Healthcare workers at Shanwei City People&9;s Hospital hold up white papers reading "We need to eat" in a collective demand for unpaid wages. (video screenshot).
[November 10, 2024] With the ongoing economic downturn, the survival of China’s public hospitals appears increasingly precarious. A public comprehensive hospital in Meizhou, Guangdong, recently announced its bankruptcy application, shocking many healthcare workers and their families. An expert from the Chinese Academy of Social Sciences believes this hospital's closure is only the beginning, with the real storm yet to arrive.
According to Sanlian Life Weekly on November 9, employees at Meizhou Jiaying University’s Medical School Affiliated Hospital (referred to as "Jiayi Affiliated Hospital") recently reported on social media that the hospital had fully suspended services and asked contract employees to resign.
Signs of trouble at Jiayi Affiliated Hospital had been visible for some time. Late last year, performance bonuses started to be delayed, though the amounts were only a few hundred yuan, which didn’t cause much concern. However, starting in January this year, salaries stopped being paid normally, with only around 1,000 yuan (RMB, same below) issued per month.
According to Zhang Lei (a pseudonym), a healthcare worker, following the salary suspension this year, many healthcare staff resigned, and long-overdue payments to suppliers led to an increasing shortage of medications, resulting in fewer patients seeking treatment.
Zhang Lei and others in the local medical industry noted that of the twenty or so hospitals in the area, only one or two are profitable, while the rest generally operate at a long-term loss, with many hospitals reducing or delaying salaries.
Following the service suspension, the hospital proposed that employees with official positions could be transferred to other hospitals, but as a contract worker, Zhang Lei was asked to sign a resignation agreement. In the eyes of her parents and friends, a public hospital job was a "secure job for life," and they never thought she could "lose her job."
He Bin, a researcher at the Public Policy Research Center of the Chinese Academy of Social Sciences, stated that because of the nature of institutions in China, public hospitals historically have not been allowed to declare bankruptcy. In He’s view, Jiayi Affiliated Hospital’s closure is just the beginning, with a larger storm yet to come.
Public information shows that Jiayi Affiliated Hospital was established in 2009 as a municipal public comprehensive secondary hospital in Meizhou, Guangdong, classified as a public institution. According to data from Qichacha, the hospital had two new enforcement orders issued on October 15 and 30, with amounts of 6.648 million yuan and 5.424 million yuan, respectively.
Staff from the Meizhou Health Bureau confirmed that the hospital had suspended services and was applying for bankruptcy.
The closure of public hospitals in China is uncommon, with the last reported instance occurring after the COVID-19 outbreak in 2021, when Le Shan Fourth People's Hospital, a public second-class hospital, shut down.
More hospitals are struggling to hold on, yet incidents of salary arrears continue to rise. In October alone, several cases of healthcare staff collectively demanding unpaid salaries were reported, including at Shanwei People’s Hospital in Guangdong, Baisha Town Health Center in Zhengzhou, the Fourth People's Hospital in Xinxiang, Henan, and the Second Affiliated Hospital of Bengbu Medical College. These cases involved hospitals ranging from grassroots township health centers to large comprehensive third-tier hospitals.
The closure of Jiayi Affiliated Hospital and the numerous reports of unpaid salaries at hospitals seem to signal that more public medical institutions are falling into financial difficulties.
Data from the CCP’s National Health Commission shows that among loss-making hospitals, 7.51% of secondary public hospitals have an asset-liability ratio exceeding 100%, while 49.53% of secondary public hospitals have an asset-liability ratio over 50%.
Editor: Li Jing
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