COVID and bust: China’s private healthcare system hit by strict coronavirus checks


SHANGHAI, July 6 (Reuters) – A court in central China’s Fuyang city on March 24 ruled that a $1.5 billion hospital built four years earlier had filed for bankruptcy because that he was unable to pay his debts.

For most of the past two years, Fuyang Minsheng Hospital has been fully involved in mass coronavirus vaccination and testing programs in the city, training nearly 100 staff to perform throat swabs and setting up mobile vaccination facilities to schools and workplaces, at the behest of city officials.

The diversion of resources to what China calls its “zero-COVID” approach to containing and eliminating the virus has forced the hospital to suspend many services it relied on for revenue, sealing its financial failure.

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A civil court decision in Fuyang dealing with Minsheng’s restructuring claim said the hospital’s ‘funding difficulties’ were due to ‘the impact of the epidemic’ as well as its inability to obtain a bank loan .

According to Kanyijie, a news service specializing in China’s medical industry, the 1,000-bed, 16-hectare Minsheng Hospital saw a decline soon after the first wave of infections spread across China.

“Since January 2020, in order to cooperate with the city’s epidemic prevention and control work, the hospital has suspended some diagnosis and treatment activities, and revenue has dropped significantly,” Kanyijie said in April. “There was virtually no medical income and the economic pressures were enormous.”

Even after it went bankrupt, as hospital administrators worked on a restructuring plan, local government officials publicly ordered hospital medical staff to put on protective gear and head to what they called the “front line” of the war on coronavirus, where doctors and nurses rushed to perform 400,000 nucleic acid tests on local citizens in five days.

“We will go where we are needed,” hospital director Li Wenfang told the hospital’s website. “The epidemic is not receding and we will not be receding.”

Minsheng is just one of dozens of private hospitals that have declared bankruptcy in China over the past two years, driven to the limit by the cost of complying with the country’s zero COVID policies. Minsheng and some other hospitals have continued to operate to some extent through bankruptcy, but many have closed, evidence of the unintended consequences of the inflexible policy on the country’s efforts to modernize the patchwork healthcare system that cares for its 1, 4 billion citizens.

The world’s second-largest economy lags behind the rest of the developed world by many health measures and is in the midst of a ‘Healthy China’ program that aims to raise average life expectancy to 79 from 76 by 2030 , while increasing cancer survival rates. and other chronic diseases. Zero-COVID may actually make these goals more difficult to achieve.

“Healthcare facilities at all levels and in all provinces have been affected,” said Hong Xiao, a researcher at the Fred Hutchinson Cancer Research Center in Seattle, who studies the long-term impact of the pandemic on Chinese hospitals. “Human and financial resources have been diverted from routine outpatient and inpatient care for non-COVID-19 illnesses to support mass testing and/or deal with the surge in COVID-19 cases.”

The Chinese health administration did not respond to a request for comment on this story. The country’s leaders have strongly defended the zero-COVID approach as the country’s lowest-cost option, necessary to prevent hospitals from being overwhelmed and to protect an aging population that has low immunity to the virus.

Chinese President Xi Jinping, speaking during a visit to Wuhan last week, acknowledged the economic costs of zero-COVID, but said “it is better to temporarily affect economic development than to harm lives. and people’s health”. He said the consequences would be “unimaginable” if China accepted the coronavirus as endemic, like every other major country in the world.

BANKRUPTCY MORE THAN DOUBLE

Private hospitals are an important part of China’s healthcare system, accounting for around 15% of total patient visits in 2020, according to the latest government data, with public hospitals taking the rest. The country had 35,394 hospitals, both public and private, at the end of 2020.

Forty-six major private hospitals declared bankruptcy in 2021, compared to 26 in 2020 and 21 in 2019, according to the Tianyancha business information database. Twenty-six private hospitals entered formal bankruptcy proceedings in the first five months of this year alone, including Minsheng.

As many as 685 hospitals – public and private – closed in 2020 alone, nearly double the previous year, according to a study based on Tianyancha data released by state media late last year. .

Admittedly, hospitals and health services around the world have been disrupted and weakened by the coronavirus, and some of those that have closed in China have been affected by other factors, such as the government capping drug prices, a source lucrative income. for many hospitals.

But data shows attendance has fallen sharply at private hospitals, in part because of policies requiring them to send patients with COVID-like symptoms to public facilities. Due to widespread lockdowns and fear of being forcibly quarantined or hospitalized, many people have been unable or unwilling to travel to hospitals to receive treatment for other illnesses, depriving revenue hospitals.

The total number of visits to all health facilities, public and private, stood at 7.74 billion in 2020, down nearly a billion from the previous year, according to the latest official data. the first annual decline since 2003.

The medical journal Lancet Regional Health published a study in 2021 that showed the coronavirus outbreak in China in early 2020 had a “devastating collateral effect” on patient numbers across all regions and wards, the figures still not fully recovered as of June 2020, even though the outbreak was largely under control by March.

He estimated that visits to health facilities fell by around 24% from January to June of that year, with the largest reductions in developed parts of the country, largely due to the virus preventing patients traveling to hospitals or hospitals unable to treat them, due to the coronavirus disrupting operations.

“These reductions and stagnations in prevention and treatment are likely to have significant collateral health effects in the population that far outweigh the direct health effects of infection,” the Lancet study said. “Cripping revenue losses…threaten the viability of a significant number of health care facilities and providers.”

DEATH IN SHANGHAI

The diversion of medical resources to enforce zero COVID policies has resulted in deaths, critics say. On March 23, during Shanghai’s recent two-month lockdown, a woman named Zhou Shengni died of an asthma attack after being denied treatment at Shanghai’s East Hospital, which had closed. his emergency department due to “epidemic prevention and control measures,” according to an official notice from the hospital.

China has sought to censor unflattering reports of what happened during Shanghai’s lockdown. Citizens, however, compiled a list using the Airtable data collaboration website, collecting the records of 210 loved ones who the people say died because they were unable to access treatment or their treatment was delayed. Some have uploaded medical documents as evidence. Reuters was unable to independently verify the cases.

Shanghai Health Commission’s Wu Jinglei said at a March 25 briefing that people were struggling to get medical treatment for non-COVID-related illnesses.

“There has been a huge backlog of demands in a short time for emergency services,” Zhao Dandan, deputy director of the Shanghai Municipal Health Commission, said during a briefing in late April. He said “there is still a big gap with the actual needs of the public”, meaning hospitals are still unable to provide the city’s residents with the services they need.

The Chinese government spent at least 150 billion yuan ($22 billion) on coronavirus testing in the first five months of this year, and the total annual cost of building a permanent testing system could reach 410 billion yuan, according to Huachuang Securities, a Beijing-based firm. brokerage.

A 2020 Chinese Ministry of Finance decision said all COVID-related medical costs should be covered by public insurance funds or central government subsidies. The problem for many private hospitals, which provide some of the labor and equipment for such tests, is that they are not necessarily reimbursed immediately by the government for such work, which leaves them makes them financially vulnerable.

A doctor at a public hospital in Shanghai told Reuters that 300 staff members had been engaged in COVID testing since the city’s lockdown began in early April, and continued even after restrictions were lifted in early June, and were always expected by hospital managers to volunteer on weekends to test residents.

A study of the Shanghai outbreak published last month by the Chinese Center for Disease Control and Prevention said the fight against the more infectious but less deadly variant of Omicron had “imposed an enormous burden” on Chinese medical resources. , overwhelming hospitals not with very sick patients, but with asymptomatic patients. and mildly symptomatic cases.

“Regions that previously admitted all people infected with SARS-CoV-2 may not have sufficient hospital resources to admit non-severe Omicron patients,” said the study, authored by a team of local medical experts, including Zhang Wenhong, who expressed skepticism. on zero-COVID policies before. The document was later removed from the CDC’s website.

“All of these resources have been devoted to implementing the zero COVID strategy, and less attention and fewer resources have been devoted to building public health capacity,” said Yanzhong Huang, public health expert at the Council. on Foreign Relations, an American think tank.

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Reporting by David Stanway in Shanghai Editing by Tony Munroe and Bill Rigby

Our standards: The Thomson Reuters Trust Principles.

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