Pay back to avoid hospitals! Cutting off the Chain of Medical Corruption and Benefits in Multiple Regions, Medical Insurance | Drugs | Corruption

Not only sales need to have "channels", but also "management" when collecting payments... For a long time, the "payment collection" process in the pharmaceutical purchase and sales process has also been targeted by many people, and related positions have become a "fat gap" to make money. To solve the persistent problem of "difficult payment collection", efforts have been made at the national and local levels to promote the improvement of settlement methods and cut off the hidden chain of interest transmission.

Want to receive payment first? The finance department also cannot escape the temptation

Zhongxin Finance and Economics has noticed that in recent anti-corruption efforts in the pharmaceutical industry, in addition to hospital leaders and knives becoming the main targets of corporate bribery, corruption has also spread to departments such as finance and administrative logistics. Many of the investigated cadres are from the finance department.

In July 2022, the website of the Central Commission for Discipline Inspection and the National Supervisory Commission released an article titled "Correcting Medical Corruption and Persistent Diseases", which revealed that multiple party members and cadres in the medical and health field rely on medical treatment. The interest groups that divide the cake of pharmaceutical purchase and sales rebates are far more than clinical doctors and relevant leaders.

For example, Liu Mourong, former head of the Finance Department of Xiangshui County People's Hospital in Jiangsu Province, is mainly responsible for various financial management activities such as revenue, expenditure, and budget of the hospital. Especially in the invoice entry, reconciliation, and payment collection of suppliers, he is an indispensable part.

In order to receive payment and recover funds as soon as possible, the supplier tried every means to curry favor with Liu Mourong, offering "sincerity" on time and on time at important nodes such as the Mid Autumn Festival and Spring Festival, ranging from a few thousand to tens of thousands. Between 2015 and 2021, he illegally received bribes from suppliers and others, including cash and shopping cards, totaling over 480000 yuan.

And this phenomenon is not an exception. A medical device agent has revealed to Zhongxin Finance that in addition to sales, there is also room for accepting bribes in the payment settlement and other links between hospitals and enterprises.

According to its introduction, currently, some hospitals have a fast repayment cycle of three months, and a slow cycle of six to eight months. There are also those that exceed one year or even two years. "Under normal circumstances, it is queuing up for repayment, but sometimes it is' selective repayment '. In some places, suppliers need to go and demand debt, and at this time, they may have to give some benefits to the financial supervisor's leadership."

This also means that, driven by interests, whether it is clinical healthcare, procurement, or administrative logistics personnel, they may become the "target" of suppliers. And in the procurement of medical devices, equipment, and consumables, the excessive costs will ultimately be passed on to patients.

The problem of "triangle debt" has a long history

In fact, the "triangle debt" problem between hospitals, enterprises, and medical insurance funds has a long history. As an absolute purchasing entity, public hospitals have long been in a dominant position in the actual procurement process of products, which has led to third-party agents always needing to advance payment, thus giving rise to the industry problem of "slow payment collection" for medical institutions, and even being assumed to be "rules".

Not only do sales need to have channels, but also when collecting payments, many agents feel helpless about this. Long term arrears of payments also damage the company's profits.

Although pharmaceutical companies have always called for solutions to the above-mentioned problems, in reality, there are still many barriers to solving the problem of difficult collection of accounts. Hospitals occupy the working capital of production enterprises for free, and the most direct and effective way for production enterprises to reduce sales costs is to increase prices.

Industry analysis suggests that in the context of centralized and volume based procurement of drugs and consumables, it is evident that some hospitals have narrower income channels, and relying solely on immature medical service revenue cannot achieve hospital revenue and expenditure balance. Therefore, hospitals may ultimately shift the pressure onto pharmaceutical and equipment enterprises, and the time for payment collection will become longer and longer.

Moreover, hospitals are not unable to collect payments, but rather unwilling to do so, using their strong position to force pharmaceutical companies to make up for the income gap. Even because some hospitals have long been in arrears with payments, they feel guilty, causing a shift in their stance and turning a blind eye to issues such as pharmaceutical equipment procurement, ultimately harming the interests of patients.

Screenshot of the official website of Hunan Provincial Medical Security Bureau

Payment collection bypasses direct settlement of hospital medical insurance

Zhongxin Finance has noticed that in response to the persistent problem of "difficult payment collection", both the national and local levels are promoting the improvement of settlement methods.

For example, in the "Opinions of the General Office of the State Council on Promoting the Normalization and Institutionalization of Centralized Volume based Procurement of Drugs" released in 2021, it was mentioned that medical institutions should bear the main responsibility of procurement settlement, timely settle drug payments with enterprises according to the procurement contract, and the settlement time should not exceed the end of the following month after the delivery acceptance is qualified.

In addition, the document also mentions that under the premise of implementing the main responsibility of medical institution procurement settlement, we will explore ways to promote direct settlement between medical insurance funds and pharmaceutical enterprises through the establishment of drug electronic settlement centers in provincial drug centralized procurement institutions.

At present, many regions have started to test the situation one after another, bypassing hospitals during the payment process and shifting to direct medical insurance settlement.

For example, previously, Dezhou City in Shandong Province took the lead in implementing medical insurance fund settlement for drug payments in the province. Public medical institutions purchase drugs through national and provincial centralized procurement, as well as all drugs purchased by grassroots public medical institutions, through the Shandong Province Drug and Medical Consumables Procurement System. The corresponding amount is directly settled between the medical insurance fund and the pharmaceutical enterprise, and deducted from the funds settled by the medical insurance to the hospital. This reduces the average settlement period for pharmaceutical consumables from 8 to 12 months to 30 days.

In December 2022, the Implementation Opinions of the General Office of the People's Government of Jiangxi Province on Promoting the Normalization and Institutionalization of Centralized Volume based Procurement of Drugs and Medical Consumables were released to the public.

The document also clearly states that the purchase payments for selected drugs and medical consumables will be settled directly between the medical insurance fund and pharmaceutical enterprises, and a sound turnover fund system will be established. Specifically, the medical security department will directly settle the purchase payments for selected drugs and medical consumables with the drug and medical consumables supply enterprises through a volume based procurement turnover fund custody account.

Just a few days ago, the website of the Hunan Provincial Medical Insurance Bureau released a notice on the implementation of direct settlement of selected drugs and medical consumables through the medical insurance fund, which specifies that starting from October 1, 2023, the payment for selected drugs and medical consumables through centralized volume procurement will be directly settled by the medical insurance fund throughout the province.

With the acceleration of the nationwide direct settlement system, the persistent problem of "triangle bonds" may be solved, and ultimately play a role in cutting off the transmission of benefits and safeguarding the interests of patients.