Ruminations

China's Wild East Public/Private Medicine

"The patients still give us recognition, isn't that correct? This proves that we have no problems."
"The state has also not taken any measures against us, right? Because our hospitals themselves are very good."
Wu Xidong, Putian health industry association

"The reports were nonsense. Now, when people go and see a doctor, they'll ask: 'Is this a private hospital? Should we go in?' There's a question mark."
"Will they be deceived? It's making things difficult for us."
"I was the first person to create everything."
"We are not selling fake drugs, nor are we deceiving people. The government has done nothing to us."
Chen Deliang, 67, Dongzhuang, Putian, China

"China's health care fraud is pretty rampant."
"With China's private hospitals, there are a lot of traps."
Dr. Ma Jun, director, Harbin Institute of Hematology and Oncology

Scandalous Origins of China's Biggest Private Hospital Group Putian Health Exposed YICAI Global

Mr. Chen doesn't mean 'everything', he does mean he was the founder of the hospital dynasty that has a presence throughout China, a private hospital system that he began and expanded and networked, inviting family and friends to invest their own efforts in the enterprise. It was, and remains, an enterprise that succeeded beyond their wildest dreams. In Dongzhuang where Mr. Chen and his colleagues live, they live in style. All owing mansions, driving luxury vehicles like Ferraris and Lamborghinis. Mr. Chen is now retired, enjoying the fruits of his labours.

He began the empire that is now the Putian health industry modestly enough. Starting out as a salesman of a remedy to treat scabies his enterprise eventually became a chain of clinics to serve clients with sexually transmitted diseases. From that vantage point, the largest network of private hospitals developed and as they developed all those who joined Mr. Chen in his successful network of private hospitals became immensely wealthy.

Putian hospitals account for eight of all ten private hospitals in the country, adding up to 8,000 facilities to serve the health needs of the country. All these hospitals came into being as the work of people with ties to the Putian area. Where the old state hospitals lacked well-trained specialists, quick appointments, state-of-the-art equipment, the Putian hospitals had it all. Public authorities had nothing but praise for the network; even Wall Street invested billions.

The Putian network is a lesson in success. Public hospitals remain subject to tight scrutiny but private hospitals are the responsibility of local governments, most of which lack the resources and expertise to vet the medical profession. It has come to light that some hospitals in the Putian group took to fabricating patients' testimonies and doctors' credentials while others listed false certifications or used outdated treatments. And that led directly into a case that has shocked the country into awareness.

A university student at a Putian-linked hospital was treated with a discredited form of immunotherapy for his cancer. Wei Zexi, the 22-year-old student, had a diagnosis of synovial sarcoma, a rare type of cancer attacking tissue in the muscle joints. He thought the best chance he would have for survival could be accessed at a Putian hospital. He underwent three operations, four chemotherapy sessions and 25 radiation therapy sessions. He took traditional Chinese medicines repeatedly.

Donations gave him the opportunity to buy Keytruda, an immune-therapy drug not available in most parts of the Chinese mainland, paying $5,000 to access it in Hong Kong. Nothing worked for him, and in desperation he looked online for other options. A Putian center at a military hospital in Beijing was listed at the top of his search results, offering an immunotherapy program called DC-CIK. A specialist for the Putian treatment center told him the treatment had a 80 to 90 percent success rate that could extend his life by 20 years, speaking of a partnership with Stanford University.

$30,000 to pay for the treatment was borrowed by the student's parents. And then, as a few months went by, the cancer spread to his kidneys and ten months following his first treatment at the Putian-linked hospital, he was dead. The DC-CIK treatment was seen to be largely ineffective in the U.S. and it had been phased out, and nor was there any partnership with Stanford. In the public view, suddenly the Putian network was emblematic of unfettered corruption reflecting the private health care system.

A military hospital in Beijing that has departments contracted to the medical group from Putian Photo: IC

It all started when during the Cultural Revolution, scabies afflicted many Chinese at a time when doctors were in short supply and access to medicine was limited. Causing Mr. Chen to recognize an opportunity to make a home-made remedy comprised of nitric acid, mercury and vinegar. With it he travelled throughout China, selling his medicine for 30 cents a bottle representing ten times what it cost to produce. At a time in China when public servants were earning about $5 monthly, Mr. Chen was raking in $2,200 annually.

Disciples surrounded him, and he trained them in his practise. "None of us had any medical background", he reminisced. He and his apprentices began renting rooms in small hotels close to bus stations guaranteed to have plenty of foot traffic, and posted ads on utility poles. They began to branch out, opening clinics to treat STDs at a time when prostitution was rising and people were too embarrassed to go to public hospitals. Patients could register anonymously at the clinics.

The Putian network expanded, opening clinics for infertility, dermatology and cosmetic surgery, and then they graduated to opening complete hospitals. In 2003 China gave private hospitals tax-free status in response to severe acute respiratory syndrome sweeping the country, making it imperative that more hospital beds be available along with more quarantine facilities. From there the government agreed to encourage the development of private hospitals to fill an obvious need in that immense population base.

In its online marketing materials Putian features dozens of specialists complete with impressive resumes promoting "abundant clinical experience" and "praise from peers within the industry". Testimonials from happy patients with emotional narratives were placed on line. Some of the Putian hospitals boasted of credentials they were not in possession of. In 2017 a provincial court claimed a hospital had violated local regulations, renting out specialist departments in andrology and dermatology to a man from Putian whom they shut down.

At a marketing firm for Putian hospitals, economics student Xing Jiaming began an internship to gain experience at a successful and growing business. He was assigned to write up credentials for a doctor's replacement, discovering the resume of the replacement was perfectly identical to that of his predecessor's. Mr. Xing was told to promote treatment success rate at the Nanjing Brain Hospital as 100 percent. And he was told to produce testimonials of his own making. "Everything was fabricated by us. None of them was a real case", he admitted.