Thursday, June 26, 2014

Regulating doctor’s fees and hospital prices

There has been a lot of hue and cry about the Clinical Establishment Act. One of the hotly debated provisions of this law is the section which governs the fees which doctors and hospitals can charge. The law demands that doctors and hospitals publish and prominently display their rate card, so that patients know exactly how much they are going to have to pay for their medical treatment.

On first blush it appears that this section makes a lot of sense. After all, won't it encourage openness and transparency ? Isn't this good for everyone ?  Won't this curb overcharging ? Won't it stop doctors from taking fees under the table ?

Let's look at why the government wants to regulate medical fees . The government provides free medical care to poor citizens under a number of government health insurance schemes , and they need to know how much they have to budget for this. However, they find the lack of transparency in the medical fees frustrates their well-intentioned efforts.  This is exactly the same problem health insurers face as well. Because they have to pay for medical treatment , they need to know up front what the cost of treatment is going to be, so they can estimate how much to charge their customers .

However , a sore issue is the fact that hospitals will pad their bills when they find that they are going to be paid by an insurer. They overcharge , and hospitals will often markup the costs upto 3-4 times for what they would charge a patient who is paying out of his own pocket. Even worse, a lot of doctors indulge in fraud, and will bill the health insurers for fictitious patients and make-believe surgery, because they believe the health insurer has deep pockets and is a soft target.

Because of the moral hazard issue, most patients don't care , because it’s the health insurer who has to foot the bill. The problem of progressively increasing medical costs is getting out of control , which is why the government finds that it needs to crack down.

While I agree that it's a good idea to encourage openness and transparency , I also think this smacks of double standards . One criticism is that doctors charge too much . However, many lawyers will charge much more for just talking in court for 10 minutes, as compared to what a doctor does for doing a life saving heart operation which may take over 4 hours. In a capitalistic society, the price the doctor commands is set by the market , and as long as the patient is willing to pay what the doctor charges, it is an encroachment of an individual's autonomy to control this. If a patient feels the fees are too high, he can always find another doctor who charges less !

Sadly, the medical profession is a soft target and doctors make for easy whipping boys. They don’t have the unity to stand up for themselves. The law, on the other hand, is passed by lawyers, who do their best to protect their fellow-professionals ! These double standards are completely unfair, and if doctors and hospitals  are asked to put up a list of their fees, then lawyers and law firms should also be made to do so. The same set of standards need to be applied across all professions , and it's not fair that doctors and hospitals be singled out.

Another sore issue among regulators  is the fact that doctors and hospitals charge differential rates for the same procedure, depending upon whether the patient is admitted in the general ward or a deluxe room. This is a fact of life, and is true is most areas today. This is something we routinely see when we buy airline tickets. Not only will they charge much more for a first class ticket  ( even though from a functional point of view the plane takes all the passengers from point A to point B), they will often charge a hefty premium for exactly the same seat when the ticket is bought at the last minute, a practise called price discrimination.

If it’s fair for airlines to do this to  maximize their profits , I think it’s unfair to prevent doctors and hospitals from doing exactly the same. Why discriminate against doctors , just because they're defenseless ?


  1. Anonymous10:34 PM

    Although your argument appears rational, it still doesn't feel good. It is like, sometimes our brain says it is okay by analyzing rationally but heart knows certain things which brain cannot comprehend.

    Dr, I don't expect doctors to be next to God. I don't think they are
    messiahs who came to alleviate man kind suffering. Doctors are humans with
    desires like every other human. They need a wealthy life. But Dr, how will
    you compare an airline service with that of doctors ? You deal with a
    suffering human !

    And there is a difference between greediness and needing wealth for living a
    good life. Will you put a board saying I am a rich man's doctor, if you
    do not have money go and find a cheaper option ? Chosing to do IVF is not a life or death option. No one will die for the lack of a child. But there are some branches
    in medicine where moral strength and professional integrity should come in
    front of money. I have never seen any doctor begging on street or even
    having a sub-standard living. When a talented physician declines to do a
    life saving surgery for a person who lacks money, isn't it a big sin ? Is it
    even ethical ? This is what corporate hospitals do all the time or ? Dr,
    some people have to be altruistic in this world so that this world becomes a
    better place. If someone's aim is just money there are so many ways to earn
    it,why do they have to chose doctor profession ?

    Dr, my mom lives on my dad's pension. Many people come to her for help. She is not born to alleviate any suffering. All she has is a bit more money than she needs. She gives them to the poor and needy. If so, when a doctor who has enough knowledge to save a life won't they use it to alleviate suffering. I know that not every doctor is bad, there are bad
    apples in every profession. But shouldn't doctors strive to be a better human
    because of the education they received ? When a doctor lives in society
    where there are more poor than rich and if he uses his talents to serve only
    the rich, it is ofcourse a moral breakdown on his part. It just shows that
    he doesn't care for the meek people around him eventhough he has the power
    to do something. It just shows the lack of social responsibility.

    I don't know whether I am right, how I would feel when I am in a doctor's
    shoes. But I think if I have had the knowledge I would be happy to treat
    poor people even if I have no monetary profit. Even now we do our best to
    help people who are in need.

    1. Many doctors do treat poor patients free all the time. However, if they choose to do this of their own free will, that's fine ! It's unfair to force them to do this.

      And if they provide discounts to poor patients, why shouldn't they be free to charge rich patients more than their standard fees ?

      I guess what burns doctors up is the double standards which society uses them when comparing them with other professionals ( such as lawyers). No one expects lawyers to provide free services, so why should doctors be judged with a different yardstick ?

  2. Anonymous11:29 AM

    There is no law which forces a doctor or even corporate hospitals to provide free treatment. But if a doctor treats only the rich, is greedy for money, he is judged by the society in a not so good way. There is a very valid reason for it too. Every profession has a code of professional responsibility. Even lawyers have it too. Not only lawyers and doctors everyone has. As our society started to run behind money those ethical codes are no longer respected. You must ask your question like this : when no one respects their professional code, why does this society expects us to respect it ? This is because if you doctors accept or not, yours is a noble profession. You are much knowledgeable than the normal population and that is why you entered into medical school. You deal with healing the suffering of human body and mind. You are much sought of by the public. So you are expected to behave in a much responsible manner. That is why a doctor's lack of morality is met with hue and cry than that of an uneducated business man who doesn't respect his professional ethics. That is why the society has a different yardstick for judging a doctor's professional integrity and morality. For example, the society will have different expectation from a priest - he must not seek after worldly pleasures. Will you accept that when a priest argues that I am a human too, why do you set different standards for me ?

    I have a standard fee and I give concessions for poor people, this argument is valid. But if you say I will charge according to patients well - off status....can I ask you then, how will you know whether a patient is rich or not ?

  3. Anonymous12:03 PM

    The so called high moral standards that the society expects from doctors does not prevent them from getting sued and beaten up if something goes wrong. They don't get to jump queues.They don't get things at a lesser cost, like the army does. Lawyers, shopkeepers, and interior decorators can charge what they like. Not doctors. They are serving the poor. The shopkeeper who is charging rs200a kilo for fish is not. Why? The poor don't need fish? Or onions? Do you think that the rich need the law, the poor doesn't? Find a lawyer who charges rs 300 for court appearances.
    Now that's a good figure. Why don't we set rs 300 as fees across the board? For everyone. Lawyer, architect, interior designer, CA. Even I will probably afford an interior designer. And the poor will afford to file civil cases. And my daughters school, which charges 4500 a month (a good one) will charge rs 300. Great! All for it.

    1. Excellent points !

      The trouble is that society today treats doctors with a double set of standards .

      When they are needed to save a patient's life, they are supposed to be selfless . However, when they want to be paid for their long hours of hard work and effort, they are considered to be selfish !

      This is sheer hypocrisy !


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