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Zhuang Pinghui

The city of Suqian, northern Jiangsu, used to be known only for being the poorest in the province and the home of Xiang Yu, who led rebellious armies to overthrow the Qin dynasty - the first to rule China under a centralised government.
Then 11 years ago Suqian found itself in the national spotlight as its party secretary, Qiu He, launched medical reforms that privatised all of its public hospitals and clinics. 
The move paid off for Qiu: he went on to become deputy governor of the province and is now party secretary of Kunming, Yunnan.
Whether the changes have paid off for Suqian is more questionable, with some saying the city is in the middle of a dramatic U-turn.
Years after winning the praise of academics for its bold reform, Suqian has announced plans to build a top-level public hospital.
Several other cities, including Nantong  in southern Jiangsu and Shanghai, have bought back privatised hospitals and clinics. 
Is Suqian following suit and backing away from the reforms it had pioneered? 
Academics such as Peking University economist Professor Li Ling  have long held reservations about complete privatisation, warning that the 'profit-driven nature of private hospitals will push up medical costs'. They say Suqian is finally doing the right thing by letting the government provide medical services. 
But Suqian's city government has denied reversing course and says the decision to open a top public hospital was made for practical reasons. It says the hospitals in the city that have already been privatised can remain so, if they choose.
It says a changed situation has prompted it to explore new ways to meet demands. 
'For starters, Suqian has a population of 5.4 million and we need a hospital that can provide quality service, a class 3A hospital,' a deputy director of Suqian's Health Bureau, Cheng Chonggao, said, referring to the top level of the mainland's hospital system. 
The best hospital, the Suqian People's Hospital, is only class 3B and even that is the result of expansion after the sale of a 70 per cent share to Jinling Pharmaceutical in 2003. 
'It is not that we have to run a public hospital on our own,' Cheng said. 'We have been in talks with several interested hospital groups but eventually failed to reach a deal. If a group comes and says they can establish a class 3A hospital, we will give the green light.' 
The management of the Suqian People's Hospital, whose business is expected to be threatened by the new public hospital, says it is confident the hospital's revenue will not be affected. 
'Unlike outsiders' speculation, we quite welcome the move,' said hospital vice-president Fan Jintian, from Jinling Pharmaceutical. 
Fan said the hospital was being swamped by patients and staff were unable to handle such numbers.
'Last year, during the hand, foot and mouth disease outbreak, there were so many patients that our staff simply could not handle them,' he said. 'We don't have enough beds for inpatients either. I think we need another hospital here in Suqian.' 
The city's current party secretary, Miao Ruilin, told the heads of the city's private hospitals and clinics last month  that it 'is not moving from one extreme to another'.
'We will not try to buy back the privatised hospital and we will continue to encourage and support private capital to run medical institutions,' Miao said. 'The government will increase input as well.' 
Cheng said both the original decision to privatise hospitals and the new decision to establish a public one were made in response to changing demands. 
The city was so short of funds 11 years ago that even teachers and public servants could not get paid on time. More than 70 per cent of township hospitals posted losses and two-thirds of medical staff were not paid regularly. The medical resources enjoyed by residents before the reform were less than a third of the provincial average and there were just 1.06 hospital beds for every 1,000 people, less than half the provincial average. 
'The government funds could barely keep the door open and we did not have enough funds to invest in social causes,' Cheng said. 'Private capital showed a strong interest to invest in hospitals and we needed the financial help.'
Ten years on, Suqian remains at the bottom of the province in terms of gross domestic product and looks more like a county seat than a municipality. Its first shopping mall, with a Wal-Mart, is due to open soon. But medical resources per capita have risen to more than half the provincial average and there are twice as many beds for every 1,000 residents.
'Before we didn't have medical resources at all and inviting private capital has solved that problem,' Cheng said. 'But it is time that we tackle a different one and provide quality medical care to residents.' 
One dilemma that Suqian has been facing is that its privatised hospitals and clinics have not been eligible for health care reform subsidies from higher level governments.
 The central government pledged to provide more than 850 billion yuan (HK$1.04 trillion) nationally from 2009 to 2012. 
The city has failed to get subsidies for upgrading low-level hospitals and clinics because the funds are only meant to go to public institutions. 
So, despite Miao's pledge, the city government is planning to step up control of state-owned assets in private medical institutions. In February last year, it established an investment centre to manage public funds injected into them. 
It said that government funds, equipment and materials invested in private hospitals would have to go through the investment centre. The assistance could take the form of a loan, a rental agreement or be in exchange for shares - with the choice up to the private hospitals.
 All the private hospitals that have secured more than 750,000 yuan in government funds have opted for loans. 
The city government also has to come up with pioneering ways to launch a basic drugs catalogue programme, part of national health care reforms announced in April 2009. It is designed to scrap the medicine surcharges imposed by hospitals and bring down the cost of treatment at low-level hospitals. 
The private hospitals, especially the low-level ones, were reluctant to embrace the programme because it would hit their profits. In response, the government designed a scheme last month that will see subsidies paid to patients instead. 
Cheng said the new hospital, even though it would be funded by public money, would explore public hospital reform.
 Instead of the usual practice of the health bureau administering the hospital and controlling personnel, the bureau will have very loose control of the new hospital. It will have a board of directors, with members from different interest groups, which will then appoint a president who will be responsible for choosing staff. 
'The health care reform China is going through covers a lot of areas, and Suqian is like a museum of medical reform,' Cheng said. 'We hope we can find some experience that is a useful reference.' 
For residents who are still nostalgic about government-run hospitals, they believe the planned hospital will be their saviour. 
One described how his son, 4, was checked into Suqian People's Hospital to treat a broken arm but was left screaming on a bed because the family was told it was a Friday night and the doctor would only come on Monday. The father then transferred the child to another hospital and had the surgery done the next day after using his connections with the hospital. 
'I was very angry at that time,' he said. 'The nurse said they would not schedule surgery for my son immediately and nor would they release him from hospital. They gave in after they saw me videotaping it with my mobile phone and became worried I might put the stuff online. I bet a big public hospital would not do that.'
$10
The amount, in US dollars, that is spent per person per year on health care in China
- The figure for the US is about US$6,000



A change of direction