Hospital’s duty of care is to patients, not shareholders

KANGNING HOSPITAL, a mental health facility inWenzhou, East China’s Zhejiang province, has become the first psychiatric facility to be listed on the stock exchange. Beijing News comments:

It seems a positive move for a medical group specializing in mental health to be listed on the stock exchange, as it will gain more funding and support.

However, perhaps it should arouse concern. An information asymmetry exists between doctors and patients. That is especially serious in the mental health sector, where many mental health problems are difficult to treat and there is no clear standard on what constitutes a patient’s recovery.

After its listing on the stock exchange, the hospital will need to better serve its shareholders’ interests by making bigger profits. That might lead to patients being encouraged to try expensive but unnecessary medicines.

In this respect, KangningHospital does not have a very good record. From 2014 to the end of June this year, the hospital was involved in 25 medical disputes, 16 of which concerned the death of a patient.

The problem is that not only the mental health sector but the whole of the private healthcare industry is not regulated enough. The supervision of medical facilities has been constantly strengthened over the past 40 years, but now private hospitals are allowed to compete in the market equally with their public counterparts, and there are insufficient legal measures to regulate them. It is time to strengthen regulatory measures to better protect patients’ rights.