China ordered county-level public hospitals to stop borrowing money after an audit showed some of them took on too much debt when upgrading facilities, according to a document seen by Bloomberg News.
The National Development and Reform Commission, the finance and health ministries and the China Banking Regulatory Commission, requested banks stop issuing new loans and reduce lines of credit to county hospitals nationwide, according to the Oct. 31 emergency notice that was distributed this month and seen by Bloomberg.
The contents of the document were confirmed by three people with knowledge of the matter, who asked not to be identified because the order has not been made public.
County hospitals in Xinjiang in northwestern China were ordered not to raise new debt, according to a statement posted on website of the autonomous region’s Development and Reform Commission, dated Dec. 10. An employee at the NDRC’s information office said such a notice hasn’t been made public and declined further comment. Employees at the Health and Finance Ministry’s press offices declined to comment. Calls to the CBRC’s press office weren’t picked up.
China’s central government spent 450.6 billion yuan ($72.3 billion) in 2009-2011 on improving medical services, which included building and upgrading county hospitals. It is also ordering hospitals to stop marking up the price of drugs, sales of which contribute 50 percent of hospitals’ revenues, in a bid to reduce health-care costs for patients.