Corruption in Hospitals

One of the news stories I’ve been paying attention to recently is the embezzlement and corruption case in Bạch Mai hospital. I’m particularly interested in this story because I actually once worked at a medical equipment company that does similar shady deals. The scale of corruption involved is staggering. It’s even more particularly evil as the burden ends up falling directly on helpless patients.

The Criminal Scheme

As of now, this is a very new case so the details are just starting to emerge. From what I’ve read on the news, it looks like per standard procedure, the hospital contracted a private import-export company to buy and install medical equipment.

What they did was that they grossly inflated the price of the equipment, and then pocketed the differences.

Example: the company bought a brain surgery robot for 7 billion VND, as declared in the customs document. They then sold this robot to the hospital for 39 billion. That’s a 30 billion margin that magically went somewhere else. And that was only one machine.

The state-of-the-art surgery robot at Bạch Mai hospital

To prevent fake prices, the hospital hired a price inspection company that supposedly inspected the machine to make sure the quoted prices are correct. However, it looks like the inspection company was also complicit!

So to pull off this embezzlement scheme, many authorised personnel from different companies would have had to collude. It’s really obvious that the hospital management must have been involved here.

Who ends up paying for the price differences? Of course Bạch Mai is a public hospital so most of it comes from tax money. But what’s especially egregious is that they raised the cost of treatment on patients. For example, a regular surgery with this robot would cost 4 million, but they raised the prices almost 600% and charged patients 23 million! They are literally getting rich off people’s pain and suffering.

A Very Similar Experience

I cannot say that I’m too surprised with this kind of scheme. Back when I was a university student, I worked at an import-export company that specialised in medical equipment. Their business model was sort of like an agency-middleman: they would establish partnerships with an overseas medical equipment manufacturer, and then they would work with hospitals, place bids to win contracts and sell the equipment to hospitals — usually public hospitals.

I was hired to communicate with the manufacturing company, mostly based on my English skills. I would regularly email and talk to the manufacturer’s representative on the phone, inquiring details on the equipment as well as negotiating prices and other deals. I ended up learning many new words about medical equipment. I also had basic graphic design skills, so I’d work on the brochures and the website.

It was a very small company. There were 8 of us on staff. Everything seemed to revolve around the founder/director, a flamboyant woman in her mid-50s who regularly came to work dressed in fur coats, giant sunglasses, and designer handbags.

It was a fun job that I had for a short time. The staff were very close; we regularly ate together and made fun of each other. I was the youngest person there. I also had lots of memorable experiences — I would get to accompany the director to several hospitals, and we even had all-expense paid business trips to Đà Nẵng and other cities.

Me in Đà Nẵng during that business trip.

Throughout that whole period, I noticed several strange things about the company.

  • None of the staff was experts. We were supposed to be dealing with medical equipment, and yet my manager was a guy who used to work at a sausage factory, and the technical guy had never touched a medical machine before.
  • The company never made a single sale during my time there. But somehow, they could afford to lease an office space in downtown Hanoi; they had money to send us on business trips, pay wages, and even buy a company car.
  • The founder never seemed to be present or really involved in the daily operations. She would occasionally showed up, have meals with us, then quickly leave.

Later on, I learned that the founder of the company used to be a high-ranking government official. She now started this company and spent most of her time establishing relationships with people of authority such as hospital managers. I have zero idea what this work involves.

What I did see was that somehow, in the hospital contracts we were going after, all the specifications of the equipment matched exactly with our equipment. For example, the contract would go into extremely specific details such as “The scalpel must be 15.38 centimetres long; the blade must be 1.03 millimetres thick and made of 90% stainless steel”. These also happen to be the exact specs of our scalpel.

This means that no other company could have satisfied the bid requirements except for us. Seems really obvious that the bid was rigged in our favour due to some greasing going on in the background.

Obscene Money

I never knew about the financials of the company, but apparently they only needed to win 1 or 2 contracts a year to turn a profit.

Based off the numbers in the Bạch Mai case, it looks like one machine placed in a hospital could net them tens of billions of VND. And that is one machine, in a contract that often involves a long list of equipment and tools. They can easily make hundreds of billions in one single contract.

Another (in)famous case is the COVID testing systems

That is an obscene amount of money. It’s eve more infuriating to know that 1/ this comes directly from taxpayer money, and 2/ they end up overcharging patients to make up for this expense.

How much money these criminals made I have no idea. I did some Googling and found this case of a hospital director in Hòa Bình who was convicted of embezzlement and some other charges. They found the mansion he was living in, built with opulent wooden furniture and a massive outdoor pond.

Obviously this is just a snippet of his wealth. He must be way richer than this. But well, this guy is supposed to be a public employee, and somehow he managed to accumulate this obscene amount of wealth. I have no comments about his morals or anything, but a public employee becoming this rich should never even be a thing in any just society.

Final Thoughts

Another very interesting aspect of these stories I’ve found is that some of the cases are exposed by journalists. This case of misappropriation of public funds in a Saigon hospital, for example, was the work of journalists from Thanh Niên News. In the Bạch Mai hospital case, it also appears that certain inside intel regarding the purchase of the equipment was shared to Thanh Niên journalists.

Being an investigative journalist in Vietnam is extremely courageous work. I’ve read countless cases of journalists being threatened, beaten, and even killed for their exposé. It is a line of work that I admire a lot.

At the end of the day, corruption has always been a massive issue in Vietnam. It’s part of the culture even — my dad often says, I’m not sure if jokingly or not, that anyone in positions of power would do the same, i.e enriching themselves off public money. Most people have this matter-of-face attitude about corruption.

It only makes sense — to get an entry job at a lucrative government institution like police, hospitals, bank, or customs, I’ve heard that it can cost up to a billion VND in kickback — just to be given an entry-level position! And then to climb up the rank, they have to constantly bribe their way up. It’s only natural that they have to profit off their positions to make a return. It’s a vicious cycle.

I’m not sure if this culture will ever die out in my life time. At least for now, some of the blatant cases of corruption are being exposed. Better than nothing.

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