Skip to main content

Advertisement

SpringerLink
Log in

Organizational corruption by public hospitals in China

  • Published:
Crime, Law and Social Change Aims and scope Submit manuscript

Abstract

This article studies the rise of organizational corruption by public hospitals in China since the 1990s and its impacts. Organizational corruption refers to the exploitation of public authority by a government agency for its monetary or material gains. This article argues that a combination of three major factors contributed to the rise of organizational corruption by public hospitals. First, the Chinese government substantially reduced its financial commitment to the health sector since the mid-1980s. To compensate for the retrenchment of government health outlays, public hospitals are authorized to earn revenue, keep and use all budgetary surpluses. This policy provided numerous opportunities and incentives for hospitals to engage in corruption. The second factor concerns the excessive and chaotic development of the pharmaceutical sector. Intense competition has prompted many drug firms to offer bribes to public hospitals so that their products would be purchased. Finally, the state regulatory infrastructure has failed to check the spread of corrupt practices. The study raised two broader implications. First, it highlights the pitfall of retrenchment of government outlays and the subsequent policy of allowing state agencies to generate, retain and use the revenue, in the absence of an effective regulatory infrastructure. Second, the prevalence of organizational corruption indicates that the nature of public hospitals in China has been transformed. Instead of providing efficient, safe and affordable treatment for patients, many public hospitals have engaged in predatory behavior that is harmful to patients’ health.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

Notes

  1. Public hospitals are the major forces in the hospital sector in China. They accounted for about 77% of all hospital beds at or above the county level in 2008. See Ministry of Health, Zhongguo weisheng tongji nianjian 2009 (China’s Health Statistical Yearbook 2009) (Beijing: Peking Union Medical College Press, [53]), 66–67.

References

  1. Lu, X. (2002). Booty socialism, bureau-preneurs, and the state in transition: Organizational corruption in China. Comparative Politics, 32(3), 273–294.

    Article  Google Scholar 

  2. Sun, Y. (2004). Corruption and market in contemporary China. Ithaca: Cornell University Press.

    Google Scholar 

  3. Yang, D. (2009). Regulatory learning and its discontents in China: Promise and tragedy at the state food and drug administration. In J. Gillespie & R. Peerenboom (Eds.), Regulation in Asia: Pushing back on globalization (pp. 139–162). Oxford: Routledge.

    Google Scholar 

  4. SinaNet. (2007). Zizhu chuangxin ruo yaoqi xianru dijia exing jingzheng nitan (weak innovative capacity: Drug manufacturing firms were dragged into the vicious cycle of cut-throat price competition). Jingji cankao bao (Economic Reference News), February 15, available from http://chanye.finance.sina.com.cn/yy/2007-02-15/313210.shtml (accessed November 3, 2009)

  5. Song, S. (2007). Guanyu yiyao weisheng lingyu fanshangye huilu wenti de jidian sikao (Reflection on several issues concerning anti-commercial bribery in the health care sector). In L. X. Du & W. M. Zhang (Eds.), Zhongguo yiliao weisheng fazhan baogao No.3 (The Development Report on China’s Health No.3) (pp. 367–375). Beijing: Social Sciences Academic Press.

    Google Scholar 

  6. Wedeman, A. (1997). Stealing from the farmers: Institutional corruption and the 1992 IOU crisis. The China Quarterly, 152, 805–831.

    Article  Google Scholar 

  7. Zhao, C., & Liu, Z. (2004). Guojia fagaiwei quanguo yiliao fuwu he yaopin jiage jiancha jiang zhankai (the national development and reform commission announced the implementation of a nationwide investigation of the prices of medical services and drugs). Xinhuawang (Xinhua Net), March 30, available from http://www.people.com.cn/GB/shizheng/1027/2419334.html (accessed October 7, 2009)

  8. Li, X. (2006). Gao Qiang: Jianjue zhili yiyao gouxiao lingyu de shangye huilu xingwei (Gao Qiang: Steadfastly rectify commercial corruption in the process of medicine procurement). Xinhuawang (Xinhua Net), March 28, available at http://politics.people.com.cn/GB/1027/4246182.html (accessed October 9, 2009)

  9. Jiang, T. Y. (2008). Yiliao lingyu shangye huilu shouduan yinbi weisheng xitong fanfu bunengsong (commercial corruption within the health sector has become more covert, anti-corruption efforts cannot be loose). Xinhua ribao (Xinhua Daily), October 19, available from http://cpc.people.com.cn/GB/64093/64371/8193640.html (accessed October 29, 2009)

  10. Zhou, H. B. (2009). Wuhan gongbu qiqi shangye huilu dianxing anjian (Wuhan announced seven typical commercial bribery cases. Wuhan wanbao (Wuhan Evening News), July 23, available from http://news.sina.com.cn/c/2009-07-23/022518277012.shtml (accessed September 15, 2009)

  11. Wei, Y. H. (2005). Shenji baogao shendu zhuangji yigai (audit report produces strong repercussion on health care reform). Guancha yu sikao (Observation and Musing), July 18, available from http://news.sina.com.cn/c/2005-07-18/14437255659.shtml (accessed October 23, 2009)

  12. Liu, Y. L., & Pei, Y. (2004). Taiyuan baixing huaqian xintong yiyuan shuqian toule (Taiyuan’s people pay unhappily, hospitals count their money happily). Renmin ribao (People’s Daily), August 30, available from http://www.people.com.cn/GB/shehui/8217/34282/34284/2749059.html (accessed October 7, 2009)

  13. Meng, X. Y. (2006). Guangxi Hengxian renmin yiyuan tuihuan sanwan duoren luanshoufei kuan (Guangxi Heng County People’s Hospital refunds illegal charges to more than 30,000 patients). Nanguo zaobao (Nanning Morning Post), September 12, at http://news.sina.com.cn/s/h/2006-09-12/014610985914.shtml (accessed August 18, 2009)

  14. Huang, R. (2009). Shenmi baobiao jiechu Jiangyinshi renmin yiyuan mouli heimu (secret sheets expose Jiangyin People’s Hospital illicit profit-making activities). Xiandai kuaibao (Contemporary Express News), May 19, available at http://www.wlx315.cn/channel027/2009/0519/content_20241.shtml (accessed November 6, 2009)

  15. Qianjiang Evening News. (2009). Jie Jiangyinshi renmin yiyuan tuiyao heimu: Kekou bingren yaopin yuelao qishiwuwan (exposing the corrupt practice of withholding patient medication by Jiangyin City People’s Hospital). Qianjiang wanbao (Qianjiang Evening News), May 15, at http://health.people.com.cn/BIG5/14740/22121/9308524.html (accessed November 6, 2009)

  16. Huo, X. W. (2009). Xiaojinku weihe lujin buzhi (why do slush funds remain despite repeated crackdowns?). Fan fubai daokan (Anti-graft Magazine), 6, 17–18.

    Google Scholar 

  17. Chinese Business Net. (2008). Gansu yiyuan niezao yiqianbabai ren tijian baogao (Gansu hospital fabricates 1,800 health check-up reports). Xibu shangbao (Western Business News), December 26, available from http://gtob.sdnews.com.cn/finance.sdnews.com.cn/2008/12/26/704244.html (accessed October 26, 2009)

  18. Wei, M. Y. (2009). Weishengbu tongbao qiangdiao yiyuan jinxiada chuangshou zhibiao (the ministry of health announced that hospitals could not set up revenue-generation targets). Xinjingbao (Beijing News), February 5, available from http://news.sina.com.cn/c/2009-02-05/040517150653.shtml (accessed October 26, 2009)

  19. Zheng, D. G. (2006). Sichuan sanshiliuming yiyuan yuanzhang shouhui beicha (36 hospital directors in Sichuan Province were investigated for receiving bribes). Renmin ribao (People’s Daily), February 22, available from http://legal.people.com.cn/GB/42733/4129200.html (accessed August 18, 2009)

  20. Zhou, L. M., & Xiong, R. P. (2006). Niuhan Zhang Shu: Shinian jianxin yiyao huikou kangzhenglu (a ten-year difficult struggle against drug kickbacks by Zhang Shu). Xinhua News Agency, June 19, available from http://society.people.com.cn/GB/41158/4500917.html (accessed October 15, 2009)

  21. Wang, X. C., & Huang, M. (2004). Yiyao xixueguan chumu jingxin (terrifying sucking activities of the medical sector). Jingji zazhi (Economic Magazine), 10, http://finance.sina.com.cn/g/20041021/11461096760.shtml (accessed February 26, 2006)

  22. Wang, X. C., & Huang, M. (2004). Zuzhi jingmi tanlan chengxing: Chumu jingxin de yiyao xixueguan (tightly organized and avaricious: Terrifying sucking activities of the medical sector). Jingji zazhi (Economic Magazine), 10, http://finance.sina.com.cn/g/20041021/12021096940.shtml (accessed February 26, 2006)

  23. Wang, F. J. (2006). Hebei Shunpingxian liuyisheng shouhuikou beipan shouhuizui (in Hebei Shunping County, six doctors taking kickbacks were convicted of receiving bribes). Renmin ribao (People’s Daily), February 27, available from http://legal.people.com.cn/GB/42733/4147513.html (accessed November 13, 2009)

  24. Zhang, X. Y. (2005). Yaopin zousi heishou shenjin bingfang (fake drugs from smuggling have sneaked into the hospital wards). Shichangbao (Market News), October 28, http://news.cnfol.com/051028/101,1603,1508565,00.shtml (accessed October 20, 2009)

  25. Sun, B. (2005). Heishou beihou de liyi heimu: Bingfang jingcheng zousi yaopin xiaozangdi (the profitability chain behind the black hands: Hospital wards become the selling points of smuggled drugs). Shichangbao (Market News), November 2, 4

  26. Xi’an Evening News. (2006). Shan zhongyiyao xuehui fushu yiyuan shoujiayao beifa qishi yuwan (the attached hospital of the Shaanxi Chinese medicine association was fined 700 thousand Yuan for selling fake medicine). Xi’an wanbao (Xi’an Evening News), November 20, http://www.zgys.org/zonghe/yaoxue/2006/1120/2002.htm (accessed November 16, 2009)

  27. Hong, X. (2009). Shijiazhuang: Liang gongli yiyuan xiaoshou jialieyao beichachu (Shijiazhuang: Two public hospitals were investigated for using and selling fake and substandard drugs). Changcheng zaixian (Great Wall Net), January 13, http://info.pharmacy.hc360.com/2009/01/13163073632.shtml (accessed November 16, 2009)

  28. Tam, W. (2010). Privatising health care in China: Problems and reforms. Journal of Contemporary Asia, 40, 63–81.

    Article  Google Scholar 

  29. Henderson, G., & Cohen, M. (1984). The Chinese hospital: A socialist work unit. New Haven: Yale University Press.

    Google Scholar 

  30. Tam, W. (2008). Failing to treat: Why public hospitals in China do not work. The China Review, 8, 103–130.

    Google Scholar 

  31. China News Service. (2006). Anhui yiyiyuan danwei shoushou yaoshang huikou beifa bawanyuan (a hospital in Anhui received kickbacks from pharmaceutical companies and was fined one million Yuan). Zhongguo xinwen wang (China News Service), January 16, http://www.yuxi.ccoo.cn/health/healthShow.asp?id=25118 (accessed November 13, 2009)

  32. Jin, C., & Chen, C. (2009). Yiyuan kekou bingren yaopin moulixu: Yuanzhang chengren weigui (hospital withheld patients’ medication for profit-making: Hospital director admitted violating the law). Xiandai kuaibao (Contemporary Express News), May 15, http://news.sina.com.cn/s/2009-05-15/054017818291.shtml (accessed March 19, 2010)

  33. Yang, C. S. (2009). Ezhi yiyuan huikou xingwei renzhong daoyuan (substantial efforts are required to stem the practice of kickback among hospitals). Xinhua baoye wang (Xinhua Newspapers Net), March 21, 2009, http://www.chinavalue.net/Blog/BlogThread.aspx?EntryId=139117 (accessed March 31, 2010)

  34. Sun, B. W. & Bai, Z. F. (2009). Zhengzhou Zhongyuanqu renmin yiyuan chuzu keshi (Zhengzhou Zhongyuan District People’s Hospital leased its clinical departments). Dahebao (Great River News), August 21, http://health.people.com.cn/GB/14740/22121/9905405.html (accessed August 21, 2009)

  35. Sun, Q., Santoro, M., Meng, Q., Liu, C., & Eggleston, K. (2008). Pharmaceutical policy in China. Health Affairs, 27, 1042–1050.

    Article  Google Scholar 

  36. Wang, L. (2004). Guanyuan zhi zhongguo yiyao yangyi de yiliao tizhi zisheng yiliao fubai (official highlights that the policy of using drug sales to finance public hospitals breeds corruption in China). Zhongguo qingnian bao (China Youth Daily), July 23, http://news.sina.com.cn/c/2004-07-23/11173175678s.shtml (accessed October 26, 2009)

  37. Cai, M. (2004). Yiliao fubai dawenti (medical corruption is a big issue). Xinhua wang (Xinhua Net), March 5, http://news.sina.com.cn/c/2004-03-05/11192995197.shtml (accessed October 26, 2009)

  38. Wang, Y. & Zhou, P. (2009). Jiangsu aizimen bao yiyao qianguize (Jiangsu’s AIDS rumor exposes the hidden rule within the medical sector). Nandou zhoukan (Southern Metropolis Weekly), June 15, http://news.sina.com.cn/c/sd/2009-06-15/145818022685.shtml (accessed June 17, 2009)

  39. Li, M. Y. (2006). Jiangsu Huaian yiyao gouxiao lingyu xilie shangye huiluan diaocha (investigation of a series of commercial bribery cases in Jiangsu’s Huaian’s medical sector). Jiancha ribao (Procuratorial Daily), September 26, 2006, http://news.sina.com.cn/c/2006-09-26/075410109317s.shtml (accessed October 20, 2009)

  40. Guo, A. (2008). Bribery law to include doctors and teachers. South China Morning Post, November 26, A4

  41. Sun, C. (2005). Yiyao huilu xingfa gunxia bianshen qiusheng (Seeking to survive under the revised Criminal Law, which targets bribery in the medical sector). Zhongguo jingying bao (China Business Journal), December 31, http://finance.sina.com.cn/chanjing/b/20051231/07102242591.shtml (accessed October 19, 2009

  42. Rijckeghem, C. V., & Weder, B. (2001). Bureaucratic corruption and the rate of temptation. Journal of Development Economics, 65(2), 307–331.

    Article  Google Scholar 

  43. Wang, J. Y. & Wang, Y. X. (2006). Hebei Shunping yiliao huikouan shimo (the origin of the case of medical kickbacks in Hebei’s Shunping). Sanlian shenghuo zhoukan (Life Week), March 2, http://news.sina.com.cn/c/2006-03-02/21479247697.shtml (accessed November 13, 2009)

  44. Yongqing County Net. (2006). Hebei Shunpingxian yiyuan qishiyu yisheng chihuikou beishexiang (in Hebei’s Shunping County, 70 doctors who took kickbacks were covertly videotaped). Yongqing zaixing (Yongqing County Net), March 7, http://www.yongqing.ccoo.cn/health/healthShow.asp?id=27794 (accessed November 13, 2009)

  45. Song, B. (2006). Chengxin yiyuan cheng luanshoufei dianxing shisheide ganga (who should feel embarrassed when a trusted hospital became a model of levying illicit fee). Xinhua wang (Xinhua Net), September 11, http://finance.sina.com.cn/review/20060911/16062903840.shtml (accessed November 9, 2009)

  46. Zhu, Y. (2004). Ruian chu guaishi: Yiliao fubai congsheng yiyuan yuanzhang bei tisheng (something strange happened in Ruian: Hospital director got promotion despite rampant medical corruption). Zhejiang zaixian (Zhejiang News Portal), June 30, 2004, http://news.sina.com.cn/c//2004-06-30/09582947799s.shtml (accessed October 22, 2009)

  47. Zhu, Y. (2004). Zhili baobuzhuhuo: Zhejiang Ruian renmin yiyuan yiliao fubai diaocha (paper cannot not hide fire: Investigation of corruption within Zhejiang’s Ruian People’s Hospital). Xinhua wang (Xinhua Net), July 1, 2004, http://news.sina.com.cn/c/2004-07-01/17072962727s.shtml (accessed October 26, 2009)

  48. People’s Net. (2009). Hangzhou: Yiyuan luanshoufei wujiaju chufa jing xieshang dazhe dingjia (Hangzhou: Price bureau under-penalized hospitals which had arbitrarily charged patients). Jinghua shibao (Beijing Times), April 20, http://unn.people.com.cn/GB/9157009.html (accessed October 28, 2009)

  49. Mechanic, D. (1998). The functions and limitations of trust in the provision of medical care. Journal of Health Politics, Policy and Law, 23, 661–686.

    Google Scholar 

  50. Li, Y. & Huang, C. (2009). 82.4% gongzhong renwei yisheng shiqu zhiye caoshou zui kepa (82.4 percent of the public believed that it is dreadful for physicians to lose their professional ethics). Zhongguo qingnianbao (China Youth Daily), April 28, p. 7

  51. He, X. L. (2009). Baixing zuibu manyi yiyuan (citizens are dissatisfied with the hospitals the most). Xinwanbao (Modern Evening Times), August 18, http://news.sina.com.cn/c/2009-08-18/034916140710s.shtml (accessed August 18, 2009)

  52. Gupta, S., Davoodi, H., & Tiongson, E. (2001). Corruption and the provision of health care and education services. In A. Jain (Ed.), The political economy of corruption (pp. 111–141). London: Routledge.

    Google Scholar 

  53. Ministry of Health. (2009). Zhongguo weisheng tongji nianjian 2009 (China’s Health Statistical Yearbook 2009). Beijing: Peking Union Medical College Press.

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Nanyang Centre for Public Administration, Nanyang Technological University, Singapore, Republic of Singapore

    Waikeung Tam

Authors
  1. Waikeung Tam
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Waikeung Tam.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Tam, W. Organizational corruption by public hospitals in China. Crime Law Soc Change 56, 265–282 (2011). https://doi.org/10.1007/s10611-011-9290-9

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10611-011-9290-9

Keywords

Search

Navigation