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Online Health Care Industry News : Helath Biz India : Article : Cut Practice - the Bane of Healthcare Industry

Cut Practice: the Bane of Healthcare Industry

By : Jayata Sharma from Health BIZ India Magazine

 

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Every developing country witnesses corruption, in mild or in its worst form. However, what is important is the quantum of corruption. Corruption leads to generation of black money i.e. parallel economy which slows down the country's growth. Out of 163 countries India has 74^th place in corruption and is moving upwards in ranking.

Indian healthcare too is not devoid of such evil. "Though medical professionals take the Hippocratic Oath, it is truly followed only by some and for others it is only a ceremony, never to practice. In addition, corrupt professionals feel that they need to reap the profits because they too have invested a huge sum for getting an entry into the profession of their choice," says Narendra Karkera, Director, HOSMAC India Pvt. Ltd.

There can be many forms of corruption, like a medical professional can do corrupt practice by taking cash money over and above the declared tariff; taking cuts from suppliers of drugs and consumables; taking cuts from laboratories like imaging, medical technology labs etc.; taking cash for false certification, etc. In this article, our focus shall be on Cut Practice, which has become more prevalent than ever in recent times.

Why the prevalence?
Industry experts cite many reasons as to why cut practice is becoming more prominent in the industry. The healthcare delivery sector is quite unorganised. The various levels of HC providers - quacks, GPs, cross practitioners, diagnostic centres, and specialists all are in the race to support the system and benefit themselves.

"Due to lack of access to modern branding techniques, promoters tend to find alternate means of enhancing there business. Cut practice is the easy way out. Firstly, they see others doing, secondly it is no rocket science to lure someone with a kick back in return of business. Doctors are already used to getting kick backs, thanks to pharma and surgical suppliers," says Vivek Shukla, Principal, Vivek Shukla & Associates.

Cut practice in the current scenario has become an integral component of healthcare delivery mechanism. In fact, many midsized non-corporate healthcare set-ups consider cut practice as their marketing strategy to increase the occupancy of their units and that ranges from 10-40 %. "The prevalence is lesser in corporate hospitals, who try to attract patients with their best medico professionals, medical infrastructure, transparent practices, better clinical outcome and patient and community education," says Dr. Biswendu Bardhan, a Healthcare Consultant.

Unfortunately, many doctors who start practice end up falling prey to the temptation of giving cuts and kickbacks to referring doctors. "They are so desperate for patients, that they are willing to stoop to any depth to allow them to make ends meet. They justify their approach by saying "everyone does it anyway"; and are worried that if they don't, they will starve," opines Dr. Aniruddha Malpani, Medical Director, HELP – Health Education Library for People.

However, this is a very short-sighted tactic, which might end up with disastrous results in the long run. Not only such practices reduce self-esteem because one is behaving unethically; it might also force a medical professional to do things he/she is ashamed of doing (for instance, unnecessary surgery, because the referring GP insists on it). In fact, one can devote the same energy more constructively to building direct referral channels to the patients, which is far more satisfying and rewarding in the long run.

Another reason for the prevalence of cut practice is that the GP feels that he is not getting adequate compensation as compared to a chemist/diagnostic/specialist/nursing home/hospital and therefore feels entitled to a cut in the fat fee that the patient forks out to the specialist. The nexus often results in unnecessary investigations and treatment. "Also, healthcare industry is pretty unregulated, as many non-allopathy doctors run clinics/nursing homes/hospitals with specialists on their panel. This is a win-win for the GP and the specialist and a lose-lose for the patient," says Anup Soans, Author & Program Director for Medical Reps & Pharma Front-line Managers at BroadSpektrum Healthcare.

The same is true of the diagnostic service providers - they cannot/need not advertise their services and get business from references and don't mind paying a 'marketing' fee for every reference. The patient is in pain and is unlikely to question the imposition of tests and referrals!

However, not all agree that the GP has to be blamed. Some industry experts say that corrupt practices are more prevalent with specialist and less with GPs because they are more bonded with the patients. "Today's patient likes to go to the specialist even for minor ailments because he feels he must get the best. In the process, he makes his treatment costly," avers Mr. Karkera. If the society starts recognising the family physician once again, then the cost of medicine would definitely be reduced.

Says Dr. Uma Nambiar, Zonal Director, Mumbai (Fortis Healthcare Ltd.) & CEO, SL Raheja (A Fortis Associate) Hospital, Mumbai, "Possibly, cut practice is looked upon as an easy method to gain a quick buck. Hard works always take longer to bear fruit but monetary practices such as 'cut practice' are perhaps considered a quick and easy path to success."

Not just India, even the US has borne the brunt of a menace like cut practice. In fact, the entire US healthcare system operates on the basis of kickbacks, which is why healthcare costs are the highest in the world and are continuing to spiral upwards. Overuse of health services happens more so due to the fee-for-service billing structure and over-reliance on unnecessary technology. Physician-to-physician referrals are a primary means of generating revenue on the basis for unnecessary care. Physician-owned hospitals are another mechanism. "Due to these structural mechanisms, physician incomes in the US are far higher than any other western nation, however without any real evidence of higher quality care or better outcomes," says Mikhail Elias, Process Architect at OpenHIO, NY.

The severe disadvantages of cut practice
There are major disadvantages to this system. For one, this system increases the cost to the patient. It also promotes malpractice, because family physicians often pressurise specialists to do surgery in order to maximise their revenue, which means that procedures are done, which are not always in the patient's best interests. Because this practice is hidden, it's never discussed openly, and this creates a lot of resentment amongst patients.

The fact that doctors indulge in giving kickbacks is an open secret - and hiding this reality creates a lot of suspicion in the patient's mind. "This is one of the major reasons patients do not trust their doctors, and why the reputation of entire medical profession has taken such a beating in recent years," says Dr. Malpani.

Doctors who give cuts do not realise how shortsighted this is. Not only does this cause them to lose their self-respect, it also causes them long-term financial harm because they end up gifting away over half their professional income to the referring doctor over their life time.

"Little does anyone realise that it is a no sum game. Sooner or later everyone gets in a competition to offer more and more to the referring party. Margins shrink. Quality suffers. In the end no one wins. Hospitals indulging in cut kick backs relinquish control of their business to the referring doctors," opines Mr. Shukla.

Yet another set back is that the healthcare cost has begun spiraling to include the share of the referrer. "At times, patients end up getting referred to the wrong healthcare provider and all the stake holders including the patients and the pharmaceutical companies are to be blamed for the same," says Dr. Bardhan.

Also, it's very difficult to place the finger on one particular link of the chain, since it is not documented and law needs evidence. Even though MCI has termed cut practice as unethical it is difficult to prove it, hence it thrives and is increasing. "We should not forget that patients are also equally responsible for this evil. If patients refuse to pay, no one can force them to. It is the fear of death that makes patients fall prey to such demands. This cancer of corruption has not spared MCI too and when its president was involved the government had to dissolve the MCI," avers Mr. Karkera.

Who is to be blame?
Industry experts opine that the government should give permission to open more medical colleges to cater the demand medical professional required as per the population. Creating a shortage leads to medical colleges taking advantage and they charge more for admission. At times, medical colleges auction the seats to the highest bidder and not necessarily on merit alone.

Doctors in turn who have paid high price for the education try to reap it from the patients. Patients come under pressure and agree to pay under the table to the doctor since it is question of life. "Once doctors have tasted unaccounted money, they then try to make more money from all the labs where they refer the patients or from the suppliers from whom they give business of drugs and consumables," says Mr. Karkera.

Therefore, who is culprit? Government, for not creating enough doctors or medical professionals? Medical colleges, for charging exorbitant money for education? Doctors, for over charging the patients? or The patients, for agreeing to pay to the doctor? All are, at some given point. The source begins with short supply for which the government is responsible which itself has corrupt politicians. Doctors are monitored for their ethical practice by the MCI. If a complaint is received, they have to do investigation and if found guilty, can cancel the license to practice. However, rarely do patients complain about unaccounted money asked by a doctor out of sheer fear of losing future treatment.

Dr. Nambiar thinks that the MCI has been lenient on this, "If the MCI had seriously promoted norms of ethical practice and ensured that entities like cut practice are not allowed to take root, we would not be discussing these today."

Where does the solution lie?
The key is openness and transparency. However, as multiple parties are guilty and involved in enhancing cut practice, it would take the involvement of all these people to put an end to this menace. Mr. Soans suggests that the way forward is to ensure that GPs get their due and patients get educated to become active participants in issues affecting their life and health. This, combined with regulations and active citizens' movement, will automatically pave the way to more ethical practice.

In addition, comparative effectiveness research and evidence-based clinical practice protocols are better means to ensure that physicians are rendering necessary and appropriate care. Hence, a more formal system of health insurance needs to be in place, which will automatically keep a check on inflated costs. This would also reduce the revenue cycle management for the hospitals on account of pending claims by TPAs. 

Dr. Malpani thinks that the internet is going to be a key enabler. It will allow doctors to reach out to patients directly, so that there is no need for greasing the palms of a middleman. "A website will force doctors to be open and patient-friendly – and will ensure that the doctor tells the truth, because you cannot lie on a website," he says. The source of patient referrals for most doctors has been other doctors, which is why cuts and kickbacks have flourished.

Corporatisation of healthcare industry has tried to slow down the trend by encouraging better, clear and transparent practices along with education of patients and community. However, a lot needs to be done.

"Indian health system planners could learn a lot by analysing the problems confronting the US healthcare system. It would make a lot of sense to leapfrog ahead and avoid replicating the same mistakes made over the last few decades in the US (much like skipping landlines and going straight to wireless)," says Elias.

Government involvement is equally necessary. In fact, some healthcare experts feel that as cut practice has become so much a part of the system that the government must think about giving it a legal status! "When we legitimise cut practice, the black money in circulation would go away and more taxes will be collected by the government for the value add by the intermediaries that can go on to build better public health infrastructure by the government. Secondly, the patient and his family would know the real price that he is paying for the services and what demand better services from them," says Kapil Khandelwal, Independent Director, Strategist, Advisor and Investor in Health, Education and Agri Sectors.

Also, government must think about legitimising marketing and advertising of medical services, as it will give information directly to the consumer (patients), hence cutting the role of middlemen, and subsequently cut practice.

"The MCI involvement in discouraging the practice needs to be active at various ends - streamlining the domain and territory of work for RMPs and thus specifying the roles of non-allopathic healthcare practitioners, setting mechanisms to check the practice amongst the referrals, organising the public healthcare delivery sector, and involving other allied stakeholders like pharmaceutical industry in curbing the practice," says Dr. Bardhan.

Compulsory health insurance like pan card has to be introduced. Insurance companies would pay the bill and would not encourage unaccounted money and would also ensure quality. "It is tragedy that in our country every car has a compulsory insurance but not humans," says Mr. Karkera.

All healthcare institutions should display that they do not encourage under the table payment and patients can complain if demanded. Unethical practice should be treated like a criminal offence and should attract rigorous imprisonment in addition to cancellation of license. Industry experts say that information should be given to Income Tax department of doctor asking for unaccounted money and should be black listed by the institution where they are attached.

Pharmaceutical industry comes under Cost Record Rules under section 209 (1) (d) of Companies Act. There is a mechanism of cost-based price control system hence India is globally recognised as a generic capital of the world for its high quality affordable drugs. Similarly, healthcare service being of infrastructure importance should be brought under Cost Record Rules followed cost based price control system so that there can be uniform quality and MRP for various procedures, including the doctors charges.

There are many practical solutions to this issue, but what is most important is the "real implementation of these solutions at ground level". Is the healthcare industry only interested in discussing this topic or does it really wish to curb this menace? Only time can tell.