From Nation, page 9, issue 337, Oct 15, 2007
Translated by Zuo Maohong
Original article: [Chinese]

Two of Guangzhou's top hospitals-- The Sun Yat-sen University 2nd Hospital and its branch in Ruibao—have been suspended from the local health insurance system for forging medical histories and improperly handling patients in order to commit insurance fraud.

The above two hospitals are the first of their kind being suspended from both outpatient and inpatient medical insurance services since the implementation of medical insurance system in Guangzhou.

A professor with the University's School of Medicine who wishes to remain anonymous tells the EO that the case shows that insurance fraud has become severe enough to have infiltrated top-ranking hospitals. Some data suggests that 30 to 40 percent of hospital funds are involved in insurance fraud.

The Craft of Insurance Fraud

One of the earliest western medicine hospitals in China, the Sun Yat-sen University 2nd Hospital was recognized as "One of the 100 Civilized Hospitals" several times during the past several years.

But according to a source at the Guanzhou Insurance Center who wishes to remain anonymous, the Guangzhou labor department launched a dragnet investigating 800 medical insurance institutions from April to May this year, after which the two hospitals were discovered to have been involved in insurance fraud and forced to withdraw from the local medical insurance system for three months.

Despite the labor department's description of such fraud as "exceptional behavior of the minority", the professor with Guangzhou Medical College disagrees, saying that the situation has deteriorated. He adds that such fraud has become part of doing business for hospitals, since these so-called "hidden rules" of the game are easy to play, highly profitable, and mildly punished.

The EO's investigation revealed that exaggerating the number of hospital admissions is one major way hospitals conduct fraud, since the health insurance center foots bills based on this number.