Clinical Bioethics in China: The Challenge of Entering a Market Economy

Abstract

Over the last quarter-century, China has experienced dramatic changes associated with its development of a market economy. The character of clinical practice is also profoundly influenced by the ways in which reimbursement scales are established in public hospitals. The market distortions that lead to the over-prescription of drugs and the medically unindicated use of more expensive drugs and more costly high-technology diagnostic and therapeutic interventions create the most significant threat to patients. The payment of red packets represents a black-market attempt to circumvent the non-market constraint on physicians' fees for services. These economic and practice pattern changes are taking place as China and many Pacific Rim societies are reconsidering the moral foundations of their professional ethics and their bioethics. The integrity of the medical profession and the trust of patients in physicians can only be restored and protected if the distorting forces of contemporary public policy are altered.

Keywords:

• clinical bioethics
• over-prescription
• red packets
• trust

I. INTRODUCTION: CHINA IN A PERIOD OF DRAMATIC TRANSITION

Over the last quarter of a century, China has experienced dramatic changes associated with its development of a market economy (Liang, 2003, p. 260). Given China's successful entry into the market, all of China is to some extent touched by market concerns. In all areas of Chinese society, there are questions raised regarding the appropriate limitations to be set on the market, as well as to where the market should be further developed (Huang, Ye, & Hu, 2004, p. 112). These questions are particularly pressing in health care, because the entrance of market forces has changed the expectations of both patients and families (Li, 2005, p. 41). This article outlines the impact of market transitions on contemporary clinical practice in China and the challenges this poses to Chinese clinical medicine.

At the outset, it is important to underscore that the character of medicine in clinical practice varies greatly across China, as well as within particular areas (Yang, 2002). In Beijing, Shanghai, and Guangzhou, for example, there are private hospitals of excellence providing medical care to foreign nationals and that segment of the local Chinese business community that can afford to purchase services of a medical quality and scope of amenities roughly equivalent to that available in good hospitals in North America and Western Europe (Huang & Haocai, 2003). In contrast, in most places there are few private hospitals. There are only about 1,500 private hospitals, while there are about 70,000 public hospitals across the country (Zhang, Yang, & Feng, et al., 2003). Second, there are good public hospitals frequented primarily by the 30% of the Chinese population that has been provided with various insurance plans, including partially government-financed insurance (Liu, Feng, & Liu, et al., 2004). The latter insurance plan can only be used at approved government hospitals. Although the amenities are often restricted, the quality of medical care in these hospitals often approaches that of private hospitals of the first sort. There are in addition government hospitals in less economically developed areas of China where the standard of medical care and the availability of amenities are much more restricted. There is also a growing number of private hospitals that have not yet reached the quality of the highest-tier private hospitals, and that are struggling because they are not competing on a level playing field with governmental hospitals (e.g., patients with governmental insurance cannot be reimbursed for care in such private hospitals; in addition, the governmental hospitals receive state subsidies). Finally, there are large areas of non-industrial China where farmers have access to very restrictive levels of health care (Zhang, 2003, p. 177).

The character of clinical practice is also profoundly influenced by the ways in which reimbursement scales are established in public hospitals. In response to increasing pressures to contain costs, payments for services in governmental hospitals are set at an unrealistically low level. For example, the consultation fee of a professor-physician in a big city hospital, whose monthly salary is 2,500 Yuan, is 7 Yuan; the consultation fee of a professor-physician in a town hospital, whose monthly salary is 1,500 Yuan, is 5 Yuan. However, both physicians and hospitals can acquire further payments from the direct sale of medications. This state of affairs encourages both prescribing more medications than are necessary to increase volume of sales, and prescribing and selling more expensive forms of medications. Also, because price control makes it impossible to reward directly those physicians known to provide better treatment, informal systems of payment have arisen known as “red packets,” in which an informal extra payment is made by patients or their families to physicians in order to secure quicker or better treatment (Li, 2004).

Last, but not least, these economic and practice pattern changes are taking place as China and many societies in the Pacific Rim are reconsidering the moral foundations of their professional ethics and their bioethics. There are ever more voices from scholars seeking to articulate a moral and bioethical viewpoint grounded in traditional, indigenous, moral perspectives (Alora & Lumitao, 2001; Hoshino, 1997; Qiu, 2004; Tao, 2002). In part, this has been a reaction to a naïve acceptance of North American and Western European moral philosophical approaches and the bioethical perspectives they produced. In part, this has been an attempt to reclaim rich philosophical traditions whose roots are centuries old. In China in particular, there has been an attempt to draw moral foundations and the substance of bioethical commitments from Confucian moral philosophy (Fan, 2002).

II PRESCRIBING TOO MUCH AND UNJUSTIFIABLYPRESCRIBING MORE EXPENSIVE DRUGS

The market distortions that lead to the over-prescription of drugs, the medically unindicated use of more expensive drugs, and more costly high-technology diagnostic and therapeutic interventions create the most significant threat to patients. They run the risk of patients overusing drugs and thus being exposed to clinically unjustified side effects. The same is the case in the use of more expensive, not clearly indicated pharmaceutical interventions, as well more expensive, not clearly indicated diagnostic therapeutic interventions. In each case, physicians are exposing patients to risks that lack a medical justification. From the macro-economic perspective, they burden the system with costs unconnected to health care benefits. From the micro-economic perspective, they impose unjustified costs on patients.

Paradoxically, the blame for these untoward clinical practices is often laid at the feet of the market forces that have been newly introduced to health care in China (Cao & Wang, 2005). That is, the corruption of the fiduciary obligation of physicians to prescribe only indicated drugs in indicated amounts and not to prescribe non-indicated, high-technological diagnostic and therapeutic interventions is often one-sidedly perceived as primarily a reflection of a market concern for illicit profits. What is missed is that this corruption of clinical behavior, in fact, has its roots in governmentally imposed price constraints that do not allow either physicians or hospitals to receive reimbursement for services (especially consultation) at an adequate level (Lin & Du, 2001). Because the price controls focus on fees for service and allow latitude for recouping payments in other areas, clinical practice has been distorted. Yet, the distortion is improperly described as a market distortion; it is rather a function of the character of government regulation and controls on payment for services.

III RED PACKETS: ILLICIT PAYMENTS FOR BETTER-QUALITY CARE

The case of the red-packet system has many similarities to that of over-prescription and improper prescription. The payment of red packets represents a black-market attempt to circumvent the non-market constraint on physicians' fees for services. It should be noted that two sorts of concerns could drive the use of red packets. The first is recognition, however incomplete, on the part of patients and their families of the under-payment from official sources of physicians for their services. The provision of a red packet in this circumstance closes the gap between the limited payment required under law and a payment more commensurate with the quality and attention the patient and the family seek to secure from the physician. Again, this form of corruption is not the fault of the market, but rather represents a black-market solution to governmentally imposed distortions on the market.

In other cases, the payment of a red packet may represent a black-market solution to the fact that it is difficult in governmental hospitals to officially and openly reward those physicians who can provide somewhat better quality care to patients. When the time of any physician is limited, and when a market is undistorted by regulation, the physician's price will rise to that point at which patients are no longer willing to pay for the increased quality of service offered. In this way, there ceases to be queuing for the physician's services, while at the same time those physicians able to give better quality care are rewarded. Solutions of this sort not only encourage physicians to provide better quality care, but encourage more talented individuals to enter into medicine rather than business or other professions because they recognize that they will be actively rewarded for their talents and dedication. The difficulty is that when price constraints are imposed on physician services, the temptation on the part of both patients and physicians is to find a black-market resolution, so that those patients with funds can purchase the quality of care desired. Again, the corrupting distortions are not from the market, but from the character of governmental regulations on the market.

IV AVOIDING CORRUPTION AND RESTORING TRUST

The distortion of clinical judgment and the development of a corrupt, black-market payment system in China threatens the integrity of medical professionals and the trust their patients should have in physicians. On the one hand, physicians are tempted to act against their good professional judgment and in contravention to legal constraints. On the other hand, patients in the case of the red-packet system, moved by concern for better care, are tempted through the economic rationality of black-market payments to secure the quality of care for which they are willing to pay. This last point deserves special emphasis: patients and their families are moved by quite rational grounds to provide red-packet payments, thus fueling a powerful, corruptive force in the physician/patient relationship. Because such transfers take place in violation of established public policy and professional guidelines, not only physicians and patients, but the whole ethos of medicine is brought into jeopardy (Chen, 2002). Since the red-packet resolution is against public policy and professional guidelines (Sun, Tan, & Liu, 2003), the medical profession is not able to coherently regulate and direct the physician/patient relationship in order to nurture integrity and reliability.

The integrity of the medical profession and the trust of patients in physicians can only be restored and protected if the distorting forces of contemporary public policy are altered. It will not be enough to oversee physicians so that they do not over- or improperly prescribe. It will also not be enough to use professional organizations, hospital administrators, and the law to suppress the red-packet system. Nor will it be enough to educate patients regarding the corruptive force of the red-packet system. One will need to address the root causes, which lie in the distortions imposed externally on market forces in health care.

The moral integrity of clinical practice in China can only be recaptured through a set of multiple responses. On the one hand, the distorting forces of regulation must be altered so that physicians and hospitals do not seek to sustain themselves through over- or improper prescribing. This requires payments for physician and hospital services that are both adequate and reward excellence. Both of these points will need to be addressed before one can remove the root causes of the corruption that now distorts clinical practice in China. On the other hand, the effects of the distorting forces of regulation must be countered by conceptions of trust in the physician/patient relationship that have deep roots and resonance in Chinese culture. This will require recognizing the ways in which Confucian thought has always placed the concern for a good livelihood and profit within broader commitments to virtue and community service, especially the Confucian virtue of sincerity and honesty (cheng-xin) (Peng, 2002).