Citizens' Issues
Disease care in India: A massive rip off!

It is distressing that the medical profession, once considered only next to godliness, has fallen victim to crass commercialism. It needs to be pulled out before it goes overboard and adds to the miseries of the common folks
A recent Sunday morning prime time TV talk show Satyamev Jayate (SMJ) has gone extremely well with the viewers across the country for the simple reason it rightly brought out wide into the open the blatant malpractices perpetrated by the health/disease care sector on India’s long suffering aam admi/aurat.  

Adding to all that was highlighted in Aamir Khan’s telecast and having read extensively the virulent responses on the internet, including that of the surgeon in the Seema Rai case, this write-up seeks to delve into other areas of misdemenours that are more rampant.

A recent Parliamentary Committee in a stinging report has flagged the unholy doctor-drug industry-regulator nexus. Suffice it to say that this was only touched on the fringes in SMJ. The malaise runs deeper. The admittedly guilty medical profession not wanting to concede the charges is certainly not amused and made noises threatening to sue the anchor. Nothing was heard thereafter. Possibly they’re afraid that more muck will hit them on their faces once they are required to appear in open courts of law for depositions to defend their transgressions!

The medical fraternity did not raise any hue and cry over the blockbuster Munnabhai MBBS’ merciless exposure of the medical education system and conditions in hospital wards. They conveniently chose to treat it as a casual spoof or a parody to be soon forgotten. On the contrary the single episode SMJ has really hit them hard like a bolt from the blue to come out crying foul!

On 10 July 2012, the Supreme Court expressing concerns over increasing incidents of arbitrary medical admissions has directed high courts to initiate contempt proceedings against authorities and direct action against erring personnel. A delayed effect of Munnabhai?
 The vicious circle of rip-off medical malpractices throwing medical ethics and caution to the winds begins with the general practitioners who refer their patients for a cut/kickbacks initially to a coterie of consultants who then insist that they get further investigations carried out only at specified diagnostics centres, pathological laboratories, x-ray clinics, MRI/Scan centres and ultimately to send them to hospitals/nursing homes in their exclusive loop where they stand to gain, perhaps much more than their normal income!

According to a study, the kickbacks for lab tests in South and Central Mumbai are 40%; in the high-end Bandra it goes as high as 60%. Friendly consultants, specialists and surgeons give the referring GPs 30%-40%, private nursing homes kickbacks as percentages of all charges including bed, nursing care, ICU and surgery. Tests that are not really needed but there to inflate bills and commissions are called sink tests for blood, urine and stools are thrown there.

Moderately unwell and anxious patients who not really suffering from any cardiac conditions are put under observation with saline drip and mild sedation to be sent home after three to four days of enforced observation with a massive bill for visiting doctors’ attendance, bed charges, ICU and food.

 ICU minus intensive care set ups are neighbourhood nursing homes run by a surgeon/physician-husband-and-gynae-wife team residing on the penthouse of the same building. They are ill equipped as they are manned by 10th standard failed nurses or ward boys. No in-house resident doctors but nurses doubling as receptionist change bandages, apply dressings, give injections and saline drips, performing ECGs and assist in operations and sit outside ICUs. When there is a real emergency the patient is rushed to the nearest public hospital. Cosmetic surgery misrepresented as facials, waxing, liposuction are ruling all advertisements.

Large high-end hospitals, though not admitting when asked, have in place strict quotas/targets for their consultants wherein they are compulsorily required to bring in fat revenues that includes consultation fees, investigations, procedures, surgeries and bed charges that are upgraded as all charges are directly linked with the room charges. Shortfall in quota fulfillment results in pink slips when the contract comes up for renewal.

The worse comes when the surgeon hurriedly wheels a patient from the ICU for an emergency life saving operation or ventilation support after obtaining signatures of the next-of-kin available under duress. It is very likely that the patient is already dead but the doctor returns to report that the patient died on the operation table. The OT, surgeon’s, anesthesiologist’s and bed charges have to be paid before the custody of the body is given.

A front page report in Mumbai-based DNA quotes the report by the International Federation of Health Plans, a network of health insurance players that hospitals inflate patients’ bills by compelling them to pay more than double or treble on products which they source at heavy discounts from manufacturers. Apart from bed charges, medicines and doctors’ charges, every other item are routinely billed at MRP when in fact they are procured at much lower prices in bulk at quantity discount. Bigger the hospital greater is the discount through bargaining power. Hospitals deliberately do not allow the patients to source the diapers from outside.

It is also observed that hospitals do not always adjust and refund the large sums that they collect as advance deposits—even for insurance cases ostensibly for disallowances. The handout of one of Mumbai’s leading hospitals Listing of Deposit & Charges has deposits ranging from a minimum of Rs18,000 and Rs45,000 at the lowest going up to Rs2,60,000 and Rs5,40,000 at the highest end. The hospitals go hammer and tongs to collect the billing amounts even going to the extent of holding up the release of bodies of deceased patients. They are expected to give credit on discharge by deducting in the final billing the unutilized consumables, which they simply don’t do.

Missionary hospitals conveniently claim that they are used “for the poor and needy” which again they don’t. Hospitals are known to harass the patients and their next of kin just to fob them off for refunds. Many coming from outside locations simply have to forgo their dues. When the hospitals have on record full contact details of the patients there is no reason why they on their own remit the credit balances. Legally this can be considered of unjust enrichment on the part of the hospitals at the cost of the disadvantaged patients and families who are already charged a bomb and now further harassed by withholding the balances which are said to run into lakhs of rupees.                        

I’ve had an occasion to personally monitor the case of a 36 year old computer hardware technician suffering from Bilateral Avascular Necrosis of the femoral head for which he was advised a metal on metal total hip replacement by a high-end hospital in central Mumbai. The estimate for one replacement surgery that was sought to enable collection of contributions from individuals and charities quoted “Rs1,40,000 in a Median Class i.e. general ward, Rs2,00,000 in a twin sharing and Rs2,60,000 in a single room. Additionally the cost of implant to Rs1,40,000.”  This amount has to be doubled when it came to both the hips. The implants were procured by the patient from the manufacturers J&J at a humanitarian cause concessional rate and provided to the hospital. Rs2,10,000 had to be deposited for the first surgery which was billed at Rs1,93,280.59. Though discharged on 21st November the balance of refund took place on 25th November. Fortunately, this patient resides in Mumbai.

It needs to be explained as to why should upcountry patients are required to wait for such a long time only to collect what is legitimately due to them. A fine print at the end of the bill reads—“If you have any queries, kindly contact the Billing Department within seven days. No queries will be entertained beyond this period”.  Surely the patients or their next of kin do not have to be medical expertise to go through the mumbo-jumbo of all that is listed in the many computerized papers to ascertain the veracity of the items billed.
Also with a nefarious role to play are insurance companies and their appointed Third Party Administrators (TPAs) manned by raw BAMS/LCEH grossly lacking adequate know-how to process health claims.

The medical fraternity is up in arms against the proposed National Commission for Human Resources for Health Bill, 2011 that seeks to supplant and kick in a drastic revamp of the dysfunctional Medical Council of India (MCI) that has always operated as an “Old Boys’ Club”. Among the shenanigans of the former MCI chief is the possession of assets far in excess to his known sources of income, all arising out of hefty bribes for grant of recognition of new medical colleges and post-graduate courses. This has evident from the fact that many of the colleges accorded MCI recognition do not deserve to exist as they still lack qualified faculty and bed strength. The government cannot distance itself and take a moral high ground given its own nominees are overwhelmingly represented on the MCI board.

The record of the Drugs Controller’s Office and the other health regulator the National Pharmaceutical Pricing Authority are equally dismal. The state medical councils that are expected to register medical malpractice and negligence complaints and prosecute the guilty are involved in internal election squabbles and court stays that have rendered them headless.

The MNC pharmaceutical companies in India are simply importing formulae by adopting dubious transfer pricing from their parent companies paying them hefty royalties. Here in India they undertake no original research to conform to Indian ground realities. Their spend is heavily only on drug promotion  by sponsoring incentive trips for doctors to exotic holiday destinations in the guise of medical conferences than on R&D. The Code for Pharmaceutical Marketing Practices is only on paper with no case of prosecution of any offender to date. There are no treatment guidelines, no periodic treatment audits and continuing medical education.  The ministry of health of the Government of India ought to bring in Prescription Audit a la Saudi Arabia where the pharma sales have been reported to have plunged by 40% in 1980 on its introduction.

 In a timely editorial in the reputed British Medical Journal issue of 19 July 2012 doi: 1136/bmj d/7234—“This feels like familiar territory. In his column this week Des Spence lists some of the transgressions that have resulted in massive fines for GlaxoSmithKline and other big pharma companies (doi:10.1136/bmj.e4825). They include suppression of data, excessive hospitality, expert panels paid bloated feels, disease mongering, payments to lobby groups and charities and omnipresent threats of litigation. He believes that the solution rests with doctors cleaning up their act.”    
According to an AP report from Trenton, NJ the British drug maker Glaxo SmithKline has been just been ordered to pay $3 billion in fines—$1 billion criminal fine and forfeiture including $956.81 million and forfeiture amount of $43.2 million and include non-monetary compliance commitments and certifications by the GSK US president and the entire board of directors and $2 billion to resolve civil claims and agree to be monitored by the government for five years to ensure due compliance with marketing and other rules. This is by far the largest healthcare fraud settlement in US history for criminal and civil violations for unapproved use of 10 drugs taken by millions of people essentially for kickbacks to doctors and the medicare system and downplaying known risks of certain drugs. The US Justice Department states that GSK Plc will plead guilty and pay criminal fine to misbranding anti-depressants Paxil (revenues $11.6 billion) and Wellbutrin ($5.9 billion), asthma drug Advair ($10.4 billion) for unapproved uses, failing to report for seven years safety problems with diabetes drug Avandia that was restricted in the US and banned in Europe after it was found in 2007 to sharply increase the risks of heart attacks and congestive heart failures.

GSK was also accused of overcharging the government-funded Mediaid programmes and paying kickbacks to doctors to prescribe several of its products including Flovent for asthma and Valtrex for herpes besides Lamictal and Zofran and Imitrex. Pfizer the world’s biggest pharma major with annual revenue of over $67 billion, last year had to shell out $2.3 billion to settle similar investigation employing illegal methods to push anti-arthritic pain killer Bextra as an all-purpose pain killer and also for Geodon, Zyvox and Lyrica.

Johnson & Johnson (J&J) has appealed against an Arkansas judge’s ruling to cough up $1.2 billion for off-label marketing of Risperdal, Medicaid fraud and paying kickbacks to nursing care provider Omnicare. Industry experts say that J&J is settling with the US Justice Department for $2.2 billion to avoid nationwide penalties that they expect could run into billions. Abbott Laboratories with turnover of $38.85 billion has agreed to settle all claims for $1.6 billion for aggressively pushing the anti-epilepsy block buster Depakote on elderly dementia patients to control agitation without any evidence.  In 2011 Merck agreed to pay up a fine of $950 million for selling Vioxx, a painkiller for four years before withdrawing it after leaving behind a trail of patients with heart seizures and strokes. Other marketing violations include Bristol-Myers Squibb $515 million for Ability Purdue $634.5 million for Oxycontin in 2007, Eli Lilly $1.4 billion for Zyprexa in 2009 and Novartis $422.5 million for Trileptal in 2010, Allergan $520million and AstraZenca in 2010 $520 million. (US DOJ, Taxpayers against Fraud and Media Reports.)          

This is in the USA where they settle fast just to pre-empt suits for larger amounts. The situation is no better in India but here Class Action suits are yet to catch on. Action needs to be initiated by advocacy groups as the pharma here industry has a powerful lobby and retains highly paid counsels to see them through. The British Medical Journal calls it—“and omnipresent threats of litigation.”   

The US Patient Protection & Affordable Care Act, also termed Obamacare mandates every US citizen to have health insurance and the state to mandatorily buy it for those unable to afford it come 2014. It recently got the imprimatur of the US Supreme Court. This Act also seeks to tame the rapaciousness and cupidity of insurers by reading them the riot act—mandating them to spend not less than 80% of premium collection on reimbursement of claims.  This needs to be replicated in India where social security health cover is almost nil.          

Caesarian deliveries, unwarranted hysterectomies, MRIs of the brain for routine headaches, associating simple anxiety with angina or cardiac conditions are all mis-diagnosis to extract unjustified gains from poor patients or from insurance claims, which ultimately result in premium hikes  for all—equally for the guilty and the innocent insureds who have preferred not to lodge fake claims.

 Over the years, in India large hospitals and teaching institutions were initially state sponsored and then came those set up by private individuals masquerading as not-for-profit charitable trusts. This accounts for the proliferation of capitation fee charging private medical colleges and attached hospitals. The latest trend of PPP in healthcare delivery is slowly gaining ground. The patients who are the ultimate consumers need to be suitably empowered. The decision making ability that is taken away from an ignorant patient needs to be restored by making available an avenue to seek a second opinion.

The medical profession has now ceased to be noble profession by becoming crass commercial business of daylight robbery by a bunch of politicians that need to be reined in also on how the doctors prescribe medicines and/or order tests and investigations. Today the healthcare sector has degenerated into a mafia working in collusion with the pharma industry and service providers.The ultimate burden of inappropriate and unnecessary procedures, tests, investigations, excessive and costly medication and prolonged hospitalization. India has a handful of doctors like Dr Binayak Sen, Prof Dr BM Hegde and Dr Prakash Amte who are ethically and socially well disposed. They are few and far between and it is these dedicated members of the medical fraternity along with other like-minded doctors who can be counted upon to pull out the medical profession that has touched new lows by seeking to impose untold suffering and misery across the nation, irrespective of caste, age or income.

The extent of moral degradation today has left no profession or vocation or for that matter any sphere of activity untouched. It is all the more distressing that the medical profession, once considered only next to godliness, has fallen victim to crass commercialism. It needs to be pulled out before it goes overboard and adds to the miseries of the common folks.  

(Nagesh Kini is a Mumbai based chartered accountant turned activist.)



anantha ramdas

5 years ago

Mr Kini's article made interesting reading and I would like to share a recent ex perience.

A staff member of a club that I visit daily has been given a highly expensive dose of medicine for his diabetes, costing some Rs 124 for 10 tablets, to be taken twice a day. I approached my personal doctor for advice, who suggested its equivalent, which cost some Rs 65 per 10 tablets, but he asked me to check with the drug stores if they can suggest a generic equivalent and which cost some Rs 35 for 10 tablets, roughly one fourth of the original "super-duper" special that the doctor had adviced him. Why does the doctor not recommend generic medicines as these would be definitely cheaper, rather than the branded counterparts?

Thanks, Mr Kini, for raising such an important issue.

sivaraman anant narayan

5 years ago

A few activist lawyers, who are well informed re Pharma legislation in India should seek the support of other public spirited activists to properly research the malpractices of big Indian and MNC pharma Cos and initiate class action in India. Only an adverse ,superior court pronouncements will tame the pharma mafia; hopefully leading to some penal legislation or even threat of business closures.Similarly advocacy of stringent action against medical profession malpractice should tame recalcitrant doctors, hospitals and diagnostic labs!

Petrol price hiked by 70 paise a litre from midnight

The price hike was necessitated as international rate for gasoline, against which domestic petrol prices are benchmarked, has risen from $106.93 a barrel at the time of last reduction to $111.59 per barrel

New Delhi: After two rounds of rate cuts last month, petrol price has been hiked by 70 paise per litre on firming international oil rates, reports PTI.

Petrol in Delhi will now cost Rs68.48 per litre compared to Rs 67.78 a litre earlier, state-owned oil companies announced.

The marginal hike in rate follows reductions last month—Rs2.02 per litre on 3rd June and Rs2.46 a litre on 29th June. The twin price cuts followed the massive Rs7.54 per litre increase in rates, the biggest in the history, effected in May.

The latest increase has been “necessitated due to increasing international oil prices and movement in rupee-dollar exchange rate,” Indian Oil Corporation, the nation’s largest fuel retailer, said in a statement.

Average price of the Indian basket of crude is $101.28 per barrel while international petrol price is $111.59 a barrel. The rupee-dollar exchange rate is around Rs55.36 to a dollar.

“At these levels, the oil companies are incurring losses of about Rs1.41 per litre on petrol sales in the domestic market. However, as the price movement is quite volatile, it has been decided that an increase of Rs0.70 per litre ...” it said.

In Mumbai, petrol price has raised by Rs0.88 to Rs74.24 per litre, while it will cost Rs73.61 a litre in Kolkata from today compared to Rs72.74 per litre earlier. Chennai saw a hike of Rs0.89 per litre in price to Rs73.16 a litre.

State-owned oil firms have now abandoned the practice of revising rates of petrol on 1st and 16th of every month and from now on will do so on a random date so as to deter petrol pump dealers building positions.

Petrol pumps at some places run dry as owners stop taking supplies from companies if a reduction in price is anticipated. Similarly, if an increase in rate is expected, pump dealers start hoarding supplies.

IOC said the three state-owned oil marketing firms are projected to lose a record Rs160,000 crore in revenue on sale of diesel, domestic LPG and kerosene, whose rates have not been revised in over a year now.

The price hike was necessitated as international rate for gasoline, against which domestic petrol prices are benchmarked, has risen from $106.93 a barrel at the time of last reduction to $111.59 per barrel.

Value of rupee against the US dollar has also been a big dampener. The rupee has devalued to Rs55.36 to a dollar from Rs54.96 to a dollar, making imports costlier.

IOC said the company had lost Rs1,053 crore during current fiscal on not being able to raise petrol rates in line with the cost in the first two months of current fiscal.

For industry (IOC plus Bharat Petroleum and Hindustan Petroleum) the loss comes to Rs2,323 crore on a commodity whose pricing was freed by the government in June 2010.

“In addition, oil marketing companies are suffering high level of revenue losses on the three sensitive petroleum products, namely diesel, kerosene and cooking gas (LPG),” IOC said in the statement.

Oil firms are losing Rs10.01 a litre on diesel, Rs27.20 per litre on kerosene and Rs319 per domestic LPG cylinder.

“At these rates, it is estimated that under-recovery (or revenue loss) on sale of sensitive products during 2012-13 shall be around Rs86,000 crore (for IOC) and Rs160,000 crore for the industry,” it added.


Hindustan Unilever reports robust results with 16% increase in net profit

Despite a challenging economic climate and high inflationary pressures, consumers seems to be spending more which has led to a strong performance from Hindustan Unilever

Fast moving consumer goods (FMCG) major, Hindustan Unilever (HUL) reported 14% increase in net sales to Rs6,378.77 crore for the quarter ended 30 June 2012 compared to the corresponding period last year. The company has been reporting steady sales numbers over the last few quarters despite challenging economic conditions. However, if the numbers are anything to go by, once again the consumers are spending money which is a healthy sign of consumer confidence. The company’s domestic consumer business grew 18.7%, led by 9% volume-led growth. The company’s home & personal care division grew by 20.6% while its foods business grew by 10.6%. The net profit for the quarter increased by 16% year-on-year (y-o-y) after considering exceptional items of Rs607.24 crore as well as restructuring cost of Rs2.55 crore.

The company reported its sales growth rate (14%) on par with its historic three-quarter y-o-y growth rate of 15%. Similarly, its operating profit was very robust, at 28% growth when compared to the three-quarter y-o-y growth rate of 30%. Given that the company has produced strong numbers in some of the most challenging times, its return on equity is massive, at 99%, while its valuations seems to be slightly ever expensive, with its market capitalisation quoting at almost 25 times its operating profit. This might seem expensive, but it is the premium that the company commands for steady performance.

Harish Manwani, chairman of Hindustan Unilever, commented, “We have delivered another quarter of strong volume-led growth with an improvement in margins. The environment continues to be challenging in terms of inflation and a general economic slowdown. In this context, we are implementing our strategy with even greater rigour and managing our business dynamically to remain competitive and cost efficient. We continue to drive innovation and execution to strengthen our core business while leading market development in the emerging categories.”

The company’s soaps and detergents division grew 24% which was led by strong performance of Surf and Rin brands. In the soap segment, Dove and Pears continued to drive the premium category while Lux accelerated category’s growth momentum. The Axe brand was extended with launch of the Axe Bar Soap. The segment contributes to nearly 50% of the revenues, which increased by five percentage points, y-o-y from last year.

Personal products, which include skincare and oral care, grew by 17%, led by double digit volume growth. Fair & Lovely, Ponds and Lakme grew well as did Dove shampoo. In the oral care segment, growth was stepped up to double digits. The Pepsodent Expert Protection range with advanced care benefits around whitening and sensitivity was launched towards the end of the quarter. Personal care segment contributes to nearly 29% of the revenues, which is more or less steady from previous year.

The beverages segment was led by strong growth in coffee, with Bru brand leading the premiumisation. Even the tea brands—Taj Mahal as well as Lipton Ice Tea grew well. Beverages chips in 10% of the company’s segment revenues.

Packaged foods grew by 17% driven by core segment. The growth in Kissan was led by volumes with ketchups posting its 11th consecutive quarter of double digit growth. Kwality Walls was helped by the summer and experienced one of the strongest quarters. Packaged foods is the smallest of the segments and makes up 6.76% of company’s segment topline.

Despite the positivity exhibited by the company, inflationary pressures continued with rupee depreciation while costs were managed dynamically through pricing and distribution. Higher competition also meant higher advertising & promotion spend, which increased by 160 basis percentage points to Ra187 crore for the quarter.


We are listening!

Solve the equation and enter in the Captcha field.

To continue

Sign Up or Sign In


To continue

Sign Up or Sign In



The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)