Wang Ju PAI AN | Li Yapeng’s Smile Angel Children’s Hospital, it’s better to close it down as soon as possible! | Text Version

1. Public Opinion Hotspot: Li Yapeng’s “Charity Dilemma”

The person you see now, who is complaining to the reporter, is named Li Yapeng. He is very famous, Linghu Chong in “The Smiling, Proud Wanderer” and Guo Jing in “The Legend of the Condor Heroes.” The handsome young man of those years has now become a middle-aged man with a beer belly. Li Yapeng hasn’t had a particularly smooth time in recent years. It seems he has failed in marriage two or three times. He loses money in business, it seems in real estate and such. It is said that at the worst of times, he owed more than 100 million, and he moved out of his big mansion and lived in a small apartment.

This time he complained to the reporter because a children’s hospital under his name, called Angel Smile Children’s Hospital, is also going to close down. Why is it closing down? He owes the landlord 26 million yuan in rent. The rent has become 11 million yuan a year, which is a bit unbearable. Then, the three years of the 2020 pandemic came, so he has been in arrears of 26 million yuan in rent over the past few years. But the landlord is not happy and has removed his sign, and then sued him in court. The court ruled that he should move out. Li Yapeng said that moving out is not impossible, but it is more difficult to move the hospital, as there are many equipment and operating rooms.

More importantly, his hospital has a cleft lip and palate center, which specializes in performing surgeries for children with cleft lips and palates. He said, you see, the implication is that the landlord is a bit unkind, forcing him, a person doing charity, to move.

2. The Landlord’s Grievances and the Nationwide “Rescue” Movement

As a result, the media went to interview the landlord, and the landlord was also full of grievances. What did the landlord say? He said that when the first ten-year lease was signed in 2009, considering that Li Yapeng was indeed doing charity, the rent itself was discounted, 50% lower than the market price. Then, in 2019, both parties negotiated to restore the rent price to the normal market price level, which Li Yapeng also agreed to. But now, Li Yapeng doesn’t admit it, and it gives people the feeling that the landlord is raising the price. The landlord said that the benefits all go to Li Yapeng, and they have become the scapegoats, becoming Mr. Dong Guo.

But no matter what, after Li Yapeng released this video, it aroused the sympathy and support of the vast number of netizens. Ma Weidu specially released a video saying he wanted to provide financial support, and Chen Guangbiao also came out to say he would donate money. You can imagine that with so many people calling out, a nationwide movement to rescue Li Yapeng was launched. Many people flocked to his tea-selling live streaming room, and it is said that he sold more than 10 million in a day. Then many people started donating money to Li Yapeng’s foundation.

Li Yapeng came out and said that the money from the Angel Smile Foundation can only be used for surgery and cannot be given to this hospital. The implication is that if you want to save our hospital, you have to donate money to the hospital. Then the hospital cooperated very well and announced its bank account on its WeChat public account. In a short time, the cause of saving Li Yapeng’s charity and saving Li Yapeng’s charity hospital became a nationwide movement.

3. Background Retrospective: Angel Smile Foundation and Children’s Hospital

So, should Li Yapeng’s hospital be saved? Let me give you the conclusion first: Li Yapeng’s Angel Smile Children’s Hospital is not worth saving at all.

Li Yapeng and his wife Faye Wong established the Angel Smile Foundation in 2006. Because their daughter was born with a congenital defect, a cleft lip and palate. Cleft lip and palate is a newborn defect, and the incidence of cleft lip and palate in Chinese children is one in seven hundred. Their child was sent to the United States for surgery, and the correction was very perfect. The couple invested one million to establish the foundation, hoping to save so many children in China. In the first year, I saw it was more than ten million, followed by twenty million, thirty million in donations.

In 2008, Li Yapeng had an idea. He said that it was not good to just let these children go to designated hospitals in various places for surgery. Because cleft lip and palate surgery is a sequence of treatments, it involves not only surgical correction, but also speech correction and psychological counseling. He wanted to build a specialized hospital for one-stop service. On the other hand, he also hoped that the establishment of this hospital could form a blood-making function, that is, the hospital itself could also make a profit.

So in 2008, they prepared to raise funds. This hospital was officially established in 2012 as a non-profit organization, and the money earned cannot be distributed.

4. Historical Doubts: Benefit Transfer and High Costs

Li Yapeng’s project was questioned in 2014.

• The first aspect: Before Li Yapeng established this hospital in Beijing, he cooperated with a private plastic surgery hospital “Yimeier” in Beijing. Reporter Zhou suspected that there was a benefit transfer relationship between Li Yapeng and Yimeier. Li Yapeng explained at the time that Yimeier was willing to give an 80% discount. But I checked, and it seems that Yimeier’s reputation is not very good, involving false advertising, and it has been fined many times by the market supervision department. In 2010, he wanted to establish Angel Smile Children’s Hospital, and Li Bin, the boss of Yimeier, came to work with him. At that time, the money was directly given to Yimeier. 9 million was given in 2010, and 7 million was given in 2011. I don’t quite understand why you have to give it to your cooperative partner when you are preparing a hospital?
• The second aspect: The surgery fees are ridiculously high. Reporter Zhou said that at the highest point, one surgery cost 99,000 yuan. Although this calculation method is not very rigorous, because there is a problem of fixed asset depreciation, it does show everyone that the cost of Angel Smile Children’s Hospital is not low. The Red Cross Foundation has allocated 60 million yuan to this hospital. Li Yapeng said in an interview that he spent more than 100 million, of which several shareholders invested 50 million, and social donations were more than 60 million. In short, this hospital spent more than 100 million, but it seems that who paid for it seems to be a muddled account.

5. Core Controversy: Far-fetched Reasons and Blood Loss of “Blood-Making”

There are two organizations under Li Yapeng’s name: one is the Angel Smile Foundation, which is responsible for fundraising, and the other is the Angel Smile Children’s Hospital.

• Regarding “sequence treatment”: Li Yapeng said that sequence treatment cannot be done without a specialized hospital. I consulted several doctors, and they all said that this reason is particularly far-fetched. Large public hospitals in China can completely do sequence treatment. Even if the hospital does not organize it, it is not difficult for you as a charity organization to contact designated hospitals to formulate a plan.
• Regarding “blood-making function”: Your hospital now cannot even earn back its own operating expenses, this is blood loss. Everyone should not think that this hospital is doing charity. You must understand that all the expenses for helping these children in this hospital come from the allocation of the Angel Smile Foundation. I calculated that the foundation allocates 8,000 yuan per case. It can definitely cover his costs.

6. Operating Status: High-end Clinics but Empty

This hospital has four floors in total. The third floor is the cleft lip and palate center, and the rest are the departments of stomatology, internal medicine, surgery, and dermatology. It is a high-end children’s hospital. The registration fee is quite expensive, between 100 and 300 yuan.

The main business of this hospital has little to do with cleft lip and palate. There are about 100 medical staff, and the outpatient volume is about 30,000 cases a year, of which cleft lip and palate surgeries are only a few hundred cases. An average of only 100 outpatients a day, 100 medical staff. What does this mean? It means that either the price is too high, and many people cannot afford it; or the medical skills are not recognized. In fact, the poor operation of this hospital itself has nothing to do with its charity. Even if the Angel Smile Foundation allocates money and receives social donations every year, this hospital cannot maintain normal operations.

7. Cost-Effectiveness Comparison: The Smile Train Model is More Efficient

There is also a cost-effectiveness ratio for charity foundations. The project supported by Li Yapeng shows that it is already 8,000 yuan per case, not including the sunk costs he has put into this hospital. If the rent and investment are converted, the cost of assistance is at least more than 20,000 yuan.

In contrast, the “Smile Train” project of the American Foundation:

• Has done a total of 400,000 cases in China.
• The cost worldwide has risen to 400 US dollars per case (about 3,000 RMB).
• The operating model is to cooperate with public and private hospitals across the country, and not to build its own hospitals.
• Not only subsidizes surgery, but also trains doctors. This method does not require you to be responsible for hospital operations, and it is also convenient for patients, who do not need to travel thousands of miles to Beijing.

So you can see how much the cost of each case of the Smile Train is, and how high the cost-effectiveness ratio is.

8. Financial Transparency: A Muddled Account That Cannot Be Calculated

I cannot find Li Yapeng’s financial statements, very, very few.

• Angel Smile Foundation: I only found the 2021 financial statements, which are very simple. Among them, 2.6 million was used for surgery, and the travel expenses for “Angel Smile Actions” across the country cost 1.3 million (accounting for 33%). Why organize doctors in Beijing to perform surgery in the mainland? It doesn’t make sense.
• Extremely low transparency: Although the law does not require projects to be disclosed, since it is a celebrity doing charity, higher requirements should be made. The audit found that he built a 5,000-square-meter hospital, and the decoration alone cost more than 27 million, which is more than 5,600 yuan per square meter.
• Angel Smile Children’s Hospital: 13 years after its establishment, there are no details of the total revenue, total expenditure, and personnel expenses in the financial statements. And the Smile Train can even be found in the US tax forms. You, Li Yapeng, have lost 26 million, have you really lost money? It’s all up to your word, Li Yapeng.

9. Summary: Charity and Business Must Be Clearly Delineated

It is a good thing for Li Yapeng to run a foundation, but doing good deeds must also comply with the rules of the charity world: pursue the greatest cost-effectiveness.

1. China is still a developing country, and sequence treatment can be achieved in the way that costs the least money.
2. The hospital must disclose its finances, and it must be clear whether the loss is public or private.
3. Since it cannot make blood, and due to poor management, it should be sold or closed. Why should everyone keep donating money?

Li Yapeng’s hospital, even if it is a non-profit organization, also distinguishes between charity projects and normal profit-making projects internally. If the information is not clear, then charity and business are a muddled account.

Don’t ignore supervision and don’t talk about the system just because you see someone doing good deeds. I solemnly appeal to everyone: donate money to the Smile Train or the China Women’s and Children’s Foundation. If you want to donate money to Li Yapeng’s foundation, you must think twice. As for his Angel Smile Children’s Hospital, I would say that the best outcome for him is to close down as soon as possible.