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While doctors and hospitals are often labelled as commercial there is a need for introspection by patients, government, insurance and regulatory bodies to ensure that there is level playing field with provision for grievance redressal both for patients as well as the medical community.

Posted on: December 18, 2022

The Commercialization of Medical industry

Dr.Deepak Baid

Practicing since more than 25 years I wonder why the medical practice is not the same as the wonderful days of the past.
The trust of Patients , Governments, Insurance companies towards the medical Fraternity has reduced considerably.

The portrayal of doctors and hospitals as commercial and being a fraud is common.

Out of pocket expenses by patients often leads to violence.

What has lead to this downfall…?
For understanding the same we need to understand what has changed over time.?

Patient factor:

Patients have become customers. Window shopping for charges for surgery is common disregarding the seniority and experience of doctors.
Choice of doctors have often been guided by Rating reviews of the doctors. And those who actually review are the disgruntled patients.
Doctors become businessmen to avoid losing the patient to another doctor.

Movies often portray the medical community in poor light for TRP, often mis-guiding and creating doubts in the mind of patients.
News and media usually publish the negative aspects of the medical community thereby further tarnishing the image of the community as a whole.

Cashless and PPN Concept:

The advent of cashless facility to patients with the Preferred provider network concept led to divide and rule among hospitals. Insurance companies acted like the East India company. Hospitals were offered low rates with the lure of increased volume of patients. This brought commercialisation into the hospital industry like never before.
Hospitals which lost out from cashless facility increased their rates to break even due to a reduction in the number of patients. Those offering cashless services often resorted to unethical means to survive the abysmal low rates offered by the insurance companies.
The insurance companies took flat discounted rates from hospitals without considering the seniority of doctors nor the increase in cost due to advances in the medical field.
One could use an outdated non medicated stent on an insurance patient and at same time offer the best treatment by best doctors to the uninsured.
Salaried doctors in Corporate Hospitals and non professional owners of hospitals started treating patients to save cost.

Courts often stood with the Insurance companies, stating this as Market needs.
Insurance companies started demanding discounts over and above the already low rates of cashless. Their reasoning that the discounts are being forwarded to the patients was actually an attempt to decrease their claim ratio which still rose due to faulty policies


IRDA committee which comprised mostly of the insurance sector came up with a resolution to allow delisting of hospitals by insurance companies from even reimbursement claims without giving any reason. Arbitrarily delisting of hospitals led to a new era of maligning of hospitals and doctors by the Insurance sector.
The addition of quality parameters by IRDA such as NABH , as a pre requisitive for cashless empanelment further complicated the matter since even registered hospitals by Government bodies were suddenly found unqualified by IRDA without a NABH Certification done by a private agency. NABH inspectors had to be provided hotel stay and travel allowance by hospitals without any limitation or guidelines by the Agency.

The Lack of Government initiative :

The Government played a mute spectator while the insurance company played its role. They got involved with the insurance companies to deliver their flag ship programs like Ayushman Bharat. This lead to a lack of balance where the monitor became a part of the stake holders. Instead of creating competition among the insurance companies to deliver the Ayushman Bharat project , the government became a party with the Insurance company to deliver the services. The reimbursement of money to hospitals was done by the government instead of the insurance company leading to immense delay, loss of revenue to hospitals and poor acceptance by hospitals.

Lack of grievance redressal :

While there are ample recourses to the patients towards their grievance redressal, neither the insurance sector nor the IRDA, nor the Government has ever taken any initiative to address the issues faced by Doctors and Hospitals. There is no Ombudsman, No Consumer court, No IRDA or Government Grievance mechanism which left the health industry to cater to itself.

Political pressure:

Health became a vote bank policy for political parties. Asking for discounts for patients became the norm. Threats followed, for those who did not follow. Maligning of hospitals followed for charges even after a detailed bill was produced. There was no mechanism of grievance and hospitals were at the receiving ends.

The black sheep’s:

In this followed the greed and survival of hospitals and medical Fraternity. Having spent more than a crore of rupees on education, returns were expected.
With corporates running hospitals the compassionate touch was lost and the balance sheet took precedence. Targets were set for doctors to achieve by the corporates.
Then there were individual doctors who set out to earn in a short period.

Unfavorable environment:

Medical community has gone through changes which has lead to survival of the fittest, not necessary the best.
With the advent of laws and Acts like Consumer Protection act, Shop and establishment Act and nearly 30 plus licenses required to run hospitals, too many hands need to be greased to make ends meet.
So called RTI activist target hospitals in connivance with local ward officials.
The fire compliance suddenly saw nursing homes at the receiving end, to the extent that any fire in any area of the world resulted in backlash on nursing homes.

With every law and act came additional expenses which led to more loss of revenue to the hospitals. Hospitals are treated as commercial entity and pay commercial rates for maintainance, property tax, water tax, electricity etc but are expected to conduct themselves with the nobility of their profession when charges to patients are involved.

Often Hospitals overcharge to make up for losses because there is no system where unpaid bills of patients could be recovered.

Conclusion :

While doctors and hospitals are often labeled as commercial there is a need for introspection by patients, government, insurance and regulatory bodies to ensure that there is level playing field with provision for grievance redressal both for patients as well as the medical community.

Dr.Deepak Baid
Physician- Nulife Hospital
President: Association of Medical Consultants (AMC)
Secretary: AHPI Maharashtra- Goa

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