Collusion among Health Service Providers in India Need for Regulatory Enforcement

1. Collusion among Health Service Providers in IndiaNeed for Regulatory Enforcement PRESENTATION ON BACKGROUND AND DRAFT PROJECT METHODOLOGY

2. Presentation: Objectives and Outline • Obtain the feedback of those present for fine tuning the proposed project methodology • Through suggestions identify hitherto unidentified key stakeholders whose cooperation would be useful in meeting project objectives • Outline • Background • Project Rationale and Objectives • Research Methodology • Advocacy Methodology

3. Background • Despite constitutional commitments, access to health care remains a problem in terms of both quality and affordability • Health services allegedly the most corrupt service sector • Collusion among and within various classes of providers • Cartelisation • Vertical arrangements • Consumption decision is not in the hands of the consumer: unique property of health sector promotes collusion • Welfare impact of such collusion • High prices: lack of affordability of health care or decrease in magnitude of other essential expenditures -- adverse impact on wellbeing • Adverse impact on quality/ appropriateness of health services: impact on productivity • Thus, productivity, productive capacity of the economy, and economic growth is adversely affected

4. Background: Types of Collusion • Collusion between doctors and hospitals • Caesarian rates higher than that justifiable on biological grounds ( 80 percent versus 10-15 percent) • Collusion between pharmaceutical firms and doctors through incentives provided by the former • Alleged fuelling of misdiagnosis of Attention Deficit Disorder by a pharmaceutical major for creation of a market niche for its drug • Extensive evidence of travel and hospitality of doctors being financed by pharmaceutical firms • Collusion between doctors and diagnostic laboratories and among doctors • Over eagerness to recommend MRIs on the basis of headache type symptoms, evidently because of attractive commissions on offer • Referrals by a general physician of diverse cases to the same specialist because of a fee sharing arrangement • Collusion between pharmaceutical firms and chemists • Lucrative margins to chemists used to promote certain drugs over cheaper substitutes • Companies have shifted away from categories falling under the Drug Price Control Order so as to not be bound by caps on margins to retailers/wholesalers

5. Project Rationale and Objectives • Rationale: Need for generation of recognition among the government, media and regulators of healthcare services of the crucial linkages between collusion in this sector and the poor quality and affordability of healthcare • Objective: Stimulate remedial action in this regard by realising support from relevant organisations

6. Research Methodology • Collection of secondary data on collusion (from advertisements, notices, journal and magazine articles etc) and its analysis • Collection of primary data through surveys in two states –Chattisgarh and Assam • First stage • Elicit data on expenditures required for various kinds of medical treatment, household incomes, and consumer perceptions about accessibility to healthcare • Collect information from consumers (patients) about ailments treated, medicines prescribed for these, length of treatment etc • Use above information for evaluating ease of access to medical services and their quality • Second Stage • Use evaluation in the first stage to identify regions characterised by poor quality and affordability of healthcare • Carry out surveys in these ‘suspect regions’ to identify collusion among and within important sets of players: collect information regarding prescriptions to detect allegiance to pharmaceutical companies/pathological laboratories; charges by physicians and hospitals in the same region to detect collusion etc

7. Research Methodology (2) • Analysis of data collected through surveys to identify collusive practices and their geographical incidence • Preparation of a Draft Report capturing the objective of the study, procedures used for data collection and analysis, and derived results and recommendations

8. Advocacy Methodology • Would leverage the results of research • Draft Report will be presented at a seminar of concerned stakeholders from the demand as well as supply side • Comments would be used to finalise the Draft Report • Final Report would be released in a workshop for print media, radio and television to highlight findings for wider dissemination and publicity • Workshops would be held • To share findings of the report with state chapters of the Indian Medical Association (IMA), officials of the relevant ministry, relevant regulators etc • Initiate a liasing arrangement through which IMA’s cooperation can be sought on a constant basis to discipline colluding players

9. Thank You Siddhartha Mitra Director (Research), CUTS sm2@cuts.org http://www.cuts-international.org