Collusive behaviour in Healthcare and impact on consumers : evidences from Assam and Chhattisgarh

1. Collusive behaviour in Healthcare and impact on consumers: evidences from Assam and Chhattisgarh Rijit Sengupta CUTS International COHED National Policy Forum 24th May 2011

2. Outline of Presentation • Introduction • CUTS study findings • COHED project • Findings of the First Stage • Findings of the Second Stage • Conclusions & Way forward

3. I. INTRODUCTION Mamoni Das visits a public hospital in Guwahati, expecting quality treatment at affordable cost She is seen by a doctor and given a prescription containing a list of medicines Approaches public pharmacy, for free medicines Mamoni is informed that medicines written in the prescription are not available and has to get them from the private chemist, outside She buys the medicines with whatever little money she had come to the hospital with…

4. What did we find? 49% of the medicines that Mamoni Das and some of the other patients had to buy from private sources after visiting the public hospital were present in the Hospital Stock Register 9% of the medicines that were absent in the Hospital Stock Register had substitutes, that were present in the Stock WHY DID MAMONI HAVE TO BUY MEDICINES FROM PRIVATE CHEMISTS?

5. Possible Reasons? • Docs did not know the status of the medicines in the Hospital Stock Register, and suggested that ‘good quality/effective’ medicines be bought from outside • Mamoni Das was a victim of ‘collusive arrangements’ between various entities inside and outside the public hospital

6. What is Collusion/Collusive Practice? Collusion refers to combinations, conspiracies or agreements among sellers to raise or fix prices and to reduce output/supplies in order to increase profits (OECD, 2002) DID THE PLAYERS (in the public hospital Mamoni visited) ENTER INTO AGREEMENTS TO REDUCE SUPPLY OF MEDICINES through the public distribution channel?

7. A Grim Picture!

8. Competition Act 2002 of India The Competition Act 2002 of India prohibits ‘………enterprises or associations of enterprises (or persons or association of persons) from entering into any agreement in respect of production, supply, distribution, storage……..which has an appreciable adverse effect on competition’. Agreements having such effects on competition result in - determining purchase or sale prices; limiting or controlling production/supply/marketing/development/provision of services; geographical allocation of markets; and collusive bidding. Competition Commission of India is sufficiently empowered and should investigate if supply and distribution of medicines in these public hospitals have been restricted due to collusive agreements between various players

9. II.COHED Project Goal: Gather evidence of collusive practices and assess if some of them infringed the provisions of the India Competition Act 2002, or could be addressed through other regulatory instruments Objectives • To identify market malpracticesin healthcare in 2 states • To assess scope and effectiveness of the present regulatory system to deal with malpractices/collusion • To make recommendations for better regulatory outcomes • To spread awareness about these recommendations and lay the ground for their implementation

10. II.COHED Project (Contd.) • Research based Advocacy • States: Assam & Chhattisgarh • Partnership with local NGOs • Field-work and Data Analysis • 2-stage Survey - First Stage: Consumer Survey - Second Stage: Prescription analysis

11. III. FIRST STAGE: C onsumer Survey • 3 towns in each state • Public Hospitals • Consumer information - household expenditure on healthcare, behaviour of heathcare providers, availability of healthcare services, prices of such services, etc. • Findings: - Tendency of choosing private healthcare service (often to suit convenience and save time, etc.) existed - Common belief: simple correlation exists between cost of healthcare & its quality

12. III. FIRST STAGE: C onsumer Survey (Contd.) - In addition to greater consumer awareness, there is also a need for change in consumer’s attitude towards healthcare - Private healthcare suffers from high degree of variation and there is hardly any regulation to maintain a minimum standard - An extremely high frequency of referrals (to diagnostic clinics) combined with the prevalence of ‘cuts’ for referring doctors was noted • In spite of having received medical treatment at a public hospital, many consumers bought medicines from private sources WE DECIDED TO DIG DEEPER……….

13. IV. SECOND STAGE: Prescription Analysis • Same towns as the first stage • Prescriptions collected to assess cost of medicines, availability of medicines in public hospital, etc. • Common Findings - large number of respondents bought medicines from private sources - Non-availability of drugs in public hospital is not uncommon - Insistence by docs to buy drugs from outside - High degree of prevalence of ‘incompleteness of diagnosis’

14. Cost to Consumers & Availability of Medicines

15. Completeness of Diagnosis

16. IV. SECOND STAGE: Account of Medical Representatives • Three types of malpractices: - Reminders - Inducements - Cash payments and bribes • Innovative ways of ‘keeping track of sales’, for cash reimbursements

17. V. Conclusions & Way forward • Issues for Policy - Procurement and Distribution of medicines - Public display of hospital stock - Periodic scrutiny of Prescriptions - Identify and adopt state level good practices’ - Greater attention towards patients - Adoption of Clinical Establishment Act, 2010 in states

18. Conclusions & Way forward • Issues for Consumer Action - More careful in choosing provider(s) - Approach consumer forum for redressal - Raise demand for generic drugs - Demand discounts CUTS IS GOING TO TAKE THESE FORWARD IN THE STATES………..

19. Ending thoughts Endeavour to make Mamoni Das’s future visits to the public hospitals more pleasant and less costly!!

20. Thank You Email: rsg@cuts.org Cell:+91-9829285928