Selling out patient privacy to the milk industry

In the wake of the melamine milk scandal, there’s been renewed attention in China on the benefits of breast-feeding, and media observers have been examining the questionable ways in which dairy companies hawk their products.

An article in the Mirror connects those issues to growing concerns over personal privacy. At the end of August, as the NPC Standing Committee was discussing changes to the country’s criminal law that would beef up privacy protections, the paper printed a report illustrating how hospitals sell off their patient’s personal information.

A Mirror reporter interviewed a sales manager for a milk powder producer who described how his company spends several million yuan every year to obtain the personal information of expecting mothers, and millions more to curry favor with hospital administration and staff:

The reporter called up the maternity ward of a certain Beijing hospital and asked to buy personal information. The response was severe: “No. personal information here is highly confidential. We would never sell it.”

Then the sales manager himself called up the head nurse in the maternity ward. The nurse recognized him and told him to come right over to the hospital to pick up the information.

It’s not an entirely convincing article, however. It’s completely reliant on information provided by one anonymous source, and some of that information seems contradictory: at one point, the sales manager suggests that there are only a few people in a typical large hospital who can access files on new mothers, but later on he gives the large number of people aware of that information as a reason why any investigator would have a difficult time pinning a leak on any one individual.

But if it’s true, it adds another angle on the pressure that new mothers must be facing from the dairy industry to formula-feed their babies.

For the past few days, the fourth session of the 11th NPC Standing Committee met to discuss revising the criminal law to increase protections of citizen’s personal information. yesterday [2008.08.26], a sales manager for a dairy company revealed to this reporter how hospitals make money by selling pregnant women’s personal information.

“Do you know what people are most interested in new mothers’ information?” The interview had just started when the thirty-something sales manager put this question to the reporter. Then, the manager proceeded to answer it in detail.

According to the manager, people who purchase personal information from hospitals, particularly information about new mothers, typically sell baby products or provide related services. Those products mainly include milk powder for pregnant women, infant formula, health supplements, disposable diapers, maternity and baby clothes, shoes and hats, cribs, and strollers. Specialized domestic help companies, hair-stylists for mother and baby, companies that take hand and foot imprints or make calligraphy brushes out of the first hair clippings, photo studios, and even companies that help pick a name for the baby will contact the new mother. “These are all services that a healthy baby needs. In the event of an untimely death, infant funeral companies will contact you to cremate the baby, and cemeteries will call you up, first to offer their condolences and then to sell you a burial plot,” the sales manager said.

During the interview, the sales manager took out a printed form from a hospital, a print-out that detailed the mother’s name, age, ethnicity, profession, position, mobile phone number, home phone number, and address. It also held all of her husband’s information. Additionally, the form recorded private information such as the time of her first checkup and her due date.

To test the information, the reporter called up the father’s mobile phone number. He was shocked at how the reporter was able to obtain the information. When the situation was explained to him, he said that from the day the child was born, he had received nearly 1,000 calls from people offering services or selling something.

The sales manager pointed to the information: “Hospitals actually sell this for just one yuan apiece. It’s all printed out from computers in the maternity ward. You pay for how ever many you print out. Typically, our people will hit all of the hospitals once a week, getting print-outs on several hundred people each time.”

The sales manager told the reporter that in the dairy industry alone there are forty-some major domestic brands plus over a hundred foreign brands. If a hospital sells personal information for one yuan to each dairy, it can make several hundred yuan off each person in just that one market.

He said that there are more than one thousand companies selling products for mothers and infants in Beijing, so if a hospital sells an individual’s information to them, it can make more than 1,000 yuan.

Judging from the materials provided by the sales manager, it would seem that selling personal information is one way for hospitals to make money. But he shook his head: it’s individual doctors and nurses who do it. Contact a hospital and try to buy information if you don’t believe me.

The reporter called up the maternity ward of a certain Beijing hospital and asked to buy personal information. The response was severe: “No. personal information here is highly confidential. We would never sell it.”

Then the sales manager himself called up the head nurse in the maternity ward. The nurse recognized him and told him to come right over to the hospital to pick up the information.

He said, “We always go directly to the hospital. Sometimes we wait in a corner, other times we wait right out in the hallway. We used to call up and make an appointment with them, but later they simply gave us the material they’d already printed out. We gave them the money, they gave us the information, and then we’d hurry off.”

According to the sales manager, generally speaking there are only a few people in a large hospital who can access the personal information of expecting mothers: the head of obstetrics, the assistant head, and the head nurse. These individuals each have their own separate network of companies to which they sell the same information. It’s usually enough just to give them the money; there’s no need for a receipt.

He said that there are many ways hospitals sell personal information, and sometimes the trade doesn’t even take place in the hospital itself. “The information dealer prints out the data in the hospital, and then gives it to us outside the hospital after work. Or they might enter it into their phone as an SMS; then we have to pay for the information and the message fee.” “Some hospitals are even more clever: their computers are connected to the Internet, so they can simply email us all the data. Or we can provide them with a blank USB drive, onto which they’ll copy the data over from the hospital computer. Then we trade money for information,” he said.

He also said that these techniques are unlikely to be discovered: who’s going to be looking for them? Besides, there are so many people in a hospital who can access that information, so even if someone wanted to investigate, how would he determine who sold it?

“Our company has a medical affairs department. A milk powder producer with a medical affairs department — it’s ridiculous, don’t you think?” The sales manager said, “That department is actually responsible for purchasing personal information from hospitals and maintaining good relationships with them. It does nothing but burn money.”

This is how the medical affairs department of that well-known dairy company runs its personal-information gathering operation: First, a dozen or so special sales mangers are responsible for going around to major hospitals to buy personal information. Then the information is turned over to the telemarketing department, where phone operators methodically call up pregnant women.

According to the sales manager, his company only has control of a few maternity hospitals in Beijing’s suburbs. They can’t get in to the major district hospitals because a few major international brands have already cornered the market.

Even so, their medical affairs department spends 20 million yuan every year, much of which goes toward taking doctors and department heads on tours overseas, inviting them to dinner, and sending them gifts. Only a few million is spent on actually obtaining the personal information.

The sales manager said, “Even though we have to burn all that money every year to buy personal information, our annual profit is several hundred million, and we can accept that rate of return.”