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Death and Despair: Fixing The Healthcare Industry in India

Director Cardiology, Fortis Escorts Hospital
Dec 29, 2017 1:13 PM 8 min read

Healthcare industry under attack

Fortis Hospital charges INR16L for 15 days of admission; Max wrongly declares the death of a premature baby; Negligence in BLK causes another death due to an induced infection; government suspends the license of Max Hospital Delhi! Union Minister threatens to shoot doctors saying ‘[doctors] should join the Naxals [and] we will shoot [them]!’


Such grim headlines have dominated India’s Healthcare space in the recent times. Authorities are taking harsh measures to crack down on the hospital industry and the medical community at large. Their draconian reactions are being termed as appropriate by some but knee-jerk by others. Where does the truth lie?


While media and citizens seek retribution, doctors assert that they are the victims of a broken system. Nevertheless, it will always be a challenge to take an absolutist view, especially when lines of morality cross hands with commercial and policy considerations.


Post-independence, a system of government dispensaries, primary and secondary healthcare centers, district hospitals and medical colleges was envisaged – forming the backbone of India’s healthcare industry. There were a few private practitioners, providing mainly out-patient services and charging a nominal fee. Medicine was widely expected to function as a “noble” profession – above commercial considerations, trusted and honoured.


Select government hospitals had tertiary care facilities: AIIMS in New Delhi (setup in 1956) and PGI in Chandigarh (1962) being two illustrious examples in the North. But how could a few super-specialty hospitals cater to the requirements of a nation of over 600 million people? Manned by experienced, highly skilled, but overworked doctors, these centers bore the significant burden of providing tertiary care to a vast section of society. They were swamped with patients, had massive waiting lists for procedures – often running into years! Patients continued to line up in the emergency rooms and OPDs; there were no alternatives. The time was ripe for private healthcare to step in.

Protesters lined up outside Max Hospital Delhi

Protesters lined up outside Max Hospital Delhi Source: DNA India

The wave of market reforms introduced in 1991 dramatically changed the patient treatment space. Earlier, non-government hospitals were solely run by not-for-profit trusts e.g. Escorts Heart Institute in Delhi. Post-reforms saw a slow rise in for-profit private (or corporate) hospitals, which mushroomed in the new millennium through the likes of Apollo, Fortis, Max, Medanta etc. in several cities across India. These big centers brought state-of-the-art facilities and equipment hitherto unknown in the Indian context and only heard of in major hospitals in the West.


Corporate hospitals were built lavishly like their counterparts in the West. They exuded comfort and competence; more importantly, they had excellent emergency care, which was deficient even in the best government hospitals. So, a shift began in the late nineties, when the affluent began visiting these centers instead of the gloomy environs of the district hospital. Gradually, government spending on Healthcare declined; equipment was hard to buy and harder still to maintain. With only a few under-equipped Government centers being available in smaller towns and villages, it is no wonder that private sector comprises c.74% of total Healthcare spend in our country, accounting for 74% of hospitals and 40% of beds, and responsible for most of our secondary and tertiary care requirements.


The result is that a large majority of citizens are constantly caught in a bind over seeking care in government hospitals with woefully inadequate infrastructure vs. corporate hospitals which are expensive. With less than 15% of the population covered by health insurance, including via government programs such as CGHS, ECHS etc. – the latter option obviously hurts.


This has put the burden of providing affordable care on corporate hospitals, both in the minds of patients and bizarrely of the government too, all the while, missing a glaring fact i.e. private Healthcare is a business venture, not a charitable one. Asking corporate hospitals to shell out free or subsidised treatment to the bulk of society, without any financial relief or incentives, is a tragic paradox in this paradigm.

Hospital Death and Despair: Fixing Indian Healthcare Industry And Corporate Hospitals In India

Any corporate hospital providing high-quality care and patient comfort – 24x7 – does it after incurring significant capital and operating expenses such as land, construction, equipment, manpower, water and electricity, housekeeping, F&B etc. Without any government discount, subsidy, or support, they need to recover their initial spend and achieve profitability to stay sustainable. Moreover, it is futile to compare packages of procedures in AIIMS or PGI with a corporate hospital; with the latter paying massive comprehensive maintenance contracts (CMCs) running into lakhs and crores each year, and having to replace equipment every 5-7 years.


The plight of the public, short of value options, is understandable. But a corporate hospital should not be expected to demonstrate much pricing leeway if they are compelled to operate from a purely commercial standpoint. The state needs to own up to its responsibility of providing good quality universal Healthcare by fixing an ecosystem which is clearly broken.


[Listen in from 43:25 onward to understand some systemic issues afflicting Indian healthcare which has led to recent episodes of violence against Doctors.]


But does that mean that the public is ignorant, and doctors and hospitals are completely innocent? Sadly, the answer is No. The bane of medical practice in India is kickbacks. The practice originated when private labs, especially radiology centers were being setup, but gradually spread to hospitals as well. Referees i.e. doctors who referred patients for admission and / or specific procedures were being incentivised through an elaborate system of unregulated and illegal commissions. Seen as an easy and essential route to success, this nexus thrives today in the private sector, in nursing homes as well in many corporate hospitals. Several courageous individuals have obviously managed to stay away and flourished with time but only through manifold efforts to build a personal reputation which exceeded their “losses”, both financial and relational, due to a lack of pliability. Many, not possessing such principles, fell easy prey.


For years, I have been thinking about why medical practitioners, with a value system aligned towards integrity and humanity upliftment, reduced their standards? Perhaps it is to compensate for an exorbitant education, a comfortable life (whatever that meant) or plain and simple human fallibility, which is true for any profession. Kickbacks was a seemingly benign supplementation of an otherwise capable doctor’s income. It enhanced their professional avenues and created a short-cut to one’s career progression. Some refused, others didn’t. No excuses.
Hospital Death and Despair: Fixing Indian Healthcare Industry And Corporate Hospitals In India

Coming to hospitals, the critical question is whether Healthcare in India is exorbitantly priced? The average consultation for a specialist in India is about 1/10th of that in the West. The average cost of procedures like laparoscopic cholecystectomy (gall bladder removal by a laparoscope), bypass surgery or coronary angioplasty is again 1/10th-1/20th of the price in the US. It is factually incorrect to assert that procedure pricing is disproportionate, at least in relative terms.


But ambiguous practices around pricing of drugs and consumables is rampant. It is depressing to note that the purchase price of these varies from one-half to one-fifth of the MRP, depending upon the product and the brand. That is where the corporates profit, not by inflating the number of syringes or gloves used, but by buying them cheap. However, a subtle differentiation is wanting: though the moral ground of this approach is shaky, there is still no element of illegality here.


Moreover, what is noteworthy is that consultants, who regularly face public and media’s ire in such cases receive a minor share (merely 5-8%) of the total bill. To beat it all; they are not the ones deciding the cost of procedures, room rents or billing cost of consumables. Yet, they are the face of hospitals; and society blames them for all that is wrong with the system.


Is the Healthcare Industry in India beyond redemption? We are looking at the cost and negative outcomes in individual cases, while ignoring the input costs and the positive results in most admitted patients. Doctors all over India are in shock over recent decisions; it appears that the need to fix guilt on someone has gained more importance than finding out what is wrong with the system itself.


We need to recognise the persistent dedication and commitment required by doctors, their humanity, and the input cost needed to build and run tertiary care hospitals. We also need to recognise that nearly a third of our population lives below the poverty line, and deserves basic universal Healthcare. The answer lies in making basic primary and some secondary level care easily accessible to all, and only the government can do that. Existing government infrastructure must be strengthened, and new units should be setup. Health insurance must be made mandatory – just as one cannot get a vehicle out of a showroom without insurance, a new-born shouldn’t be discharged without one. This will serve to help those who cannot afford private Healthcare, as well as decongest corporate hospitals in general.


If we wish corporate hospitals to do charitable work, they must be provided financial and operational incentives / discounts to setup much needed units and serve the ailing humanity. Doctors should be adequately remunerated for their professional services, and government doctors may be granted the option to practice by refusing their non-practice allowance (NPA). Government must supervise private Healthcare providers; the ratio of purchase price to MRP should be regulated. However, suspending the hospital license in India over an individual case is not reasonable.


Dr Barney Livingstone, the protagonist in Eric Segal’s ‘Doctors’ said, “We have turned doctors into gods and worship them by offering up our bodies and our souls - not to mention our worldly goods. And yet paradoxically, they are the most vulnerable of human beings…..because they are painfully aware that they cannot live upto our expectations, their anguish is unquantifiable intense. They have aptly been called ‘wounded healers.’ "


While judging doctors, it will do well to remember that this is very different from decision making in most other fields, like building a bridge, preparing educational curricula or deciding on a legal case. Even a murder accused is innocent until proven guilty. And a doctor is not a murderer; neither a consultant looking after a sick patient with dengue shock syndrome nor a neonatologist caring for a baby weighing under half a kilo.