Patients pay a heavy price as India’s doctors continue with the corrupt ‘cut practice’

Psychiatrist Dr Shyam Shastri (name changed) routinely visits general medical practitioners near his clinics in South Mumbai to hand them envelopes of cash. Shastri, who has been struggling to establish his medical practice for the past three years, has finally decided to offers “cuts” to his colleagues from the fees that his patients pay him. By handing over these cash envelopes, Shastri has ensured that the general practitioners will recommend and refer his services to their patients.

The current rate of such commissions, Shastri said, is between 40% and 60%, which means that if a patient paid Rs 1,000 to Shastri, he will have to pay between Rs 400 and Rs 600 to the doctor who referred the patient to him.

“I never thought I will have to indulge in such unethical practice,” said Shastri. “This cut-practice is just like how somebody pays premiums to politicians for clearing a project.”

He hopes to be able to stop paying commissions once he has enough patients and a practice robust enough to pay his bills.

Shastri’s senior colleagues also say that they have had to offer incentives to other doctors, particularly general practitioners, at least once over their years of practice. A senior doctor who works with a well-known hospital in Mumbai said that at one point he was paying at least 10 doctors to refer patients to him.

“I had decided to never get into cut-practice,” he said. “But, my practice was so poor that my family asked me to do it.”

Eventually he established himself enough to be able to stopped paying cuts.

A decade ago, when Tamara Zweck, a sports and orthopaedic physiotherapist, shifted her practice to Mumbai from Australia, her well-wishers and patients told her to “connect with doctors” to improve her practice.

“For me, the patient comes first and I decided to rely on word of mouth instead of offering or taking cuts,” said Zweck. She added that fitness trainers, yoga teachers also accept cuts to refer patients to doctors.

Cardiac surgeon Dr Ramakant Panda from Mumbai has started a campaign with several doctors to end to cut-practice. Panda regularly comes across patients who are advised angioplasties – a procedure in which catheters are guided through narrowing arteries to widen them or remove plaque – when they do not really require one. He estimates that 30% of angioplasties performed are unnecessary. “[Doctors] are advising getting the procedure because they get cuts,” he said.

A network of agents

Several doctors hire public relations officers to work as agents. “These agents go to general practitioners introducing the doctor he works for and offer incentives for sending patients,” said Dr Jeevan Rajput, a neurosurgeon in Aurangabad.

When Rajput launched his private practice in Aurangabad four years ago, other doctors suggested that he hire a public relations officer and offer kickbacks in return for patient referrals. “I wanted to start my own hospital and initially it was tough as I didn’t even belong to a family of doctors,” he said.

Rajput decided to visit doctors personally and request them to send him patients for his skills. Some obliged, others did not. “Instead of offering kickbacks, I offered discounts to patients and never insisted on a deposit, which worked for me.” Some clinics ask patients to pay a certain amount as deposit upfront, even before treatment or hospitalisation.

Sometimes, an agent works for multiple doctors simultaneously, said Shastri. These agents either get paid monthly salaries or on the basis of the number of patients they bring in.

Shastri had also hired an agent for some time but later decided to approach doctors personally instead. “It is then that I realised that some doctors are ethical and don’t ask for kickbacks,” he said.

“Doctors cannot self-advertise,” said Dr Milind Balakrishnan, a psychiatrist and a member of the Association of Medical Consultants. “Young doctors have to rely on word of mouth and other doctors to send them patients.”

Doctors trying to establish their practice are given the impression that if they do not pay commissions, their practice will not survive. Moreover, corporate hospitals often set targets for doctors on how many patients they should treat and how many medical procedures they must perform in a given timeframe. If a doctor cannot achieve the targets, he could lose his affiliation with the hospital. Students of private medical colleges then pay donations that can range anywhere between Rs 30 lakh and Rs 1 crore, putting great pressure on them to start earning well early in their careers.

This combination of factors alarms doctors into paying commissions for referrals.

All-pervasive cut practice

In 2013, Dr Himmatrao Bawaskar, a senior medical professional from Mahad city in Maharashtra received an unsolicited cheque from a popular diagnostic chain asking him to refer patients who needed Magnetic Resonance Imaging or MRI scans to their laboratories. A shocked Bawaskar filed a complaint with the Maharashtra Medical Council against the diagnostic chain. The incident found mention in the international medical journal The Lancet bringing much needed attention to the corruption in medical practice in India.

Bawaskar blamed the cut-throat competition among doctors and laboratories for the culture of kickbacks. “If you own machinery worth crores, you will do anything to make money to pay for it,” he said, referring to the huge cost involved in setting up diagnostic centers especially those with MRI and computed tomography or CT scan facilities.

A senior doctor from Mumbai said: “[Independent] doctors are small fish in the pond. The real culprits are charitable and corporate hospitals who do organised corruption.”

In 2014, Kokilaben Dhirubhai Ambani Hospital was pulled up by the Maharashtra Medical Council for offering incentives to doctors for referrals to the hospital. A report in the Times of India, said that the hospital was offering doctors the chance to be a part of an “elite forum”. The doctors would be rewarded Rs 1 lakh for 40 admissions in a year, Rs 1.5 lakh for 50 admissions and Rs 2.5 lakh for 75 admissions.

Commenting on both Bawaskar’s case and the Kokilaben Dhirubhai Ambani Hospital case, Dr Sanjay Nagral wrote in Economic and Political Weekly: “In the current brouhaha, however, some novel points have emerged. The first, as illustrated by the Ambani hospital case, is that we are now poised to see sophisticated, structured, and even transparent forms of corruption where kickbacks are offered in the guise of well-designed schemes… In this, individual doctors working in such hospitals may actually be pawns in a larger game. Thus ‘underground’ corruption may change to ‘open’ corruption, even acquiring a certain transparency.”

Meanwhile, the surge in medical tourism is boosting the practice of referrals for commissions. “[Corporate] hospitals pay a large cut to private companies that are medical tourism agencies for bringing them patients,” said Dr Prince Surana who runs a private hospital in the eastern suburbs of Mumbai. “This is the newest form of cut-practice, where non-doctors are being paid for referring or bringing patients to the hospital.”

Another problem with referral fees is that it helps quack doctors. While most quacks charge a nominal patient fee, they rake in plenty of money from specialists who pay them for referrals. “There are quacks who only survive on referral fees by just referring patients to specialists,” said radiologist Dr Ramnath Ghute. A quack is a person pretending to have medical skills without undergoing any formal training in medicine.

More people now are looking online to find good doctors but commissions play a big role even on online healthcare appointment fora. Surana said that doctors usually have to buy a registration package with such fora to ensure that their names appear the top of the list of doctors during a search.

“I was surprised when I was told that I would have to pay an annual fee to be registered on the website,” he said. “Another service these platforms offer is that they give you the contact details of the patients who are searching and give you a lead by sharing the number with you first, so you can convert the patient before anyone else does.”

By “convert”, Surana is referring to turning a potential client into an actual one.

Patients pay the price

Rajput, who has studied the problem closely, estimates that at least 20% of head-injury patients do not reach the right hospital and doctor because of cut-practice. “Instead of referring to a hospital which is well equipped, we have seen that patients are sent to smaller hospitals because there is money involved,” he claimed.

In rural areas, Rajput observed, doctors also pay off ambulance drivers. “Many times patients, who might have been saved, die because they went to a wrong doctor or a hospital which is not equipped well enough,” he said.

Balakrishnan agrees. “The patient is actually paying for the cuts,” he said.

Cut-practice has eroded trust between doctors and patients. “My relatives call me to check which doctor they should go to because they fear that their general practitioner may send them to a not-so-good doctor just to get kickbacks,” said Balakrishnan.

The Maharashtra government has instituted a nine-member committee to draft legislation to end cut-practice. The Medical Council of India’s code of ethics clearly states that:

“A physician shall not give, solicit, or receive nor shall he offer to give solicit or receive, any gift, gratuity, commission or bonus in consideration of or return for the referring, recommending or procuring of any patient for medical, surgical or other treatment. A physician shall not directly or indirectly, participate in or be a party to act of division, transference, assignment, subordination, rebating, splitting or refunding of any fee for medical, surgical or other treatment.”

— Code of Ethics Regulations, Medical Council of India

However, a law can make the act of giving or offering a commission a criminal offence. “The committee is looking at recommending a legislation which can stop cut-practice, which is practiced under different names such as ‘split fee’ and ‘sharing fee’,” said Dr Avinash Supe, director of major civic hospitals in Mumbai and member of the committee.

Supe said that the committee is closely studying laws in the United States and United Kingdom that have already made cut-practice a criminal offence. For instance, the anti-kickback statute in the US “includes fines of up to $25,000 per violation, felony conviction punishable by imprisonment up to five years, or both, as well as possible exclusion from participation in Federal Healthcare Programs.”

Such legislation will go a long way in protecting patients’ interests. As Balakrishnan said: “In medicine, the patient should be the brand ambassador (for the doctor).”