Globalization Gone Wild or Just Plain Common Sense?

In October 2024, China’s State Administration for Market Regulation (SAMR) released a Draft Compliance Guide for healthcare firms, mirroring the U.S. Office of Inspector General’s (OIG) guidelines. Despite differing political landscapes, both frameworks underscore a strong commitment to ethical standards in healthcare. Both require robust compliance systems, including policies, audits, and reporting, and extend these standards to third-party agents, ensuring a wide-reaching approach to integrity.

Takeaways

Amid geopolitical divides, China and the U.S. reveal a shared dedication to healthcare compliance. This alignment highlights that in corporate governance, globalization endures, with transparency and integrity bridging borders and building trust across markets.

Curious for more?

If you're interested, I wrote more on how these compliance frameworks reflect the resilience of global corporate governance amidst changing times.

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It was a late evening in Shanghai, years before the pandemic reshaped the world. I found myself at one of China’s top law firms, King & Wood Mallesons, where young lawyers were still hunched over their desks, burning the midnight oil. The scene was strikingly familiar, reminding me of Warsaw a decade earlier—ambitious, well-educated professionals chasing success. That moment shifted my view of China’s future and its growing alignment with global trends.

Fast forward to today, and amidst geopolitical tensions, the idea that globalization is in retreat has gained traction. But is it truly vanishing? The similarities between compliance frameworks in different parts of the world, particularly in China and the U.S., suggest otherwise. A closer look at the healthcare compliance programs in these two countries paints a picture of globalization not only alive but thriving, especially in corporate governance.

Mirroring Compliance Across the Pacific

In October 2024, China’s State Administration for Market Regulation (SAMR) released its Draft Compliance Program Guide for healthcare companies here. What stood out immediately was how closely it resembled the U.S. Office of Inspector General’s (OIG) General Compliance Program Guidance (GCPG) here. Despite their vastly different political and regulatory landscapes, both guides share a commitment to fostering ethical business practices in healthcare.

Thanks to a translation provided by global law firm Morgan Lewis, this Chinese compliance guide is accessible to a wider audience, making it possible to draw direct comparisons between the U.S. and China here. The convergence of their compliance standards shows that even in a world fractured by geopolitical tensions, corporate governance remains an area where similarities outweigh differences.

Key Similarities in Compliance Approaches

Despite differing regulatory environments—China’s tightly controlled healthcare market and the U.S.’s government-funded programs like Medicare and Medicaid—both countries’ compliance frameworks emphasize maintaining ethical standards in healthcare.

• Scope and Purpose: The SAMR draft emphasizes preventing commercial bribery and promoting fair competition, paralleling the OIG’s focus on preventing fraud, waste, and abuse in U.S. healthcare programs.

• Covered Entities: Both guides extend compliance obligations beyond healthcare companies, covering third-party agents like suppliers and distributors in China, and all healthcare providers involved in U.S. federal programs.

• Identifying Risk Areas: Each framework zeroes in on high-risk activities. China’s draft highlights risks in academic visits, consulting services, and donations, while the OIG focuses on areas such as kickbacks, improper claims, and beneficiary inducements.

• Compliance Program Structure: Both systems require comprehensive compliance programs. SAMR’s guide calls for internal policies, audits, and reporting mechanisms, while the OIG’s framework includes appointing a compliance officer, ensuring communication channels, and regular monitoring.

• Cooperation with Authorities: Both countries encourage voluntary disclosure of violations. SAMR offers penalty reductions for self-reporting, mirroring the leniency provided under the OIG’s Self-Disclosure Protocol.

• Gifts, Entertainment: Both the U.S. and China enforce strict limits on gifts and hospitality to avoid undue influence in healthcare decisions. SAMR’s restrictions on gifts to healthcare professionals reflect the OIG’s prohibition on remuneration aimed at influencing decisions.

• Record-Keeping: Both countries mandate meticulous record-keeping. SAMR requires detailed documentation of interactions with healthcare professionals, while the OIG emphasizes maintaining accurate financial records to prevent fraud.

Unified Comparison Table of Compliance Program Requirements

To better understand the global convergence of compliance practices, here’s a side-by-side comparison of the compliance program requirements from both China’s SAMR and the U.S. OIG:

Aspect/Key Element	China Program Draft Compliance Guide (SAMR)	U.S. OIG General Compliance Program Guidance (GCPG)
Written Policies and Procedures	Focuses on clear policies to prevent commercial bribery, especially in areas like donations, consulting services, and academic visits.	Requires comprehensive policies covering fraud prevention, billing practices, HIPAA compliance, and contractor oversight.
Compliance Leadership & Oversight	Requires senior management and a compliance officer to oversee the program and ensure adherence to anti-bribery measures.	Calls for a compliance officer, compliance committee, and board oversight to ensure effective governance.
Training & Education	Regular training to educate employees on preventing bribery and ethical business conduct.	Requires continuous training for all employees on topics such as fraud prevention, billing standards, and healthcare laws.
Auditing & Monitoring	Emphasizes internal audits to assess compliance with anti-bribery laws.	Ongoing auditing and monitoring of billing practices, financial transactions, and federal healthcare program compliance.
Disciplinary Measures & Enforcement	Establishes penalties for employees and third parties who engage in unethical practices or bribery.	Enforces disciplinary actions for non-compliance, with consequences for violators. Incentives for maintaining compliance may be provided.
Risk Assessment	Highlights risk assessments in areas like donations and academic visits, where bribery risks are present.	Focuses on broader risk assessments across areas like billing fraud, kickbacks, and other healthcare fraud risks.
Third-Party Oversight	Extends compliance obligations to third-party agents, including suppliers and distributors.	Requires third-party contractors to comply with U.S. healthcare fraud laws, especially when handling government funds.
Cooperation with Authorities	Encourages voluntary disclosure to Chinese regulators with potential penalty reductions.	Offers leniency and reduced penalties through the OIG's Self-Disclosure Protocol for entities that report violations voluntarily.
Gifts, Entertainment, and Hospitality	Places strict limits on what can be offered to healthcare professionals to prevent undue influence.	Prohibits remuneration or gifts intended to influence decisions in U.S. healthcare programs.
Documentation & Record-Keeping	Requires transparent, accurate records of interactions with healthcare professionals to ensure compliance.	Demands meticulous record-keeping of financial transactions and interactions to avoid fraud and ensure legal compliance.

Conclusion: Is Globalization Really Dead?

If there’s one takeaway from comparing these two compliance frameworks, it’s this: rumors of globalization’s demise have been greatly exaggerated. While the headlines scream about a fractured world, the striking similarities in corporate governance tell a different tale.

Both China and the U.S. recognize the importance of strong compliance frameworks in healthcare. Ethical business practices, transparency, and cooperation with regulators aren’t just national priorities—they’re global ones. And these shared values show that best practices still travel across borders faster than a viral tweet.

So, is globalization still alive? In the world of corporate governance, the answer isn’t just "yes"—it’s thriving. The alignment of compliance programs between China and the U.S. is proof that globalization is alive and kicking, even in these unpredictable times.

One day, I wouldn’t be surprised if we see the tables turn – with Europe and the U.S. adopting top compliance standards set by China. Imagine that: Chinese regulations becoming the global gold standard for integrity!