Chinese anti-corruption investigators have scrutinized more than 170 hospital administrators so far this year, as Beijing targets the lucrative medical sector, which received public funding worth billions of U.S. dollars during the Covid pandemic. More heads are expected to roll in the medical sector, which has been one of the largest sources of public grievances over high costs and rampant corruption. At least two senior pharmaceutical company executives – Winning Health Technology Group Chairman Zhou Wei and Fan Zhihe, Chairman of Shanghai Serum Bio-Technology – were under investigation for alleged corruption.
The sector-specific anti-corruption campaign kicked off just months after China emerged from its three-year zero-Covid strategy, but stepped up a gear as a July 30 deadline neared for people to hand themselves over in exchange for leniency. Data released in March by the National Health Commission (NHC) showed health facilities across the country have received more than CNY110 billion since 2020. The campaign to rid the sector of systemic corruption will continue in 2024. Investigators will report to the leadership next June and new rules and regulations will be introduced based on the results of the investigation.
The urgency of the anti-corruption campaign was reflected in a notice issued last month by the Guangdong Health Commission, which gave major hospitals and medical bodies two days to review an audit report of their finances. Authorities had promised leniency for hospital bosses and officials who surrendered before August.
On July 15, the Ministry of Finance (MOF) issued a joint notice with the National Medical Insurance Administration (NMIA) ordering spot checks of local medical funds and a “thorough investigation” of any violations. About a week later, the NHC announced a year-long “rectification campaign” for the medical sector in a video conference held jointly with the Ministries of Education and Public Security, as well as the General Audit Office (GAO). Further political momentum was injected into the campaign on July 28, when the Central Commission for Discipline Inspection (CCDI) held a video conference calling on inspectors and supervisors to double their efforts.
Nearly CNY300 billion evaporated from the medical sector’s market value in the six trading days after the CCDI meeting, according to Wind, a financial data provider in China. Deng Yuwen, a former Deputy Editor of the Central Party School’s official newspaper Study Times, said President Xi Jinping has set his sights on the medical sector because it has been a major source of public grievances.
“Xi knows these are the things close to people’s hearts. He has tried to tackle skyrocketing property prices and inequalities brought by the tutoring sector in the past five years. He is now going to take on healthcare,” Deng said.
High medical costs are one of the three “major burdens” – alongside housing and education – the Chinese public is complaining about, the South China Morning Post reports.
Multiple Chinese pharmaceutical companies have recently withdrawn their applications for a listing on the A-share market amid strengthened efforts to tackle corruption in the medical sector, and at least 10 upcoming medical industry conferences and forums have been postponed in August.
