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Sunday, August 21, 2011

Kickbacks & unethical cut referral medical practice. An Anna Hazare Movement in healthcare desperately required.

Did you know that upto 50% of health costs can be reduced if patient goes to hospital directly, & not take referral from a Family Physician?

Sorry to say (and probably upsetting few of my industry colleagues), but the cut-practice is so ugly now that a majority of physicians now charge a referral fee upto 50% of patients bill from the treating hospital to refer a patient.

So what happens then?

This referral fee gets added to patients bill and rises the healthcare costs.


It is a well known fact that the EBITA's in healthcare is low. Ironically even with a huge bed deficit many hospitals and clinics struggle to attract a good productivity in the initial years. There are various reasons for that (will discuss that in detail in another blog soon). But the low productivity makes these providers desperate and succumb to cut practice.

One major reason for low productivity is that typically the patients rely a lot on the primary care physician (friendly neighborhood Doctor ) who has such an immense rapport with his patient that he is virtually a friend, mentor and guardian angel to them. So whatever this family doctor says is followed. So this family doctor now can dictate and channelize where (hospital/diagnostic center & even chemist) these patients would ultimately go!

The family physician (majority of them) have made this opportunity so ugly, that what could have been a patient friendly exercise to negotiate economical deals and quality for benefit of their loyal patients, has actually become a business to extort money from the hospitals and other healthcare providers & ultimately cheat the poorly informed patient. If the provider (hospital etc) does not succumb to pay the referral fees, the 'ethical hospital' is bad mouthed and the patient does not go to that hospital on fear of 'bad quality' as informed by his doctor.

This referral fee practice or popularly known as CUT (also mentioned as Cee Yoo Tee) is to the tune of 50% of patients total bill.

The referral fee has now become such a mindset & walk of life for the medical practitioners that even the specialists have started asking for referral fees. Many Orthopedic surgeons ask for a referral fee from a physiotherapist, an Anesthetist is asked to pay a preference fee by his surgeon, and many Chemists pay the local specialist a fixed monthly fee to keep on receiving patients from the busy practitioner for medicines.

Pharmaceutical companies are well known to buy cars, fund doctor's children's education and carry out an entire revamp of doctor's clinic to prescribe expensive branded drugs for which a cheaper generic is also available.

If the above is taken care of, the patients bill can reduce to the tune of 50%.

Even insurance companies bleed. They end up paying higher reimbursements to the patients/hospitals.

This needs to stop on urgent basis as patients don't realize that to cover the expense on cut practice, many hospitals and diagnostic centers end up conducting unwanted tests or even 'ghost tests' where a report is only generated without even running the tests.

Ekohealth (www.ekohealth.in) is a company which has started a very ambitious health savings program in India to counter the above mentioned evils of referral practice.

Ekohealth is striving to make the member patients more aware (with help of such blogs and newsletters) and encourage them to visit a specialist or a hospital directly without any references.

The patients are finally getting educated and Ekohealth wants to ignite this further so that they can 'engage with their doctor and healthcare provider better'.

This will not only help patient demand better rates, but ethical and quality treatment.

I know this is a very difficult task, but everything starts with a vision.

Do forward this post to as many people as possible and help educate patients to encourage them to make fearless and better informed decisions.

I hope the Anna movement transcends into healthcare too. 'Ekohealth' supports Annaji.