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Medical kickbacks thrive as pvt healthcare has patients in a pincer grasp

Early in February, Aniruddha Malpani, an in vitro fertility specialist and an active voice on medical ethics, stirred up a recurring and controversial topic. At an event, organised at Mumbai’s iconic Tata Memorial Hospital, he spoke boldly on a dubious and widespread practice that thrives under various names —from scuts for referrals” to “fee splitting” —but are essentially kickbacks and commissions that doctors accept in return for patient referrals to other doctors.

Addressing an audience comprising mostly doctors, Malpani minced no words about the deep-rooted malady that is constantly brushed under the rug. To drive home his point, he recalled another event where a professor posed a terse question to doctors: How many accept or give kickbacks? No voices were heard, no hands went up. He rephrased the query: How many knew of other doctors involved in kickbacks? The response was overwhelmingly in the affirmative.

Malpani’s explicit signal is at a perpetual vicious cycle that runs beneath the veneer of ethics, is hard to pin down, and even harder to weed out. “Everyone knows it is there,” he later told ET Prime.

The dirty tricks involve duping gullible patients as they are shunted from one clinic to another in the hope of treatment. In cahoots, a network of doctors connects from the stage a patient steps into the clinic of a general practitioner and is pushed through the elaborate chain of hospitals or independent specialists, diagnostic labs, and radiology clinics. In exchange, hefty cuts or commissions of up to half of the charges are passed on for each referral. If not money, inducement of similar value is on offer.

David Berger, a UK-trained general physician who was in India in 2012 volunteering his services, made a scathing comment on the practice of kickbacks in the country in an article published in the British Medical Journal in 2014. By coincidence, Berger witnessed how an envelope of cash was handed to a hospital for having sent patients for tests, which he said were “totally unnecessary”. In his words, “The country’s doctors and medical institutions live in an ‘unvirtuous circle’ of referral and kickbacks that poisons their integrity and destroys any chance of a trusting relationship with their patients.”

The grim reality remains unchanged as ET Prime found after interviewing eight doctors across India. A few others who were approached declined to participate in this story.

Making hay in the absence of penalties At best, the government has made half-hearted attempts to curb the “cut practice”, but even those eventually petered out.

In 2017, the issue came into sharp focus triggered by a controversial advertisement from Mumbai’s Asian Heart Institute that screamed “Honest opinion; no commission to doctors”, indicating others indulged in those dubious tricks. Following a public outcry, the Maharashtra government drafted the Prevention of Cut Practice in Healthcare Services Act.

Clauses in the draft reportedly had severe punitive provisions like authorising the Anti-Corruption Bureau to investigate charges of commissions or cuts in exchange for referrals to doctors. There was also a clause for imprisonment if proven guilty.

Doctors vehemently opposed the draft and under lobbying pressure, an expert committee was set up to review its content. As with anyvexatious bill, this one too was quietly consigned to dusty government cupboards, and big money continues to change hands among doctors, hospitals, and clinics.

An expert in infectious diseases told ET Prime how even as most doctors pushed boundaries to help patients over the past year of the pandemic, a few carried on with their unscrupulous ways. This doctor narrated an anecdote about a patient from Virar, Mumbai’s distant western suburb, who tested HIV positive.

The first physician sent the patient for tests and treatment to a hospital in Chembur. His follow-up tests could have been handled locally or somewhere closer,” the doctor said, hinting the move could be part of a “deal”. He, however, did not rule out that the Chembur hospital may genuinely be having visiting or full-time HIV subject experts. That’s where it becomes hard to put a finger on the violation of medical ethics.

Another doctor cited a case where a patient from a small town in Madhya Pradesh was sent all the way to a south Mumbai hospital. The patient was asked to repeat a battery of tests before the doctor could start a treatment. In any other situation, a patient could have been helped better had the doctor recommended a second opinion from a pathologist or radiologist to establish the accuracy of his first set of reports.

The effective cost of getting an expert to recheck the medical reports may be INR1,000 but in this case, the patient may have ended up shelling out INR10,000 to INR15,000 more, depending on the tests prescribed and the laboratory. Add to that, the costs of delay in getting the new reports and seeking the next available appointment with a doctor.

The rot has gone so deep that a senior marketing executive at a large pharmaceutical company says that in small towns, doctors or owners of clinics with a capacity of five to 10 beds and laboratory owners pass on cuts even to autorickshaw drivers who act as agents to bring patients from bus stations who arrive for treatment from areas in the vicinity.

The most alarming part of these rackets is that they are not one-off operations but an unwritten norm that trap thousands of gullible patients, who have to go through the ordeal in the hope of medical treatment.

Needed: an ethical and legal framework
Sanjay Nagral, a well-known surgeon based in Mumbai and co-author of Healers or Predators, a book on medical corruption, describes the “cut practice” as the manifestation of a highly market-driven and privatised healthcare system running unregulated.

“The over-arching picture is of a saturated and an extremely competitive healthcare environment. In a single hospital in a city like Mumbai, you may have 20 radiologists competing in the same space. No other country allows this,” Nagral noted during a panel discussion at the same event where Malpani spoke. “We (the medical community) are victims of a structural problem and that needs to be understood.”

Nagral added that in India, people invest large sums on medical education and setting up their practice. “For a person who comes from a family of limited means, or is a first-time earner, the model of making huge investments is where the problem starts,” he explains.

He believes Maharashtra’s move to make a law in 2017 was probably thwarted from within the medical community, as some may have been “complicit” in the kickbacks racket.

Pushpraj Bhatele, national president-elect of Indian Rathological and Imaging Association, agrees with Nagral, conceding that the issue of kickbacks has reached a dangerous proportion. He says his association plans to reach out to the government for concrete legislations to curb the practice. As for his own association, Bhatele claimed that Jabalpur, where he practices, is free from such corruption and no radiology unit pays commissions to hospitals to get patients.

Bhatele is in a tough position. His pitch banks on moral principles and he knows well that just a hard set of guidelines cannot solve the problem. His message to his fraternity is that no harm can be done to the members if they strictly follow a code of ethical conduct and desist from giving cuts to hospitals or other doctors. “We have to start living with dignity. We expect the government to come up with some level of prosecution so that the giver and the receiver are deterred (from dealing in kickbacks),” he tells ET Prime.

Bhatele says the current legal framework has made the situation worse, as tax laws indirectly support referrals as consultation charges. The cut money is transferred via cheques, providing legitimacy to what is essentially a corrupt practice.

Doctors who do not budge on compromise on medical ethics face a tough predicament. Kamal Kumar Mahawar, a surgeon who had plans to migrate to India from UK in 2014, ended up going back. But his retreat was not before he could chronicle his experiences in a book, The Ethical Doctor, which captured in great detail the bane of cut practice.

In an excerpt from the book, Mahawar says, “It is widely held that many doctors earn more from these bribes than from their transparent consultation fees. This, one would think, is absolutely scandalous in a country where millions are pushed into poverty each year simply as a result of expenditure on healthcare. Bribery and corruption have, sadly, come to define India, and it is clear that our doctors are no less prey to such moral decline.”

So, how does it work in the UK? Mahawar told ET Prime that besides clear anti-bribery laws that are followed very stringently in the UK, the general practitioners — the first point of medical advice —have a set of listed hospitals. The reference the doctor makes is part of a structured arrangement.

Malpani is of the view that doctors should build their own websites and start connecting directly with the patients. The idea is to build some level of exclusive relationships in educating the patients about the finer issues of healthcare. If doctors continue to follow a commoditised approach, they will end up being valued like a commodity.

Bad economics at the core
That is where the big question comes: Does cut practice really make doctors rich? Bhatele says providing cuts for referrals is self-defeating.

Contending that no radiology centre would stand to gain from such corrupt practices, Bhatele explained how the vicious cycle of poor economics ultimately harms the doctor’s practice as well as the patients in the long term.

  • After paying exorbitant fees in private colleges, a doctor or a group of doctors intending to set up her or his practice spends a fortune in importing a plethora of highly sophisticated lab equipment. A modern ultrasound machine may cost as much as INR60 lakh; an MRI machine may cost INRIO crore; a CT scanner maybe available at around INR4 crore. Add to all this, the cost of borrowing or loans, fixed expenses like rent, and staff overheads.
  • If this doctor pays a cut to a hospital to acquire patients — it may range from 20% to 50%— a big portion of his margin is eroded in one swoop.
  • Since the investments are enormous, the turnaround cycle stretches from 10 to 15 years even as the machine’s capacity is stretched to the maximum.
  • With imaging technology changing every five to six years, the machines become obsolete after 10-15 years of usage.
  • The doctor then finds it tough to invest in new equipment, thereby depriving patients of advanced diagnostics.

In Bhatele’s view, at least for radiologists, the pandemic has meant busy times, as patients queued up for CT scans. Therefore, the need to beg for a patient to hospitals or doctors was not an absolute necessity. In the case of pathologists, he says, the chances of over treatment and wasteful expenses for patients cannot be ruled out.

Bhatele believes that the medical profession stands on the twin pillars of acumen and faith. Doctors with good intentions maybe referring patients to other good doctors. But then, how many doctors put good intentions before moolah? ToI

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