Military institution scandal highlights shady Putianese private clinics

Source:Global Times Published: 2016-5-4 20:23:01



The websites of Putianese hospitals, compared with State-owned hospitals, are often user friendly and attractive to potential customers. Photos: Global Times

 Amid an investigation into a military hospital that allegedly subcontracted its cancer care to a private medical center, which fatally gave substandard treatment to a young man than it reportedly promised, the farmers-turned-entrepreneurs behind the center have been thrust into the spotlight.

To many Chinese people, Dongzhuang, under the Fujian Province city of Putian, is just an obscure village. However, a 2006 report from the Shanghai-based magazine Oriental Outlook has revealed that at least 80 percent of China's private hospitals were founded by Putianese, with total assets of 36 billion yuan ($5.5 billion).

Over the years, although many media reports have revealed how rich the locals are, how ubiquitous their doctors are and the shadiness of their practices - for example, they reportedly sent anonymous threatening letters to journalists and claimed they would bomb their offices - Putianese-owned hospitals, which specialize in venereal diseases, have grown bigger and bigger.

Path to power

Due to a lack of water and land, the coastal village used to be an extremely poor place where residents did not even need to pay taxes. However, Chen Deliang, the village's doctor, created the business model of Putianese-owned hospitals in early 1980s and changed the lives of Dongzhuang's locals.

After gaining fame and money through curing skin diseases like scabies, Chen began to collect apprentices and his secret formula for skin medicines helped Dongzhuang villagers get rich. In the 1990s, they expanded their business into venereal diseases after observing that few State-owned hospitals were willing to treat such diseases at that time.

A report from Shanxi Province-based newspaper City Life in 1999 revealed that there were then at least 400 venereal disease clinics in the provincial capital Taiyuan. And Putianese doctors were exposed as having diagnosed healthy people with venereal diseases, selling fake medicines and defrauding patients.

A reporter from the Southern Weekly, who wrote a story about Putianese doctors in 1999, told the Oriental Outlook in 2006 that the Ministry of Heath released a statement slamming Putianese farmers-turned-doctors for cooperating with State-owned hospitals and institutes of dermatology and venereology to defraud money and entrap patients, which seriously damaged the reputation of State-owned medical organs.

Despite the media reports and government criticism, Putianese doctors did not run away from the hospitals; instead, they have expanded their business all over the country and gradually become a powerful force in China's private medical world.


According to a report from Beijing Youth Daily on Wednesday, after accumulating capital by posting advertisements on telegraph poles since the 1980s, many Putianese doctors began to work with some public hospitals' departments to conquer the market and establish their private hospitals.

Zhan Guotuan, Zhan Yupeng and Lin Zongjin are three of Chen's right-hand men. Zhan Guotuan established an investment company in Shanghai which owns at least 18 private hospitals. He also registered an international hospital management group in Singapore and posed as a foreign investor on many occasions.

Zhan Yupeng established a company in Singapore and allegedly became a Singapore citizen. He reportedly owns at least 14 private hospitals in China.

Along with the booming development of Putianese hospitals, many people began to worry if these doctors have worked their way into public hospitals, even military hospitals. Lin Guoliang, supervisor of the Putian (China) Health Industry Chamber of Commerce, admitted that they have invested in several leading military hospitals across the country.

Medical disputes

The Beijing Youth Daily report also found that Putianese hospitals have been involved in several legal disputes in recent years.

According to China Judgements Online, almost all Putianese hospitals have been sentenced to pay compensation to patients at some point, while some have been ordered to pay compensation to celebrities for using their image in advertisements without their permission.

In July 2014, popular Chinese actress Liu Yan sued Putianese-owned Shanghai Wanzhong Hospital  for using her photo to publicize its plastic surgery services. Liu said that the advertisement would mislead consumers into believing that she was the hospital's brand spokesperson and a local court finally forced the hospital to compensate her with over 50,000 yuan. 

Some Putianese hospitals have also been fined for publishing medical advertisements that breach China's regulations on medical promotion.

Newspaper headline: Harmful hospitals

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