of the Management and Development Research Center of Tongji Medical College, Huazhong University of Science and Technology told NewsChina.  

Payday Woes 
In June 2017, Tao wrote in the Chinese Journal of Health Policy that: “The clinical staff’s thoughts and techniques should play a decisive role in the medical field, rather than funding and equipment. Previous reforms have impacted everything but doctors’ enthusiasm, which is the core competence of public hospitals.”  

According to Tao, the average wage of doctors in developed countries is usually three to five times the average income. However in China, that proportion remains lower than three.  

A survey conducted by Yimi Research in September 2022, which gathered responses from 2,226 participants across the country, showed the average annual income of doctors from clinical work was 94,000 yuan (US$13,243) and 13,000 yuan (US$1,779) from nonclinical work. This is 2.9 times higher than the average income of 36,883 yuan (US$5,049) reported by the National Bureau of Statistics in January. Only 23 percent of respondents reported receiving non-clinical salaries.  

The low incomes and demanding schedules have led 34 percent of doctors from the survey to seek new job opportunities. Many are considering positions in foreign or private hospitals, where annual salaries can reach as high as 200,000 yuan (US$27,380).  

Liu Yuanli, dean of the School of Health Policy and Management at Peking Union Medical College, highlighted the physical and psychological strain experienced by doctors after 10 years of training, especially surgeons who may spend over 10 hours in the operating theater at a time. 

Chinese public hospitals receive funding from a combination of direct government funding, insurance and patient payments.  

In July 2021, a guideline issued by five administrations, including the Ministry of Human Resources and Social Security, outlined the merit pay system for public hospitals, which was first instituted in 2006. According to the guideline, doctors’ wages can be increased based on hospital revenues, with the expectation that the majority of revenue will come from medical services. If there is a surplus in the medical insurance accounts after reimbursing patients, it can be allocated as performance pay.  

Caught between their public remit and the need to balance the books, Chinese public hospitals over the years have adopted a variety of renumeration models. During the planned economy era, they offered ffxed wages. However, after reform and opening-up in 1978, the cost of medical services soared, partly due to expensive and overprescribed medications as doctors sought commissions from pharmaceutical companies to increase their salaries. Now that this practice has been stopped, doctors’ salaries are based on seniority, with extra subsidies and performance pay tied to the number of patients seen and the number of successful surgeries and recoveries. However, the government’s contribution to doctors’ basic salaries is still far from enough.  

Zhang Man, a breast surgeon at a prominent hospital in Guangzhou, capital of Guangdong Province, told NewsChina that her and her colleagues’ salaries are pegged to department revenues, which are distributed regardless of individual workloads. As a result, there are few incentives for doctors to work harder.  

At another leading hospital in South China, doctors’ performance pay is closely tied to their workload. “Doctors who are in charge of more patients and hospital beds get higher pay,” Cheng Hao, an associate chief physician at the hospital, told NewsChina.  

Public hospital doctors eagerly anticipate the new reforms that aim to make their payment system more flexible and rational.  

“The price of many medical services is outdated and needs adjusting,” a chief neurologist at a hospital in Beijing told NewsChina on condition of anonymity.  

Zhao Li, a director of emergency surgery at a hospital in Wuhan, capital of Hubei Province, told NewsChina that the patient registration fee at his hospital has been fixed at 5.5 yuan (US$0.75) ever since he started there in 2006. In contrast, other leading public hospitals in Beijing and Shenzhen, Guangdong Province, have already increased the fee to 50-70 yuan (US$6.8-$9.6). High workloads, night shifts and low pay in emergency wards make it hard to recruit young doctors, emergency physician Song Lin from another top hospital in Wuhan told NewsChina.  
“The current cost and pay of medical service undervalues doctors’ arduous and professional contributions,” Zhao said.  

According to Tao Hongbing, it is reasonable that charges for medical services should generate 60 percent of hospital revenues. However, in China it is about 30 to 40 percent.  

In 2017, the government put a stop to hospitals generating extra revenue from hiking the price of prescription medications. They must be sold at the price they are bought for.  

Liu argued the policy is throwing the baby out with the bathwater. “Although it curbed price hikes for prescription medicines and lessened the pressure on the medical healthcare insurance fund, the costs of selecting, purchasing, storage and adverse-reaction observations can’t be covered if we can’t raise the price,” he said.  

Doctors from Yidu Central Hospital in Weifang, Shandong Province provide medical consults and services at a public square in Weifang, September 23, 2023 (Photo by VCG)

Orthopedic surgeons operate at Xiangyang No.1 People’s Hospital, Hubei Province, October 1, 2023 (Photo by VCG)

No Easy Solution 
An NHC report released on April 7 found that 43.87 percent of 5,456 level-two hospitals (out of a three-tier system) across the country had lost money in 2021 and the rate was almost unchanged from a year before.  

The majority of public hospital income comes from medical insurance and paying patients. But the problem is as public institutions, hospital pricing and salaries are bound by government rules, Liu said.  

“The central part of the remuneration reform is more of an overhauled governance system than internal public hospital reform,” he pointed out.  

In 2019, hospitals in Sanming, Fujian Province tried a different approach, with performance pay linked to different categories such as pay for managing chronic illness or family doctors’ contracted services. The city has also distributed 80 percent of the medical insurance surplus funds to doctors’ payrolls since 2017. By 2020, the average annual salary of a local doctor reached 169,300 yuan (US$23,194), almost three times the wage in 2011, with the highest reaching 598,000 yuan (US$81,926).  

While hailed as a model for what can be done, Sanming’s reform is too complicated to be replicated across the nation, the local health bureau reported in 2020. It took great efforts to coordinate the different interests of different parties, and this may take too long in other areas that have different standards and conditions, they said.  

To give public hospitals more autonomy in shaping their remuneration systems, the NHSA introduced the Diagnosis Related Group and the Diagnosis-Intervention Packet on November 19, 2021. Doctors are paid for their performances categorized and calculated with a list of weighted values including the complexity of the illness, the number of hospitalized days and the surgical risks. However, since both systems set budget ceilings for patients’ medical insurance reimbursements, doctors are reluctant to treat patients who are severely ill and in need of expensive treatments like being admitted to the ICU. If costs overrun, the doctor risks losing some of their own salary as Tan described in his video.  

“If the hospital is in the red due to the excess charges that are not covered [by insurance], our wages will be affected as well,” Zhang said.  

More Attempts 
This year, Hebei and Anhui provinces announced they will institute an annual salary system for hospital directors in some public hospitals. In Hebei, all provincial and half of city-level public hospitals will pay their directors equal salaries. In Anhui, the annual salary including performance bonus can hover between two and four times hospitals’ average wage.  

Liu Yuanli of Peking Union said that paying a manager only once a year, rather than once a month, means they must be rigorous in ensuring much stricter standards across the whole year. While the hospital bosses get more money overall, they can risk losing some of it if they make errors during the year, something that is less likely if they are paid monthly.  

Some public hospitals allow doctors to work at other facilities. However, not everyone can find other jobs, Xu Yucai, the former director of the health bureau in Shanyang County, Shaanxi Province, told NewsChina.  

According to Xu, most doctors who do multiple jobs are senior or specialists in their roles, and their main employer does not want to lose them or their patients to other hospitals. Some hospitals only allow doctors over a certain rank to take on a second position. “So really only a few doctors benefit from multiple jobs,” Xu said.  

Though skeptical about the feasibility of having second jobs, Tao Hongbing said it could be a way for doctors in county hospitals to earn more if they work at village hospitals too. 
According to Liu, the other measures in the new reform include expanding and balancing the medical resources between the most- and least-developed regions, stimulating innovation in the medical field, and improving public hospital management, which will help increase doctors’ salaries.  

He suggested that public hospitals could offer more paid services that patients pay for themselves, such as cosmetic surgery, prescriptions of imported medications not covered by health insurance, and high-end special needs wards.  

“Only when the multilayered demands are satisfied and a differentiated charging and cross-subsidy system is established can public hospitals in the country set up sustainable remuneration mechanisms without losing social welfare functions in the market economy,” Liu said.