I have been requested by a few friends who know the kind of work I did in the Indian Healthcare industry to put out some threads on the finances and what ails it. I am not a doctor, my expertise is in understanding money and technology. So watch this space

to know what I did here is my Linkedin https://www.linkedin.com/in/subbakrishna/

3/n
In India, the healthcare pyramid is a bizzare monster. WE have world class tertiary and quarternary hospitals with amazing talent and equipment. This is counterbalanced by a vast array ( mostly rural) primary, secondary and tertiary centers

It is interesting that at the primary and secondary stage its only the government, NGO and trust hospitals. Most private investment goes to urban/semiurban 3 to 7 star facilities with publicly held conglomerates.

The centers of Excellence still are in the public sector, AIIMS, JIPMER, PGI etc, equally good are the NGO/Trust setups like CMC, St Johns, Sankara Nethralaya, Aravind, LVPEI, VIIO etc. The Apollos, Fortis and the Max/Medantas of the world are not in the same league

There are multiple channels through which a hospital earns money. Surgical long stay, surgical day care, out patient, out patient procedure, pharmacy, ancillary services like physiotherapy, home nursing etc. This does not even count parking, catering, laundry...

some other ways are drug and implant endorsement, clinical trials, fees for fellowships and observerships, referral fees on referral to other/higher center, fees for conferences and medical education programs, implementation on government programs etc

the income streams are mainly patient direct pay, insurance pay, pay from government for schemes implemented, fees for conducting surgical and other training paid by companies, clinical trial fees, commissions/margins on sales, rental for subleased services

the main expenses that are known to everyone are salaries, infra expenses like power, water etc, direct patient attributable costs like implants, medicines, disposables, rent/lease, cost of finance( loans/OD etc), administrative and statutory costs...

other known costs are maintenance, sterility, consumables like oxygen, power backup, permits etc. However the big hole that no one pays attention to , just like the elephants' hidden teeth are the costs that no one acknowledges openly..

these include commission/"stay with us please" fees to star doctors and surgeons, settlements for negligence/out of court settlements with patients, bribes( a hospital needs between 18 to 40 permits, ripe for milking) and the biggest culprit of all "referral"

This referral fee is a racket of the highest order and of lowest ethics possible. Essentially think of small and medium hospitals as agents that try to fill up the bus (in this case for profit corporate and specialty hospitals). no one is out of this race

a physician/general practitioner in a large city or even a rural area has more chances of making untaxed/unaccounted money by simply referring cases for surgery/procedures/tests than actually collecting between 50 to 500 as consultation fees/

commissions are in the range of 10 to 50% of final bills, and its a circle of "honor among thieves". The patient reports back to the GP/family doctor. The larger hospitals think of the GP/family doctor/referring doctor as the golden goose and nurture him/her

This is where the smart MBA/marketing types come in. 5 star holiday, new car, cash- no problem. Think of the high roller agents for Vegas casinos, the marketing boys are just that for an corporate hospital. The more the bill, the higher the fee. Which leads us..

to the big questions, how does the hospital get that kind of money? or a lab? to pay the fees? You and me, my friend pay for it everytime we undergo any medical treatment at any corporate hospital. Next time, think of going to a NGO or trust hospital, better care, better people

Got to get some work done and sleep.. will keep this going later..bfn

This extends to all kinds of anomalies, Why patients from NE /Bengal/Bihar end up in corp hospitals in far off Chennai, Bangalore and Mumbai? There are literally agents, doctor/agents and even agencies that facilitate this. This even when the same could be treated locally

I often get asked "Oh if it was you or your mother would you go to a govt hospital?". Fair criticism, one that is turned into FUD( fear uncertainty and doubt) by the referral ecosystem. There in lies the sad saga of how we have screwed public health infra in this country