A regulator for hospitals

Posted on August 10, 2010 | View 1674 | Comment : 43

To foster competition & cut costs.

Insurance companies are right to seek the government’s support to prevent hospitals from overcharging patients covered by health insurance. Hospitals do not come under regulatory purview, but their practice of inflating costs even for standard procedures is unacceptable and must end.

Intervention by the government is in order. India, though, should not go the US way, in which hospitals and health insurers prosper even as patients are burdened by huge healthcare costs. India has to develop its own model. The rudiments of one are already available in the high-volume, low-margin, standardised procedure-driven approach followed by the likes of Narayana Hrudayalaya and Arvind Netralaya.

A missing part is a regulator for hospitals, to ensure transparency in procedures and billing, ethical competition and portability of medical histories across hospitals and towns. Hospitals will not have an incentive to inflate costs if they also offer insurance services.

However, if their policies are tied to their own services, the result could well be sub-optimal. We also need more hospitals and urban space to build these hospitals. Unfortunately, land costs account for a large proportion of the total cost.
Increasing the supply of urban land is an urgent concern for all secondary and tertiary economic activity, including the provision of healthcare and education. Competition among hospitals will help lower costs. Insurers can bring costs down on the basis of volume discounts, as well.
Today, hospitals provide cashless hospitalisation to select groups of policyholders. However, many insurers are withdrawing the facility, as hospitals are not willing to accept the rates proposed by insurers. Insurance companies will be saddled with losses if their pricing is not commensurate with costs.

Hospitals will also lose their business to the ones on the preferred network of the insurers. And raising premiums will hurt consumers. A pragmatic solution is for hospitals to adopt low-cost models, and for a regulatory apparatus to enforce fair competition among hospitals.

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Comments (43)

  • Hospitals are charging more from the patient. But the salary for the doctors are more than a doctors it means 10 times more than a nurse. Being a nurse I am not at all overcharging from the pateint. But there is no justice towards NURSES in India. May be managireal level some hositals nurse's salary also high. Anyway there is no considerations for the nurses. This is very pathetic situation in India. Even accreditation hospitals like corporate set up they are not paying for the patient. I wonder how these people are getting accredited by QCI. This is only because of the MONEY. In India working hours are more for the nurses. When ever there is manpower is less nurse should manage to adjust the system. Please do something for the nurses. Nurses are going and working in the hotels to ...See More

    Posted by Elizabeth John Sen , nurse at x-columbiaasia staff | 17 Aug, 2010

  • Definetly insurance companies have taken a right step, due to this premium for mediclaim would be less. But they should also look into doctors viewpoint. Middle solution between insurance companies,doctors and government will benefit the whole system.

    Posted by Prashant Savla | 17 Aug, 2010

  • Considering that the hospital shows overexpense, the patients sign and audio visual record about the charged bill for the treatement will aware the pt. & the pt may not allow the doctor to overcharge.So awareness among the population will be a better solution to reduce overcharg.

    Posted by dr sd kalyankar , director & CRA at DRC HINGOLI (MS) INDIA | 15 Aug, 2010

  • One alternate solution to this issue which affects TPA, Patints and Hospital will be promotion of Day care ambulatory programme. there are approximately 200 surgeries can be done in day. care.....thus by doing this.....this is stay less pay less for patients....in such proceedures TPA and Hospitals will be at confirtable possition i.e. ALOS in hospital will be reduced, for TPA comparatively less payments....

    Posted by Sarika Kwatra,Business development Manager at Max Hospital, Pitampura|14 Aug, 2010

  • Every car manufacturer with dealer tie-ups, fix the labour schedules for urban,semi-urban,metro. This is also wetted
    with insurers and then implemented. In a similar way, this be done for hospitals. Further if people prefer Joslok or
    similar such hospitals, the proposal form should have a question for that. the premium chargeble for such optees
    should itself be on a different scale. It is time all insurers should form a committee with their Doctors(not vetenerians)
    formulate the rates and discuss with hospital committee(All india basis) and finalise in say 3 to 6 months max. A
    regulator is not necessary.

    Posted by balasubramanyam | 14 Aug, 2010

  • The TPA's were given the task of controlling run away rates by negotiating with Hospitals. They had to implement ICD 10 coding for ailments so that over a period of time and arrive procedures. However the TPA's did not have the authority to fix the rates. The TPA's instead only added one more layer and the cost started going up. The corporates insisted on certain hospitals and the insurance companies obliged inspite of knowling that these hospitals charge high. The TPA could not remove hospitals and this led to the failure of the other wise good system.

    Posted by sriharsha | 14 Aug, 2010

  • There is a need for the following :

    - Transparency and efficiency of processes and costs in hospitals, insurance providers & TPAs. Survival of The Fittest and Adaptable. Benefits will flow to patients.
    ...See More

    Posted by JPSingh , Management Consultant at Justplainandsimple Consulting Pvt. Ltd. | 14 Aug, 2010



  • I am strogly in favour of a regulatory authority for hospitals who treat patients through Medical mInsurance policies'

    Posted by Sudhir Kumar Sinha , Self Employed at NOne | 12 Aug, 2010

  • In my opinion the problem is multi-factorial. Since the hospital in which I would want to get admitted is not next to my door therefore I travel. And so does every citizen of this country. If we slightly shift our eyes and see why is all the development happening only in the metro cities whereas the smaller towns have grown not even a tenth of what the neighbouring metro has post independence. And this shortage of everything everywhere is what is being cashed everytime. Instead of targetting the policy holder who has been already paying an annual premium and still fearing and praying everyday that he should never happen to use his policy why not create a scenario in the country which builds confidence among its citizens, a confidence of personal security. Also as an added benifit this ...See More

    Posted by Dr. Gaurav Kharbanda , Consultant Dentist at National Heart Institute | 12 Aug, 2010

  • I strongly believe that hospitals do need a regulator to be in place.
    This will benchmark as well as standardize the minimum quality of services expected in any procedure done in any hospital.
    This will also bring in greater transparency into the system,. with only genuinely expended bills being generated by the hospital, and the Insurance companies too will have the satisfaction of controlled costs coming into the pricing system for any procedure.

    col svram

    Posted by shankar v ramany , National Head, Healthcare at CREMA | 12 Aug, 2010

  • I'm the end user . I working in hospital for last 9 years and on insurance domain for last four years, I ultimately come on conclusion that TPA' s are creating a mess by not controlling the price. TPA's want discount for timely payments from hospital. This discount neither benefited to patients ( nor) to insurance comapny. Insurance comapny give the float , the TPA's manuplate the money. For single payment hospital has to do a regular follow-up , despite this they delay in payment my making several excuses. I'm very sure that all the TPA's must have old outsatnding which always reflect the book of account. If any patinet undergo high end surger of Rs 2 lakh and hospital receive the payment after two years then what's the use of money. Hospital purchase the medecine, pay the salary etc. ...See More

    Posted by Nitin Kumar | 11 Aug, 2010

  • the other way is insurers should fix a limit of compensation for each type disease,eg for cataract 25k in muti speciality hospitals
    price of policy can be brought down by this tool

    Posted by jawahar saha | 11 Aug, 2010

  • we must not go the western ways where patient would rather suffer in silence then go through extensive procedures to establish diagnosis. To oversee patient care and health professional's over-prescription, regulator should be in place.

    Posted by Manoj | 11 Aug, 2010

  • With my rich experience 23 years in Pharmaceutical marketing, I am of the clear view that No regulate can find the frills in the Hospital Industry. No one can question the Diagnosis made by A Doctor unless a patient approaches any legal means.
    If a Patient is advised to under go a surgery or procedure, at most he can do is to go for a second opinion based on the report given by the 1st Doctor. Hence a Regulater can be appointed to randomly check all the samples, Reports from Lab, Radiologist ect. on the genuinety.
    Regulater is required to fix cast for all the procedures as different Hospitals charge different amount for the same procedure. An Insurance Co. can dictate an Institution not a common man.
    D C Ramesh,Mysore.

    Posted by Ramesh , GM Sales and Marketing at MARSUS PHARMA TeC | 11 Aug, 2010

  • Insurance Companies are bleeding due to overcharging the insured. Hospital delaying the discharge of patients who are having insurance cover. It is high time government intervene to regulate the operations of hospitals. Otherwise the whole benefit of cash less hospitalisation would become a dream of past.

    Posted by MURALI GOURISHANKAR | 11 Aug, 2010

  • To capitalise on someone's incapacitation sounds inhuman- But that is exactly what is happening right now in the 'health industry'! - jeyachandran-- A (RE) 'TIRED' SURGEON !

    Posted by Jeyachandran , Honorary Consultant at Smart mini Health centre | 11 Aug, 2010

  • For the bigger lot of our fellow country men the more pressing issue is not cost of health care. With uncontrolled price rise poor people do not have a square meal. You talk of hospitals charging ? Health is a fundamental right ! And it is in the hands of Government which is helpless. At least corporate hospitals are giving a standard medical cover. There are black sheep in every profession. They need to be targeted to control price rise. Tomatoes sold by farmers at Rs 2/- per kg are sold in the market at 40/- and no body rises a voice. And you see excess charge by those who invest huge amounts. In our country all controls fail and those with self control are useful for the society. Cost of treatment shall be varying with the visible/perceptible quality of treatment.

    Posted by Dr Nalam Seetaramji , Medical Superintendent at Mahanadi Coalfields Limited | 11 Aug, 2010

    By “Inflated charges” one gets the impression that the charges are not as per the declared schedule of charges, but higher, or unjustifiable or fraudulent charges. That is not only unethical but also a breach of trust and should be actionable as a criminal offence if proved to be so in a particular case. That may act as a good deterrent. However, if a hospital is charging as per a declared schedule of charges then it shouldn’t be objectionable just because the charges are higher than other hospitals.
    Hospitals set their rates on the basis of :
    ...See More

    Posted by Surinder Kumar Joshi | 11 Aug, 2010

  • i am totaly agreed that over charging by these hospitals,but why this is with only Individual claims,actually the cost has been raised by Corporates,who are going in tetiary care for noram procedure and even for fever and pain abdomen,the claim ratio is high due to Corporate even in some corporate claim ratio is more than 200% ,but insurance companies nebver take action against these corporates.my humble request to the concern is why dont we go for pacjakge rate for each and every procedure with respect to catagorisation of hospital as per their infrastructure,For BPL families GOI has established a package system same can be adopted for corporate and lets insured decide where to go for his/her treatment.no PPN

    Posted by Dr.Moin Khan , Head RSBY at Genins India TPA ltd.,worked for Raksha TPA and E-meditek as well | 11 Aug, 2010

  • @Dr Punam Singh - Respected Maam, as per your suggestion, the same problem will continue even then..If policy holder has been provided with every detail in the policy document and product broucher and still he says that nothing has been explained to him or he did'nt go through the entire technical term of the policy document..Dont you think the same thing will crop up even if the hospitals display there charges openly??? even then, there will be countless number of people saying a particular charge has never been explained to them or they did'nt see it in the first place...Actually, everybody - be it hospitals, doctors, policy holders, public at large - has to evolve and come out of the petty mindset..

    Posted by Dhawal Sharma , Area Manager at SMC Insurance Brokers | 11 Aug, 2010

  • Health Insurance is a loss making proposition. The same procedure costs different across hospitals and across cities & Towns. Its impossible to make a list of ailments and create a common tariff card. The problem escalates as the doctor's fee is variable depending on the hospital he/she is visiting.

    Posted by Sriharsha | 11 Aug, 2010

  • the basic problem is the fine print in the policy paper never read and never explained.More controlling figures means more corruption.Health is of utmost importance.Have a policy in the hospital in place and have a conscious Abide by the rules u set and employ a person to adress the greviances of the patients visiting ur hospital.make ur charges transparent and display them publically..........if Doctor devi can do it.........others can do it too.WHERE THERE IS A WILL THERE IS A WAY Dr.Punam

    Posted by dr.punam singh | 11 Aug, 2010

  • It is not so simple. Insurance companies for example demand that a surgery should cost exactly the same in Delhi, Mumbai or Nagpur, theoretically correct, but the land cost in a tier 2 city versus in a metro makes the cost of the same surgery different. People are crying because cashless service is gone but speak to the doctors and you will realize the corruption levels in TPA's. What happens when a claim is submitted? The insurance companies have onlt one agenda i.e. somehow do not give the patient his/her dues. What we therefore need is a system like "leapfrog" working in USA. It is an independent agency which gathers data from hospitals and publishes that on its website. It won't even consider looking at a hospital unless it is deemed "good" based on certain logical criteria. Those who ...See More

    Posted by shreedhar archik , Orhtopedic surgeon at self employed | 11 Aug, 2010

  • Being into marketing of pharmaceutical products I am aware of nuances of so called medicals providing facilities.Its nothing but a way to get benefitted no doubt it give employment to a lot of people.But for the poor patient its an over load .Like govt have DPCO for medicines can on similar lines fix some price for necessary surgeries or medical interventions but as products brought in DPCO has vanished from the market similarly the critically medical services may vanish if brough under restriction and the poor patient is only to suffer.So the solution is to increase quality govt hospitals with better remuneration to quality doctors and like other hospitals do the quality personnels may be brouoght on call by the CMO of hospital with premium price and be only is the solution thinking ...See More

    Posted by subhasis das , RSM at BSVL | 10 Aug, 2010

  • It is imperative that we need some sort of control and transparency to ensure that the patient gets his/her full due. Hospitals have a tendency to first ask if the patient has a Health policy ( Eg.Mediclaim) and if it is a yes, thats it. It is a complete rip off. There has to be regulator in place who can pitch in at the right moment and to serve as a support to the end user ( Patient). In an Healthcare enviornment, everyone seems to forget that they all work for the patient. It is the patient that pays everyone's salaries and helps Hospitals earn a profit. This does not mean the Hospital can charge whatever they like and get away with it.

    Posted by Ashwin Benegal | 10 Aug, 2010

  • Yes, seeing the present healthcare practices, we do need some kind of external audit mechanism but need to be very honest in their operations. Perhaps an autonomous body having an NGO kind of services or with the Lok Ayukta subsidary for every state may certainly be a vigilant force to contain the hopeless healthcare practices that are existing in countries like India. The Patient, being as ignorant as an illeterate, who always regards doctors and hospitals are like gods but today it is in a state of hopelessness. Healthcare , comparing to education system is more responsive and transparent but it is not so. For education system, we have Government appointed bodies , we may call as "Squad" to randomly check the examinination system. Why not we have similar kind of checks but without bias ...See More

    Posted by Akepati Kishore , Healthcare Consultant at RHS | 10 Aug, 2010

  • We should not impose everywhere strictures instead the 'show must go on' freely so that each agency involved in the insurance sector is comfortable which includes insured personnel also - K. Venugopalan

    Posted by venugopalan , Agent at United India Insurance Co. | 10 Aug, 2010

  • i am Dr.Manju Prakash, Prof of Forensic Medicine. i personally feel that a regulatory body will do more harm to the insurance industry and policy holders (insured) .
    1. instead insurance companies can conduct routine/ random checks by qualified doctors, while the clients are under treatment.
    2. fix up rates(annual contract rates) for services offered by hospitals that are acceptable for both the parties. like it is done with labs and doctors who provide MER services.

    Posted by Dr.Manju Prakash , Prof, Forensic Medicine at Medipalms Diagnostics, Bengaluru | 10 Aug, 2010

  • I am Gautam chawdhry from Ex-NISDian completing my PG Diploma in Integrated Geriatric in 2004, from esteem Institution of NISD,Delhi, Ministry of Social Justice and Empowerment. There are 1000 of Trainees in India at different centres of NISD and all are jobless due to ministry of social Justice and empowerment, who are not taking any responsibility about the ex-trainees of NISD which is in prospectus of the course of Old age care div. of NISD. They are not talking with me about this right of social security.

    Therefore, this my humble request to you plz. look after our case with your kind attention and plz. acknowledge me. I enclosed documents.

    Posted by Gautam Chawdhry , Geriatric care Manager(Neurorehab) at CARES | 10 Aug, 2010

  • Price control of drugs, devices (like stents) and other consumables is needed to make health care cost effective. Strict action if fraud or over charging is done by hospitals, drug manufacturers and device suppliers.

    Posted by Ripen | 10 Aug, 2010

  • Dear Sir, I am of the opinion that charges may differ among the hospitals & their services keeping ing what kind of services we are looking for ?It depends on the experience of particular Dr./Surgeon or in any field relates to the well being of human being .

    Posted by Parveen Kumar Chopra | 10 Aug, 2010

  • This is very important issue and thanks for raising it.These discussions help to develop intent in providers to deliver, and demand for service in consumers.
    There are two challenges in this issue,first a suitable model for heterogeneous(in demand and purchasing power)Indian population is difficult to develop. Certainly overcharging could be prevented by financial merger of insurance and health care provider but a very obvious problem of quality of service will emerge.This could be addressed by developing clear therapeutic guidelines ( they already exist) and their implementation,defining minimum acceptable service standards. The cost of establishment and consumables will be another challenge in this model,part of it possibly could be addressed by providing subsidized land to such ...See More

    Posted by Anurag Saxena,Intensivist at Sydney West Area Health Services|10 Aug, 2010

  • The recent news of vizag where a person admitted for a treatment of some small ailment was robbed his 2 kidneys and is in critical condition. last year there are reports that hospitals are a party for sale of human limbs in guntur and exported to Delhi at the cost of small rural farmer who is in debt trap.
    Today practically a average incomegroup person may not venture to enter a corporate hospital even at the cost of his life and practically there are no doctors for mild treatment like cold and general fever.
    where government is spending nearly 20-25 lacs on each medico and when he compleates he will be ready to ser ve US rather than in india .
    ...See More

    Posted by Satya Narayana Palukuru,Advocates & Mediators at Advocate , Hyderabad|10 Aug, 2010

  • The problem, no doubt, is very serious. But what exactly is the problem ? To understand the exact problem some hard facts need to be emphasized as under :
    1. Insurance companies misguide the public while giving them the mediclaim insurance cover. They keep them in the dark about the exclusion clauses and certain other fine prints in the terms. Many a times they take signatures on the blank proposal forms and do the 'needful' later.
    Their attitude at the time of claim is entirely different. Their one point task then is to find out some excuse to repudiate the claim. The excuses are somtimes very ridiculous and the attitude arrogant & dictatorial.
    ...See More

    Posted by promod kohli,consultant at artemis hospital|10 Aug, 2010

  • There is not much a big variation in price between hospitals for laboratory services however, the room rent, doctor / surgeon fee is different in different hospitals. To service any car (of any manufacturer) the service charges (in authorised service stations) are very much standardised. Similarly, the surgeon fee and basic room rent etc. must be standardised for various surgeries. Above all, government must bring in some legislation that will subject ALL hospitals to accept accident victims (even if they do not have any money to deposit upfront) for first-aid as well as emergency treatments / procedures to ensure prevention of untimely death. What for the third party insurance premium is paid by the vehicle owners ? Is government not responsible then ?

    Posted by Sridhar | 10 Aug, 2010

  • Look who's talking?Each Hospital has its economics and the rates are fixed in accordance to the services available.Insurance Companies get the PREMIUM...T.P.A. gets the SEED MONEY to pay to the Hospital and patient gets CASHLESS service.The patient takes the treatment and walks off,the T.P.A.'s don't pay for months.Its the HOSPITAL that suffers.The T.P.A. should take the tariff card when signing an MoU with the Hospital and check the bills.The rates that is being offered will only be able to get you treatment in a general ward!!!!!
    The problem has cropped up after service Tax was introduced from 1-7-2010,T.P.A.'s do not want to pay this.The Hospital's do not need any regulator but the T.P.A. needs one definitely.The T.P.A. wants discount on bills,to give a discount may be a hospital ...See More

    Posted by Dr | 10 Aug, 2010

  • .Regulatory commission should be in existence, for that govt. has to think seriously................... in long run this will be beneficial for all....

    Posted by Deepak Khurana,Manager Sales at Kotak Life Insurance|10 Aug, 2010

  • Health should be made a fundamental right and government should ensure that every citizen in the country gets a free healthcare facility. All hospitals, government or private, should be allocated annual budget by the government and all kind of treatments should be made available free of charge to everybody who walks in for any medical assistance. We do not need any insurance companies but a better health for all. At least to begin with government can cover all tax payers under some kind of social security system.

    Posted by Deepak Kumar | 10 Aug, 2010

  • It is based on the premise that all the hospitals all the time inflate the bills. Like medical negligience,it will be extremely difficult for any regulator to prove or disprove ssuch accusations.What can the so called Regualtor do more than what checks and balances available to the insurance companies? Let them use them more diligently and prudently.Adding another agency in the name of a Regulator is a sheer waste and will only complicate and drive the costs further up.

    Posted by Dr.Prabhakar G.V.J. | 10 Aug, 2010

  • Hospitals definitely needs regulators. Unlike in the west, the neither doctros nor hospital staff be clear with the patients or their attenders regarding the diagnosis, treatment options etc.

    Posted by lakshmi vishnu | 10 Aug, 2010

  • ha ha ha...such a bogey is raised only by PSU insurance companies like New India, Oriental, and National insurance..What about their own undoing of not conducting medical tests at the time of issue policies (resulting in majority of policies being issued to the people who already have serious illnesses) and secondly highlighting themselves as champions of the public at large by charging less premium. It is actually these attributes which have resulted in huge losses to them (Rs 900 Cr per annum, according to an estimate) and thus citing such a scenario. Is such a system or collusion on the part of Third parties and hospitals not going on for long and that too in full knowledge of their bosses?? i dont think so. Moreover, our government hospitals and their working condition as well their ...See More

    Posted by dhawal sharma , Area Manager at SMC Insurance Brokers | 10 Aug, 2010

  • Dear Sir,

    It is a great concern that hospitals over charge in almost cases speciallyin case cash less services and govt. must govern them.


    Posted by parveen kumar chopra | 10 Aug, 2010

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