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We need not remember dacoits and robbers when there are such Private Hospitals

Sunday July 1, 2018 2:29 PM, Dr Madabhushi Sridhar

Private Hospitals

In September 2014, a small lawyer Sangwan went to Metro Hospital in Faridabad, a suburb of Delhi. His friend’s brother needed a coronary stent — a wire mesh planted in an artery to open up blood flow — fitted into his heart. The hospital charged his friend more than Rs 1 lakh for this, without mentioning the device’s maximum retail price. “I asked the doctor to provide us with the purchase bill for the stent,” the lawyer said. “He refused.”

That refusal brought advocate to the centre of the storm sweeping through India’s Rs 6.7 lakh crore healthcare industry today. He filed a PIL in 2015 that made the Indian government crack the whip on the country’s Rs 3,300 crore coronary stent industry, ending years of rampant profiteering.

In India, at least 30 million people suffer from cardiovascular problems and over two million die of heart attacks and strokes each year. For them, stents have become essential. There are over 2,00,000 heart surgeries every year. This is a great demand that led to a racket of extraordinary proportions. Government data revealed that our hospitals are selling stents at margins of up to 654%.

On February 13, 2017, the National Pharmaceutical Pricing Authority (NPPA), the primary agency for fixing drug prices, notified a price cap of Rs 7,260 for bare metal stents (those without any coatings) and Rs 29,600 for modern drug eluting stents. The latter have a polymer coating, which gradually releases a drug to ensure that the blockage doesn’t reoccur. Till then the average retail price for a bare metal stent was Rs 45,000, while drug eluting stents were priced at around Rs 1.2 lakh.

NPPA said: “During deliberations, it was found that huge unethical markups are charged at each stage in the supply chain of coronary stents, resulting in irrational, restrictive, and exorbitant prices in a failed market system driven by information asymmetry between the patient and doctors, pushing patients to financial misery; and whereas under such extraordinary circumstances, there is an urgent necessity, in public interest, to fix the ceiling price of coronary stents to bring respite to patients.” If the authority itself asks for some other authority, what will happen to the poor patient?

In September 2014, lawyer Sangwan said that Metro Hospital bill was more than Rs 3.2 lakh. He filed a plea under the Right to Information Act to find out the number of hospitals in Delhi that performed angioplasty. He found 54 such hospitals and the rates of stents varied across the facilities.

To one of his RTI requests, the government said that stents came under the Drug and Cosmetic Act, but not covered under the National List of Essential Medicines (NLEM). This list identifies medicines that must be made affordable for citizens. He filed a PIL at the Delhi High Court in February 2015, to get stents included in NLEM. The High Court directed India’s Chemical and Fertilizers Ministry to take action.

It did not take any action for months. In a contempt petition he questioned the laxity of government in October 2015. Only in July 2016, the central government added stents in the NLEM. Sangwan had to file another PIL to limit maximum retail price of stents. The RTI plus PIL plus direction plus contempt threat made the government to place a cap on rates in February 2017.

Sangwan filed another RTI to know if stents came under the drugs or metal category in November 2014. Sangwan called it a brutality of doctors to say “the distributors, hospitals, and doctors are hand in glove with each other and they are the ones making the money. The product should come directly from the manufacturers to the patients.” (https://qz.com/915197/a-lawyer-took-on-indias-profiteering-hospitals-to-end-the-obscene-overpricing-of-cardiac-stents/)

Where does the problem lie? Just about 1% of the hospitals in the country are accredited, the rest flout norms and rules. Once accredited, the margins of bona fide healthcare service providers come under pressure because of the cost of following prescribed norms and putting in place the required systems. And with shrinking margins, hospitals come to increasingly rely on pharmacy sales, medical devices, and medical diagnostic testing.

The cap on stent pricing, therefore, will hit their balance sheets further, unless it is made up for by increasing the overall cost of cardiac procedures that use such devices.

If a heart patient knows the actual cost of the cardiac stent, he will realise how much the hospital looted him. He should be strong enough to withstand the shock. We don’t know how many suffered heart attack after knowing this exploitation. One small lawyer has to fight against this injustice. Where are the great doctors? Don’t they know this loot?

The National Pharmaceutical Pricing Authority recently reduced the price of drug eluting stents (DES) by about Rs 2,300. It may be just under Rs 28,000 now. The cap on bare metal stents increased from Rs 7,400 to Rs 7,660. These caps are excluding GST. On February 14, 2017, NPPA had capped the price of bare metal stents at Rs 7,400 and of DES at Rs 30,180, bringing down prices by as much as 85% in an effort to make angioplasty affordable. (https://timesofindia.indiatimes.com/india/cardiac-stent-price-cap-lowered-further-to-rs-28000/articleshow /62889521.cms) Do you know who protested? Hospitals! It is these ill-health shops that made unhealthily huge profits on stents alone. All patients should patiently believe that Surgeons do not know this stent racket. They don’t even protest.

Almost 95% of these DES are used in India. Downing prices are great news for them. The authority, which had received several complaints about overcharging on catheters, balloons and guide wires used for angioplasty, also made public its analysis of trade margins on these consumables which ranged from over 150% to 400% over import price.

But whether doctors and directors of the hospital companies are honestly transferring the benefit to the patients? Why this wisdom did not prevail on national authorities all these decades? Why the commercial cardiac centers were are allowed to make huge money?

The NPPA has asked for the price of catheters, balloons and guide wires to be mentioned separately in hospital bills. This is the transparency requirements. Patients should insist upon this. NPPA does not direct, the government does not prescribe penalties. It does not assure the people that their loss will be recovered and fraudsters will be punished.

After the cap on stent prices, hospitals had jacked up charges for catheters, balloons and guide wires, making these consumables more expensive than the stent, thus minimising the benefits of the price cap. The NPPA analysis of trade margins on these consumables has shown that the highest margin was on balloon catheter, where the MRP was on average 400% over the import price and 234% higher than the price to distributors.

The media reported about the tactics of commercial hospitals, saying: “Even as the NPPA sets into motion an examination of the price of consumables, which could lead to a price cap, hospital procedure charges continue to be jacked up by hospitals with widely varying charges being extracted from patients across India.” There is no law at present which allows the government to regulate these charges and for transparency about the pricing and quality.

All India Drug Action Network (AIDAN) issued a statement welcoming the price revision and asked for expansion of price cap to consumables as a necessary step to making procedures like angiography and angioplasty more affordable and accessible to patients. AIDAN also demanded that NPPA write to the Competition Commission of India to conduct an investigation on the large hospital chains for abusing their dominant position and overcharging for angioplasties post the price cap. There should be raids on these big shops to save the patients and expose the exploitation.

The prices of stents and their quality are the source of unethical scandals in both private and public sector in our country. There is very less information available about actual cost, taxes, and the selling price of the stents and similar other things that are placed in body for treatment of various ailments.

This is the darker side of the private hospitals in which the scams flourish and common patient is exploited very badly. None reveals actual price of a stent.

How about orthopaedic products, including those used in knee and hip replacement surgeries? What is the actual cost and the price the patient is paying? We need not remember the dacoits and robbers, as there are hospitals with roaring profits and doctors with roaring practice therein.

[Madabhushi Sridhar Acharyulu is an Indian academic and Central Information Commissioner. He was a Professor at Nalsar University of Law in Hyderabad. A recent article published by Hyderabad-based daily THE HANS INDIA, Jun 19,2018, is reproduced here on the occasion of Doctors’ Day, on July 1.]

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