Doctors' Salary Cut Survey: Public Hospital Pay System Reform "Where Does the Money Come From"

Editor's note: Medical reform is an important issue to ensure basic people's livelihood. China has persisted in implementing medical reform for many years and has achieved visible results. However, the epidemic has had an impact on many hospitals in the past three years, and hospital losses have become the root cause of the doctor's salary cut.

Doctors are the key to supporting the normal operation of the medical and health system, and a reasonable salary system is also the key to mobilizing the enthusiasm of doctors. According to the key tasks of medical reform in the second half of 2023 jointly issued by the Health Commission and other departments, deepening the reform of the salary system of public hospitals is one of the key points. How to deepen reform, Sanming medical reform provides some experience, the core of which is to ensure the reasonable treatment of doctors, but also to broaden the channels of doctors' sunshine income.

"The night shift pay has been reissued, and the performance bonus has been deducted by half, I don't know if it will be deducted next month." An attending physician of Beijing Tongren Hospital told the 21st Century Economic Herald reporter that the salary cut was "over."

Recently, doctors at China's top eye hospital reported a sharp drop in wages in August, with performance bonuses and night shift pay falling by 50%. Immediately, the doctors filed a complaint with the hospital, which aroused great concern from all walks of life.

In the past two years, there have been continuous salary cuts for doctors in hospitals. In June this year, news of doctors' salary cuts came out in Henan, Guangxi and other places.

Behind the salary cuts for doctors, much attention has been paid to the reform of China's public hospital salary system.

It is worth noting that in July 2022, the National Health Commission released national monitoring data on the performance evaluation of tertiary public hospitals nationwide, showing that in 2020, 43.5% of the 2,508 tertiary public hospitals participating in the evaluation had a negative medical surplus.

In September 2023, 21st Century Business Herald reporters visited a number of public hospitals in Beijing, and doctors and experts said that "where does the money come from" for salary reform is the core issue.

Hospital losses affect doctors' income

"There is no document for such a big thing." The aforementioned doctor at Beijing Tongren Hospital said that the salary cut happened suddenly, and only the day before the payday, the department and the doctor "greeted". "Doctors work 24-hour shifts, and the night shift fee is only more than 100 yuan, which must be deducted if it is not troublesome." At present, the hospital has not officially responded to the reasons for the salary cut.

A number of medical staff and related experts analyzed that hospital losses in recent years are the main reason for doctors' salary cuts. On the one hand, due to the impact of the epidemic, the number of hospital visits has decreased, and the business volume and business income have decreased; On the other hand, due to financial impacts, if the disbursement is not disbursed to hospitals, subsidy income will also be reduced. In addition, due to the increase in the workload of epidemic prevention and other work, grassroots hospitals have to purchase protective equipment and consumables needed for daily epidemic prevention, and their expenditure has increased.

Liu Yuanli, executive dean of the School of Health Management Policy of Peking Union Medical College, told the 21st Century Business Herald reporter that under the market economy system, more than 90% of the funds (including the salaries of medical staff) that China's public hospitals rely on for survival and development come from business income. That is to say, the income of hospitals depends on the number of patients and the price of medical services (total revenue = volume of services × the price of medical services), while public hospitals do not have pricing power, and the pricing power is mainly in the hands of the government health insurance department.

"The size of the 'cake' of public hospital income is mainly determined by the government medical insurance department. As a 'public institution', how should public hospitals divide the cake? The 'second mother-in-law' (human resources and social security department) of the public hospital has the final say. Liu Yuanli said.

Looking back at the reform of the salary system of public hospitals, in 2016, the state proposed to allow public hospitals to break the limit on total performance-based wages and establish a dynamic salary adjustment mechanism. In 2017, the Ministry of Human Resources and Social Security and other four departments issued the "Guiding Opinions on Carrying out the Pilot Work of Reform of the Remuneration System of Public Hospitals", in accordance with the requirements of "allowing medical and health institutions to break through the current level of wage regulation and control of public institutions, allowing medical service income to be deducted from costs and withdrawing various funds according to regulations and mainly used for personnel incentives" (hereinafter referred to as the "two permits"), reasonably determine the salary level and total performance salary of public hospitals on the basis of the existing level, and public hospitals independently distribute them within the approved total salary. This is an attempt to "loosen" public hospitals to a certain extent and delegate some of the salary distribution rights.

In 2021, the executive meeting of the State Council adopted the Guiding Opinions on Deepening the Reform of the Remuneration System of Public Hospitals, the core of which is to implement the "two permits" requirement. Liu Yuanli pointed out that this is the first time that increasing the disposable income of hospitals has been proposed in government documents, but specific methods are still needed. At present, a series of documents on the reform of the remuneration system of public hospitals are mainly based on the structural reform of the stock, aiming to "reasonably determine the salary level of public hospitals and the total amount of performance wages", rather than allowing public hospitals to increase revenue.

The salary system implemented by China's public hospitals is mainly two parts: basic salary and performance salary, performance pay often accounts for the majority, and the proportion of basic salary and performance salary is roughly "three seven open" or "four or six open". The basic salary is the post wage determined in accordance with the salary system of public institutions stipulated by the government, depending on the length of service, title and position, and the wage difference coefficient between the same position and different positions is small. The key is that the degree of performance pay is large, and the performance pay of good disciplines is high, which is also related to the performance accounting scheme. Generally, public hospitals can only determine the total amount of overall performance wages after the performance appraisal of the competent department, and the assessment results are usually delayed for half a year or more. This may be the reason why Beijing Tongren Hospital "promised" to pay back performance pay after six months.

Qin Yongfang, founder of Yufang Medical Management, analyzed that most hospital performance plans are linked to income or medical projects, and the incentive orientation is to do more projects and more income to get more, due to the large difference between medical projects and income of various departments, resulting in a large difference in performance income. This performance plan has a high compatibility with medical insurance payment according to the project, and hospitals can get better medical insurance payment. Although a series of medical reform documents hang red lights, not allowing medical staff to link their personal income with business income, it is difficult for hospitals to decouple in reality. Hospital funds are tight, especially hospital losses are widening, and the hope of guaranteeing medical staff salaries can only be pinned on adjusting the price of medical services and additional government investment. However, in the face of downward pressure on the economy, it is difficult to adjust the price of medical services and increase government investment.

The "annual salary system" model of Sanming medical reform can be used for reference

In recent years, there have also been some local cases regarding the reform of public hospital salaries. In order to solve the problem of "where does the money come from" in the salary reform of public hospitals, Sanming City, Fujian Province, took the chaos in the circulation of pharmaceutical consumables as the starting point, squeezed moisture, dynamically adjusted the price of medical services, and established a compensation mechanism to expand the funding channels for the reform of salary.

Zhou Xianbao, deputy director of the Secretariat of the Sanming Medical Reform Leading Group, has been deeply involved in Sanming medical reform since 2009. He told the 21st Century Business Herald reporter, "Sanming's medical reform has been questioned all the way, and there are many places that come to Sanming to try to 'follow suit', but whether it can be changed depends on the determination of local government reform." In 2022, the cost of drug consumables in public hospitals in Sanming District will be 1.15 billion yuan, accounting for 30.96% from 60.08% before the reform. In the past 11 years of reform, 19.858 billion yuan has been saved in the cost of pharmaceutical consumables.

Before the reform, the salaries of medical staff in public hospitals were still mostly linked to economic income, the problem of using medicine to maintain medical care was serious, the marketization of drug consumables led to rebate promotion, and doctors prescribed more drugs for high income. At the same time, hospitals issue large prescriptions and tests to compete for medical insurance funds, and put on the cloak of legality and reasonableness, increasing the impulse of doctors to develop patients and create patients, and patients are high-income resources.

Starting from 2021, public medical institutions in Sanming City will implement an annual salary system for all employees. The annual salary base of the secretary (president) shall be set according to 500,000 yuan for first-class municipal tertiary hospitals, 400,000 yuan for second-class county-level general hospitals, and 300,000 yuan for third-class municipal second-level hospitals. The annual salary base of the chief accountant shall be 250,000 yuan for Class I municipal tertiary hospitals and 200,000 yuan for Class II county-level general hospitals. The basic annual salary of the rest of the various types of personnel, regardless of the size of the hospital, is set according to the professional title. Taking doctors as an example, the basic annual salary of chief physicians is 300,000 yuan, the basic annual salary of deputy chief physicians is 250,000 yuan, the basic annual salary of attending physicians is 200,000 yuan, and the basic annual salary of resident doctors is 150,000 yuan.

"I went through reform from chief physician to deputy chief physician." A deputy chief physician of Sanming City told the 21st Century Business Herald reporter, "The annual salary has increased compared with before, and now it can be about 250,000 yuan per year, and the epidemic has been relatively stable for three years." ”

Regarding the source of annual salary funds, Zhou Xianbao explained that Sanming has established a set of annual salary assessment system for presidents, and the assessment results are linked to the annual salary of the hospital's party secretary (president) and chief accountant and the total salary of the hospital, and the annual salary of the party secretary (president) and chief accountant is borne by the same level of finance, reflecting the management of the hospital on behalf of the government. The General Hospital (Medical Community) coordinates the income of county and rural three-level medical and health institutions for the distribution of annual salaries of all employees.

The sources of funds include the medical community medical service income, the balance of the medical insurance fund, the financial investment of all levels to the personnel of medical and health institutions (including basic salary, basic performance, incentive performance, health technology subsidies, township work subsidies, rural doctor allowances, year-end performance awards), basic public health funds that can be used for personnel expenses, and subsidies for zero difference rate of drugs.

It is worth mentioning that the medical insurance fund covers the balance, that is, the medical insurance fund is packaged to the health management organization (general hospital) according to the county, year and capitation total, and the implementation of "balance retention, overexpenditure and self-responsibility" to guide medical staff from the "treatment and income" model to "reasonable medical treatment and health management" to save money.

"The amount of financing from the medical insurance fund is growing steadily every year, and the health level of the people is generally improving, and this sustainable dividend is another way to solve the problem of 'where does the money come from'." Zhou Xianbao said.

In Liu Yuanli's view, the "Sanming Model" is worth learning from in two aspects. The first is to truly realize the "cage for bird", and use the "squeezed water" from the circulation field of pharmaceutical consumables to compensate for the cost of moisturizing labor. The second is to optimize the distribution structure of doctors' income by implementing a "division of work system" based on performance appraisal in line with the principles of public welfare and quality assurance.

Liu Yuanli pointed out that the real "annual salary system" has two main meanings. First of all, the basic annual salary is stable, the overall target annual salary level is high, and it has a large enough incentive effect. Secondly, the "inverted deduction" based on the assessment results. Another advantage of implementing the annual salary system is that it is convenient for public hospitals to implement total budget management, because the sum of the target annual salary is the upper limit of the labor cost budget, and the actual expenditure will only be lower than this standard, and there will be no "collapse". Under the premise of sufficient total budget, providing stable and high income to medical staff, especially doctors, can help practitioners relieve their worries.

How to set the income multiplier of the doctor's annual salary system? Zhou Xianbao said that Sanming's experience is to refer to international practices and the average salary of local urban employees, setting the annual salary of the president to be 5-6 times the average salary of society, and the annual salary of doctors to be 2-3 times the average salary of urban employees. As the reform deepens to different stages, the base standard will be adjusted.

According to the statistics of the Sanming City Medical Reform Leading Group, in 2022, the annual per capita income of doctors in hospitals of level II and above in Sanming will be 201,100 yuan, with an average annual growth of 8.08%, which is 2.03 times the average salary of on-the-job employees in urban units in the city, and it is still rising steadily during the three-year epidemic prevention and control period.

Most experts believe that it is difficult to increase doctors' sunshine income by hospitals alone, and new channels for expanding doctors' sunshine income should be fully considered. Qin Yongfang pointed out that the medical insurance heavy reward system for doctors, DRG/DIP payment and drug consumption collection dividends, heavy remuneration for doctors, allowing doctors to share the dividends of medical insurance system reform and fully mobilize the enthusiasm of doctors. In addition, it is necessary to increase financial subsidies for doctors' basic salaries. Hospitals should also improve quality and efficiency, control costs and reduce costs, implement gradient incentives, and improve doctors' performance-based salaries.

"Although the hospital promised to reissue [the performance bonus] in January next year, who knows if it can be repaid." The doctor said he and his colleagues were worried.

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