China will step up anti-graft in healthcare

Significance

The authorities investigated over 200 leading healthcare figures between January and mid-November, compared to just twelve in 2019-22. They may be seeking to combat illegal medical costs to support private consumption, which is one of the top economic goals for 2023. Another motivation could be to address the public’s frustrations with healthcare during the COVID-19 pandemic.

Impacts

• Companies and individuals in pharmaceuticals, medical equipment and healthcare provision are at high risk of being targeted for corruption.
• The healthcare industry and regulators may experience inertia in decision-making during the anti-graft campaign.
• Healthcare firms’ stock prices and ability to raise capital could be hit, with potential knock-on effects for the broader economy.
• People may be more likely to quit or avoid jobs in medicine, which could create staff shortages.