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Note: China Labour Bulletin recently published our healthcare workers' report: Unprotected yet Unyielding: The Decade-Long Protest of China’s Healthcare Workers (2013-2023). This is the Chapter1 of the report. In this chapter, CLB explores the reasons why medical staff took collective action to seek help and analyzes the changes in the income model of public hospitals under the medical system reform, which led to the delay of medical staff wages and the increase of social security arrears.
Effects of changing hospital funding structure
China’s healthcare system is financed by the government budget (both central and local government), social insurance, commercial insurance, and out-of-pocket payments. Public hospitals in China operate under a partial government funding model (差额拨款事业单位), meaning only part of their income comes from government funds–which do not provide full financial support. According to the 2022 China Health Statistical Yearbook (中国卫生健康统计年鉴), only 8-10 per cent of public hospitals’ annual revenue from 2010 to 2019 came from government financial allocations (and only 16 per cent in 2020, even during the pandemic), with the majority being covered by medical revenue (paid by patient health insurance and out-of-pocket payments). This reliance on income generated from diagnoses and treatments leaves public hospitals in a state of financial instability and under constant pressure to compete for patients.
The pressure to generate revenue, combined with the low medical service price regulated by the government, has led to hospitals relying heavily on drug and consumable markups. As a result, drug and examination fees make up the majority of consultation and treatment revenue. A survey cited by Caixin (財新) stated that among the items charged for medical services in Beijing’s medical institutions in 2015, revenues generated from inspections, laboratory tests, and sanitary materials accounted for 66% while revenues from consultations, surgeries, treatments, and nursing care accounted for only 34%. Data from the China Health Statistical Yearbook also showed that per capita drug and examination fees for public hospital’s outpatients accounted for more than 60 per cent of medical fees in the past 10 years, while those for inpatients accounted for about 35-50 per cent.
Changes in the public hospitals’ funding structure also affect the salary structure and form of employment of healthcare staff. The most prominent feature has been reliance on performance pay (绩效工资), which is tied to revenue generation. Another Caixin article, “Analysis of a Doctor’s Income Problem,” pointed out that the ratio of base salary to performance pay is typically 30:70 or 40:60. As a result, during periods of reduced patient visits and hospital revenue, significant wage reductions and nonpayment of wages and social security can easily occur.
This is also why hospitals are reluctant to hire nurses (who have no prescriptive authority). Even when hospitals do hire nurses, the nurses are often only hired as temporary staff. Temporary staff usually have lower wages and fewer social security benefits than formal staff. This has led to the issue of unequal pay for equal work in China’s hospitals. Such differential treatment has been an important source of protests among healthcare workers.
The rapid expansion of public hospitals, driven by competition for patients and extra revenue, also poses a long-term risk to staff. Overestimating revenue growth can result in hospitals accumulating debt and facing capital chain ruptures. In such situations, workers’ wages and social insurance contributions are often the first to be affected. Meanwhile, doctors over-medicating patients by giving unnecessary prescriptions and tests can lead to patient-physician conflicts, endangering the safety of both.
Hospitals and workers outside the public system have also been deeply affected by healthcare reform. Private hospitals, which have been on the rise since the 1990s, are wholly selffinanced and covered less by health insurance funding. They are more prone to business difficulties, unpaid wages, social security arrears and over-medication than public hospitals. As a result, when public and state-owned enterprise hospitals were privatised, employees went on protests as they believed the restructuring not only threatened their job security and benefits but also compromised the public interest in healthcare services.
The protests against unpaid wages, the demands for equal treatment, and the opposition to restructuring presented in this report can all be traced to the abovementioned background. In 2009, the central government announced another round of reform of the healthcare system, the “New Healthcare Reform” (新医改), in an effort to rectify problems from the past reform. The new reform emphasises the welfare nature of healthcare, with policies like lowering markups on medicines and consumables and raising healthcare service prices. It aims to better reflect the value of medical staff's work while reducing the overall healthcare expenditures of society at the same time.
However, protests by healthcare workers over the past decade have highlighted that the labour issues stemming from the first round of healthcare reform remain unresolved. While the efforts and attempts made by the “New Healthcare Reform” should not be easily dismissed, it is important to consider whether healthcare workers' views are effectively reflected by the union and the reform in general.
Overall statistics on healthcare workers’ collective actions and requests for help
CLB’s labour rights database contains hundreds of incidents in the healthcare sector. The Strike Map collected a total of 135 hospital cases between 2013 and 2023, an average of about 12 cases per year. The Calls-for-Help Map has collected 84 cases between 2021 and 2023, an average of 28 cases per year.
Unpaid wages and benefits
Among the various types of grievances, non-payment of wages, social insurance, or HPF are the primary reasons for collective actions, with 62 incidents (45.9 per cent of the total) recorded. Most protests happened in private hospitals (nearly 60 per cent in private and about 30 per cent in public ones). Among private hospital cases, most protests happened in ungraded hospitals or hospitals without known grades (about 70 per cent). Public hospital incidents, on the other hand, were more concentrated in secondary hospitals (60 per cent).
Meanwhile, the Calls-for-Help Map recorded 71 cases of non-payment of wages, social insurance, and HPF. The hospital ownership and grade distribution were similar to those recorded in the Strike Map.
It is likely that hospitals with unknown grades in our database have primary grades or are simply ungraded. Higher-grade hospitals usually state their grades on their official websites to attract more patients, and such information is usually logged into general online platforms providing basic descriptions of hospitals. Cases involving hospitals with unknown grades are concentrated in the private sector, which makes up a small percentage of secondary and tertiary hospitals (see the graph below).
Equal treatment/Equal pay for equal work
Demand for equal treatment and equal pay for equal work was the second most common reason for healthcare workers’ protests in the Strike Map, with 28 incidents (20 per cent of the total) logged. Unlike the incidents of unpaid wages, protests for equal treatment all took place in public hospitals and were concentrated in tertiary (16 incidents) and secondary (9 incidents) hospitals. The form of employment in public hospitals was a primary cause of dissatisfaction. There were ten incidents of joint actions by doctors and nurses and nine by nurses only–primarily by informally contracted or temporary nurses. Nine cases by medical postgraduates and residents at the end of 2022 were also recorded, as management forced them to work in understaffed hospitals during lockdown.
Income-related protests: Salary/Performance pay/Subsidy
The Strike Map collected 14 cases of income-related incidents, almost all of which occurred in public hospitals. Income-related protests were primarily about low wages or pay deductions, but they were also connected to unfair wage distribution, like wage disparity among workers of different departments and between nurses and doctors. Some of these protests reflected problems similar to those against unequal treatment.
The Calls-for-Help Map also has five related incidents. Two were due to hospitals delaying payment of pandemic subsidies. Hospitals faced public outrage when they received funds from the government but failed to distribute them fairly to the staff.
Restructuring
Issues related to hospital restructuring (改制) were the third most common cause of healthcare workers’ collective actions, with 25 cases recorded–mostly between 2013 and 2019. Many protests against privatisation occurred in former state-owned enterprise (SOE) towns, such as Anshan, Liaoning province; Tangshan, Hebei province; and Wuhan, Hubei province. Workers opposed privatisation and demanded that hospitals remain public or be transferred to local government (so that workers could stay in the public sector with more stable income and some support from government funding).
Although hospital restructuring plans have concluded, related problems remain. Ownership restructuring not only temporarily changes shareholder rights and labour remuneration but also changes capital investment, business model, and workers’ labour conditions in the long term. Cases of wage arrears protests in poorly run privatised hospitals were still recorded in 2023.
Work Safety Issues
The Strike Map recorded 17 healthcare workers’ protests related to work safety issues. Seven were related to protests against patient violence, logged between 2013 and 2017, and ten involved pandemic control arrangements for medical residents in 2022.
In the protests against patient violence, workers often gathered outside the hospitals to mourn the dead and protest against the dangerous behaviours of dissatisfied patients and their relatives. In some cases, hospital management, local government and police tried to stop the protests, further angering the workers. Although these incidents rarely occurred, they were large-scale when they did. For example, over a thousand healthcare workers went on strike in 2013 at the Wenling No. 1 People’s Hospital (温岭 市第一人民医院) in Taizhou, Zhejiang province, demanding the government curb patients’ violence against healthcare workers. A year later, hundreds of healthcare workers at the Luanchuan County People’s Hospital (栾川县人民医院) held a demonstration protesting the deaths of their colleagues due to medical disputes.
The Strike Map did not record new protests against patient violence in recent years, but this does not mean the problem has disappeared. Doctor-patient disputes are still prevalent, with online incomplete statistics recording more than 10 cases of assaults on doctors in recent years.
To be continued.
Download the full report as a pdf here.