Debating Medical Kickbacks: Disreputable Exchanges, Informal Payment and Morality in Post-socialist China

• In Event: 1184 - Section on Organizations, Occupations, and Work Refereed Roundtable Session
  In Refereed Roundtable 100min: Table 03. Healthcare and Medicine

Abstract

Medical kickbacks is not new in China. The exchange channels of kickbacks –or the informal payment that pharmaceutical companies offer to public hospital physicians –emerged as early as 1990s with the urban public hospital transformation together with the booming pharmaceutical industry. This study addresses why medical kickbacks become such an entrenched practice since China’s market reform, even if the Chinese government decries kickbacks multiple times and both parties of the exchange deem it as disreputable.
Recent theories of China’s market transformation (Ang 2014; 2016) maintain that market and institution co-evolves: the state creates market with weak institution, and ever-changing problems in the process of market formation triggers institutional formation. However, few studies investigated the ways by which the coevolution processes influence the way by which Chinese people interpret and understand economic exchange. I borrow the insights from economic sociological study on “disreputable exchange” (Rossman 2014) to explore the everyday practices and discourses of physicians and pharmaceutical reps. Drawing on interviews with physicians, pharmaceutical reps in Shanghai and archival work, I argue that the persistence of medical kickbacks in China is embedded in the configuration of drug market as well as the ambiguous moral frames that mediate the relationships between medical purposes and financial gains. Actors understand the exchange as disreputable instead of transgressive in the context of ever-changing policy environment and market rules which deviates from legal sanctions, moral markets and professional ethics in Western societies. Physicians and pharmaceutical reps view the exchange as “not-that-disreputable” due to the ambiguities of moral frames, which blur the boundaries of for-profit and professional unethical behavior.

Author

• Yibing Shen, Brown University