Hospitals face regulator ire over stents
Are price caps a long-term cure to the malady, asks Subir Roy
Will the price control of stents help patients and, if so, for how long before loopholes are found? Is price control the most efficient solution, asks SUBIR ROY
When the government brought cardiac stents under price control in mid-February, the first reaction of a veteran in the medical implants trade is, “It took them 20 years to act!”
He had begun in the 1980s as a part of the trade channel for pacemakers and got to see how many of the small time practices escalated in the ’90s with stents, sans the redeeming features.
Pacemakers sold in the ’60s were cheap and came in a single basic model. Competition was partly on price, which meant patients weren’t fleeced.
But there was another important differentiating factor between selling a pacemaker and a stent. Pacemakers needed to be calibrated while being implanted and serviced thereafter, the battery coming with lifetime warranty, replaceable free if the patient outlived the battery.
So there was an element of securing a long term relationship. Of course, there were “incentives” for the cardiologist who had to recommend a pacemaker, but they were not “obscene” and society being more hierarchical in those days, lower order people like operation theatre staff did not look for a share.
Stents came in the early ’90s and one key difference with pacemakers was that selling a stent was a one-shot affair. You sold a stent and walked off. There was no service or relationship element and no warranty.
Another key differentiator was technology. Stents have evolved. First off the block was bare metal stents which were crafted out of steel. These were followed by drug eluting stents and thereafter the bio-resorbable stents. There was no basic model for stents (the bare metal ones could not be so called) as there was for pacemakers and so no anchor that gave the product a benchmark.
Since a stent seller did not have to develop a longer term relationship with the cardiologist, he laid the most emphasis on “incentives”. When a competitor arrived with a me-too product in a particular technology, its representative had to offer greater “incentives”.
The problem with incentives is that they are like an infectious disease. When cath lab (catheterisation laboratory where imaging equipment scan coronary arteries under the supervision of noninvasive cardiologists) assistants and clerks in the accounts departments of private hospitals saw what was passed on to doctors, they started asking for a share too.
Today, all the players in the supply chain — manufacturer, importer, distributor, sub-distributor, cardiologist, cath lab assistant, accounts department clerk — have to be accommodated.
These are the building blocks that till the other day made up the enormous difference between the manufacturer’s selling price and what the patient paid the private hospital who paid the cardiologist.
More recently, larger private hospital chains have themselves become large procurers of stents, thus being able to negotiate bulk prices. This has certainly brought down prices for them, but not necessarily for patients.
The additional discount gave them a cushion to absorb other rising costs. But there is a catch here. Stents are needed in different sizes and numbers and often even as a patient is stretched out in the cath lab for an angiograph (exploratory examination) and the need for an angioplasty (insertion of stent) is diagnosed, it is immediately undertaken (provided he has the money) with the stent supplied by the distributor’s representative from his inventory.
A hospital going in for direct purchase has to create a similar inventory which has huge carrying costs. So direct purchase does help in cutting our supply chain layers but that does not really help the patient.
Rushing to take credit The price mark-up has been variously mentioned in the media but trade sources say that 400 per cent is not over the top and it can sometimes be more.
When prices come down sharply, there is a rush to take credit. The Bharatiya Janata Party has released a visual headlined, “Big relief to heart patients. Stent prices slashed up to 85 per cent.” The visual ends with the following: “Over 600,000 stents were estimated to have been used in India in 2016.”
If anybody actually deserves credit for this then it is advocate Birendar Sangwan who moved Delhi High Court in 2014, seeking price regulation for stents by including them in the National List of Essential Medicines. Initially, the government didn’t respond to the court order. Then a contempt of court petition was filed last July, followed up by another petition in December seeking a cap on stent prices. Hence the cap.
Before we go any further, it is necessary to consider the reasons offered by the medical fraternity for the high cost of stent implanting. One is that stents tend to cost a lot because the technology is still evolving, requiring continued high investment in R&D by manufacturers.
That can explain high manufacturers’ prices, not the differential between what manufacturers charge and patients pay. Private hospital managements are currently playing innocent. They say their charges are high as manufacturers’ prices are high. Let those come down, of course the patient will benefit, they say.
Barely any cardiologist will be willing to say upfront that, yes, this is the level of incentive he/she gets and that comes from the paying patients. Virtually every specialist worth his salt is associated with some kind of a non-profit organisation helping poor patients and sees himself as thereby doing his duty by society.
Where is then the issue of overcharging those who can pay? However, incentives offered by pharma companies and medical device makers are by now well documented. In the West, these are referred to as “coffee” money.
Will the price control help patients and if so for how long before loopholes are found? Is price control the most efficient solution? Will it lead to a lot of bureaucratic activity which will generate its own inefficiencies? Is there a most efficient pathway?
One point on which most healthcare stakeholders are clear is articulated by a private practitioner who plays an important role in a social entrepreneurship venture: “Be on the lookout for private hospitals trying to raise other charges to compensate for lower stent prices.”
There is ultimately a consensus on two long term solutions. One of them is to strengthen the public health services which the poor can avail so that they act as a sort of competition which private healthcare will have to heed while addressing the business at least from middle class customers.
Costs vary from state to state The current scenario for angioplasty for the poor is extremely varied between states. Foremost, there is the Rashtriya Swastha Bima Yojana under whose top-up model for senior citizens, ~ 45,000 for a single stent angioplasty and ~ 60,000 for a double stent procedure are indicated.
Overall, each state has a scheme under which a stent is available at a price fixed by the government and the procedure can be done in a government hospital.
In Delhi, a drug eluting stent costs ~22,500: the central government health service price. Kerala has an umbrella scheme called Karunya Benevolent Fund Scheme. It covers a range of procedures, including angioplasty, for those who are below the poverty line. The money for the fund comes from a lottery run by the state government. In Telengana there is the Arogya Sri insurance scheme for poor patients to undergo treatment in a hospital of their choice. Under it, ~60,000 is allowed for a procedure for a single stent implant and ~80,000 for a double implant.
In West Bengal, a poor person has to first apply to the local panchayat member to get himself certified as being below the poverty line. Then he has to apply for the sum allotted to the chief minister ’s relief fund. The overall reality is indicated by the last mentioned — there is a scheme but a lot of running round and paperwork often comes with it.
The second long term solution is to address the problem of an information gap that keeps apart patients in search of rational (those who go by the medical textbooks) and ethical doctors and simultaneously doctors who wish to practice ethically without giving commissions and cuts to ensure a supply of patients for themselves.
The book Dissenting Diagnosis by two doctors, Arun Gadre and Abhay Shukla (2016, Random House), suggests the formation of citizendoctor forums in cities to fight the negative spiral of gross commercialisation and promote a positive spiral by bridging the communication gap referred to above. It mentions the Hospital Guide Foundation, an NGO which refers patients to appropriate doctors. It also recommends that citizens, to improve their knowledge, visit www.sathicehat.org and www.privatehospitalswatch.org.
The doctor with a foot in two worlds quoted earlier describes his own experience 15 years ago. Then around 50, one day he began to feel uneasy, went in for an angiography and was advised angioplasty there and then. Having been forewarned, he sought time to think it over and consulted a cardiologist whom he trusted. On examination, he was told, “You have been overweight all your life and so your body has learned to live with the blockages that are visible but not critical. No need to do anything now.”
He still does not have a stent within him.
The price mark-up has been variously mentioned in the media but trade sources say that 400 per cent is not over the top and it can sometimes be more