A Chinese psychiatrist who took 64 mental patients with him when he moved to a better-funded hospital has sparked debate about doctors’ professional freedoms as China tries to encourage private capital to enter its strained healthcare system.

A state-run hospital in the southern province of Guizhou notified local police last week when Yang Shaolei, its director of psychiatry, transferred all but one of his ward’s patients to a privately backed rival after submitting his resignation. Over the weekend, Guihang 300 Hospital vowed to sue Dr Yang, attacking his actions as “an organised violation of medical consent and medical professional guidelines . . . which tramples on industry rules for healthy competition”.

However, others have hailed Dr Yang as a champion of professional freedoms for China’s low-paid doctors, who are treated akin to civil servants with medical licences and are generally tied to a single hospital.

Reformers have tried to relieve the burdens on public hospitals, in part by encouraging investment of private capital into healthcare. In 2015, China’s health minister even called on physicians to moonlight in the private sector where they can command higher salaries.

Yet while several high-profile private sector businesses have invested in hospitals, many say their public counterparts have prevented their best doctors from moving to private institutions.

“Local governments wouldn’t want to see that happening,” said He Jingwei, a professor at The Education University of Hong Kong. “They see that they have spent so much effort and resources in training doctors and want to keep them. Private healthcare in China is still very undeveloped.”

Reports compared the scene of Dr Yang loading his patients into ambulances as they moved to better conditions to the 1975 film One Flew Over The Cuckoo’s Nest, in which the character played by Jack Nicholson rails against poor conditions in a psychiatric hospital and encourages patients to escape. “Formally, there is nothing wrong with what he did,” a Shanghai orthopaedist surnamed Tan told the Financial Times.

Local authorities said they were investigating the incident. Their response is being watched as a gauge of commitment to healthcare reforms.

“If they punish him, that shows they are not encouraging doctors who move hospitals to take patients with them. If it is like that, then their policy is empty words,” Dr Tan said. Guihang appeared to back down by removing its earlier statement condemning Dr Yang from its website.

Dr Yang’s future employer, Guiyang Number Six Hospital, received a Rmb360m ($53m) injection of capital from a Shanghai-listed information technology company in 2015 and opened a new psychiatric ward in December. Local reports said that more than 100 staff from Guihang, which is lossmaking and operated by a state-owned enterprise, switched to Guiyang Number Six in the past year citing higher pay and better working conditions.

Four of Dr Yang’s patients later returned to Guihang, joining a 103-year-old who was the sole inpatient left behind by Dr Yang. In an interview with the Beijing News, Dr Yang said that consent for the transfers had been given either by the patients or their legal guardians.

“Moving hospitals is better for the patients,” he said. “I was not thinking about money.”

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