Now that your Medical Affairs person has helped you to ascertain which laws you need to comply with, the next step is to determine how those laws are being interpreted. Make no mistake, this can be a confusing and frustrating experience even with the assistance of your medical affairs expert.
As already mentioned in the implementation section, China can be compared to Europe in terms of law implementation and interpretation. An example of this is a situation I encountered once in a city in China. I mentioned in the “Medications In Asia” section how central government have a legislated price list for essential medications. Public hospitals must adhere to this list, however what about private hospitals? The law is not clear on this matter and therefore it falls to the interpretation of the government official on the ground.
Hospital inspections happen frequently in China by officials from the different departments in each level of the health bureau. For example, there may be an obstetrics & gynecology (Ob/Gyn) department at the provincial level, another at the city level, and yet another at the district level. They are all responsible for implementation and interpretation of the respective Ob/Gyn laws, and hospital inspections. In the medication example I mention, the private hospital had an inspection scheduled by the district health bureau department in charge of drug administration. The medical affairs person found out that the district interpreted that private hospitals must adhere to the price list set out for essential medications, and since the private hospital believed that the private sector was exempt from this legislation and had priced their medications up, they removed all pricing information before the inspection occurred. The inspection was passed. The very next week the equivalent department from the city health bureau came for the same inspection. The medical affairs person found out that the city interpreted the law in line with what the private hospital believed, i.e. that private hospitals were exempt from the price control for essential medications. Therefore, all pricing information remained on display for that inspection. During the inspection from the city level drug administration bureau a hospital leader asked the inspector if it was possible to document their interpretation and was told “no”.
Another example of differences in interpretation is that of multi-site practice for physicians. I have found that this subject also can be difficult for foreigners investing into China to comprehend. I will cover the complexity of employment in another post as it is a fairly lengthy subject, however, for this example it is necessary to point out that under the background of a socialist market economy physicians employed in China can only work in one place, and this place is specified in writing. Central government have realized that this is an area that needs to be relaxed and so have officially said that physicians are permitted to engage in multi-site practice. This edict then falls to each province, city, and district to implement. If you wish to understand more about this then I recommend an excellent write-up by Ni Dandan here.
Getting quality physicians is one of the biggest problems for private hospitals. Unlike the West whereby specialists can easily work part-time in the public sector and part-time in private, this is not possible in China due to the background I mentioned above. However, if a foreigner who is new to China and does not understand the complexities of the law asks a local “is multisite practice permitted for physicians” then the local will reply “yes”. Technically the local is correct as this is the line from central government. However, what the foreigner doesn’t realize is that they have a preconceived idea of what “multisite” and “permitted” means, and this conception is not in line with the meaning given by the local! This is a critical point. In commissioning hospitals in China when I have raised the extreme difficulties in hiring high quality physicians I have had foreigners say “why are you having difficulties? I was told by a senior person in the government that physicians can work in more than one place”. In this case the foreigner did not account for their assumptions about how “can work in more than one place” can be interpreted.
Now for the example of differences in implementation for this regulation. In one city a physician is permitted to work in another hospital only on a case-by-case basis, and each case must first be reported to and approved by the physician’s boss. Imagine the paperwork and length of time involved in this situation. In another city physicians are permitted to choose one alternative to their primary place of work and can work in that alternative site without having to get prior permission from their boss, under certain circumstances. As you can imagine, the environment for setting up a hospital in each of these cities is very different and it is critical that an investor has this information.
Where does this critical information come from? One can see from this how important it is to have a person in your organization who has the connections to find out in advance how a law will be/is implemented.