Doctors’ Gray Income and Anti-Corruption

The author worked in the healthcare system 15 years ago. Excluding nurses and support staff, there were about 3.5 million practicing physicians. A doctor's income consisted of three parts: the base part, which was the state-funded basic salary; the bonus part, derived from drug markup margins and rebates/kickbacks from distributors at the hospital level (gray income within the system); and the third part, which was personal illegal income such as kickbacks from pharmaceutical representatives and personal illicit red-envelope receipts. If a doctor's salary was low, it meant they mainly received only the fiscal salary, without substantial bonuses (system-level profiteering) or personal illegal income.

The base salary accounted for roughly 30% of total income. Since doctors earned far less than pharmaceutical reps, some were tempted to take kickbacks. The government could not afford to pay higher salaries and tacitly allowed this phenomenon. Later, policies restricting drug usage ratios were introduced, followed by regulations enabling multi-site practice and private hospitals (public hospitals providing universal care for the public, while private hospitals catered to wealthy individuals seeking personalized medical services, allowing doctors to earn more). However, doctors had grown accustomed to the money from kickbacks and could not easily change their ways. Whether sent down to grassroots postings or moving to private practices, the same套路 persisted. Combined with the worsening economy, opportunities were given but they failed to reform themselves, likely fueling the authorities' determination to launch anti-corruption campaigns.

This analysis is based on conditions prior to 2015.

前传 of Medical Anti-Corruption: The Past and Present of Doctors' Gray Income