As the economy continues to decline, the survival situation of public hospitals in China is not optimistic. A municipal comprehensive public hospital in Meizhou, Guangdong recently applied for bankruptcy, shocking many medical staff and their families. An expert from the Chinese Academy of Social Sciences believes that the closure of this hospital is just the beginning, and the real storm has yet to come.
According to a report by the Sanlian Life Weekly on November 9, employees of the Jia Ying Medical College Affiliated Hospital in Meizhou (referred to as the “Jia Hospital”) recently reflected on social media that the hospital has completely stopped accepting patients and asked contract employees to resign.
Looking back, signs of Jia Hospital’s difficulties were evident for some time. At the end of last year, performance bonuses started to be delayed, but the amounts were only a few hundred yuan and did not affect much. However, starting from January this year, salaries have not been paid regularly, with only around 1,000 yuan (RMB) per month being provided.
According to Zhang Lei (pseudonym), a medical staff member, after salaries were stopped this year, a large number of medical staff resigned, and long-term arrears of payments resulted in more and more medicines being in short supply, leading to fewer and fewer patients seeking treatment.
Zhang Lei and others in the local medical industry have learned that out of over twenty hospitals in the area, only one or two are profitable, with most others being in a state of long-term losses, many of which are cutting salaries and delaying payments.
After the closure, the hospital’s proposal was to transfer employees with positions to other hospitals, but as a contract employee, Zhang Lei was asked to sign a resignation agreement. In the eyes of her parents and friends, working in a public hospital was considered a “stable job,” and no one would believe she would also be “unemployed.”
He Bin, a contracted researcher at the Public Policy Research Center of the Chinese Academy of Social Sciences, stated that due to the nature of public institutions, bankruptcies are indeed not allowed in the management history of public hospitals in China. In his view, the closure of Jia Hospital is just the beginning, and the real storm has yet to arrive.
Public records show that Jia Hospital was established in 2009 and is a second-level comprehensive public hospital directly under the Meizhou Municipal government in Guangdong Province, operating as a public institution. Data from Qichacha shows that on October 15 and 30, two additional enforcement information actions were taken against the hospital, with execution targets of 6.648 million yuan and 5.424 million yuan, respectively.
According to a staff member of the Meizhou Health Commission, the hospital has already stopped accepting patients and is applying for bankruptcy.
The closure of public hospitals in China is not common, with the last reported case being the closure of the public secondary hospital, Leshan Fourth People’s Hospital, in 2021 following the outbreak of the pandemic.
While many hospitals are struggling to survive, incidents of wage arrears are becoming increasingly frequent. In October alone, there were multiple reports of collective wage disputes involving medical staff, including several hospitals such as the People’s Hospital of Shanwei City in Guangdong Province, the Baisha Town Health Center in Zhengzhou, the Fourth People’s Hospital in Xinxiang, Henan, and the Second Affiliated Hospital of Bengbu Medical College, covering levels from grassroots township health centers to comprehensive tertiary hospitals.
The closure of Jia Ying Hospital and countless reports of wage arrears in hospitals seem to indicate that more and more public medical institutions are falling into distress.
According to data from the National Health Commission of the Communist Party of China, among the loss-making hospitals, 7.51% of second-tier public hospitals have an asset-liability ratio exceeding 100%, and 49.53% have an asset-liability ratio exceeding 50%.