There was a complaint before the Central Information Commission (CIC) which raised serious issues regarding inflated price of implantations for various patients that the Employees State Insurance Corporation (ESIC) has referred to the empanelled private hospitals. In deciding the costs of the treatment at private empanelled hospitals/centres, ESIC generally follows the rates of Central Government Health Scheme (CGHS); in case where no CGHS rates are available, the cost of treatment at AIIMS is followed, and in case no rate is specified in either CGHS or AIIMS, the ESI rates are considered. In the rarest cases which are not listed either in CGHS or AIIMS or in ESI rate list, the outsourced empanelled “hospital rate minus a discount” is paid.
Pawan Saraswat in his complaint named four implantations of different cardiac devices, which are usually advised to the patients under reference from ESI Hospital, they are: Implantable cardioverter-defibrillator (ICD) single chamber; Implantable cardioverter-defibrillator (ICD) double chamber; CRT-P (Cardiac Resynchronization Therapy Devices with pacing); and CRT-D (Cardiac Resynchronization Therapy Devices with defibrillator).
He stated that the ESIC never showed concern to verify rates of these devices from any authentic source. The complainant further compared the rates paid by AIIMS and ESIC for these devices and the relevant portion of it as on the date of complainant’s application dated 11.12.2013 as given in the table below
The complainant alleged that the people’s hard earned money is being looted by inflating prices of these medical implants; that irregularity of referring the patients to private hospitals with inflated bills is only a tip of iceberg, resulting drain of huge resources of ESIC besides encouraging malpractices of over/unnecessary treatment of the patient. The complainant provided statistics in his complaint to the Director General, ESIC reproduced in the following manner:
i. 49 out of the said 54 ESIC establishments have sent their replies, out of which only 25 gave relevant information. It is to keep in mind that most of these replies were from the hospitals which have recently been upgraded as “Model Hospitals” and where such referrals and expanses have not still been used to dig in the funds of ESIC.
From the NCR Region – Only 3 ESIC establishments including DMD replied. DMD provided details only for the year 2013 and IGESI Hospital Jhilmil. Although provided information as was asked for, but even it had purposely hidden the amount paid for the devices in bills and differentiation among AICD-SC/DC & CRT-P/D.
ii. 24 PIO’s responded in irrelevant manner. From the NCR Region, 8 responded in irrelevant manner without providing information asked/desired by the applicant.
iii. 5 PIO’s did not respond at all till date, having no respect for the “law o f land” From the NCR Region-MS ESI Hospital, Basaidapur did not respond at all.
iv. It could be observed that from the NCR area, where the super speciality referrals expanse are known to be maximum, that most (i.e., nine out of twelve health facilities) had purposely hidden almost all the information.
v. It is evident that how much varied price is being paid for the same type of devices not only by the different ESIC health facilities but even the same health facility at different incidences. For the same type of device, ESIC health facilities are paying varied amounts (See table below)
vi. Even after providing the rates received from AIIMS to aforesaid ESIC health facilities/hospitals, no corrective action was taken by any of the aforesaid which is evident from the response to another RTI application filed by the applicant in this connection to seven NCR ESIC Hospital (after more than 45 days mail), wherein it was observed that the none of the above mentioned ESIC establishment/hospital, except the IGESI Hospital, Delhi tried to confirm the content of the attached rate list obtained from AIIMS by the app and all other 53 ESIC establishment/hospital, continued to approve/pay the inflated rate.
Corroborating the contentions of the complainant reputed doctors also say that these cardiac procedures are unwarranted in most of the cases. On June 25th 2015, a newspaper reported that only a small percentage of people really need them, it says: “Unnecessary cardiac procedures, both angioplasty and angiography, are a very serious problem in India. Often the blockage is not serious enough to warrant a surgery or even a stent.
Only a very small percentage of patients need an immediate procedure without which the person could drop dead. Doctors often scare the family so much that they agree to an immediate procedure,” said cardiac surgeon Dr Devi Shetty of Narayana Hrudayalaya. Senior cardiologist in Apollo Health City, Hyderabad, Dr Manoj Agarwal, felt that if a cardiac condition could be managed medically, no stent ought to be used. “If you use a stent when the blockage is not significant or if it is in a non-critical artery, that is misuse and unethical. But there is no monitoring in India. The onus of monitoring ought to be on the institutions or hospitals where the procedures are done”
Another news article on 20th May, 2015, called it the scandalous of price heap, and explained: “A study conducted over a period of six months by the Maharashtra Food and Drug Administration (FDA) has revealed a stent overpricing scam with details of how the life saving device is exorbitantly priced in seven hospitals in Mumbai, Pune and Nashik division.
The study under FDA Joint Commissioner Vigilance DM Phadtare has revealed that the MRP of the imported stents was inflated by 300 per cent to 700 per cent to the actual cost of import. The study said the company (the FDA did not reveal its identity) which imports cardiac stents makes an unbelievable profit of 120 per cent when they pass on the product to the distributors, the other partner in crime. The distributors make a profit of 125 per cent. And then the hospitals make a profit of 25 per cent on the stents, which, depending on the brand and type, range from Rs 20,000 to Rs 50,000. The FDA findings said by the time the device is implanted, a patient would have parted with anything between Rs 1.25 lakh to Rs 3 lakh.
The FDA has now recommended the National Pharmaceutical Pricing Authority (NPPA) to bring coronary stents under the ambit of National List of Essential Medicines to control its prices. FDA Commissioner Dr Harshadeep Kamble said the price could be “drastically brought down” if the Centre intervenes. “Cardiac stents have been categorized as drugs under the Drugs and Cosmetics Act, 1940, and therefore NPPA could issue directions to control its prices,” said Dr Kamble.”
The question is why the ESIC refers thousands or lakhs of patients to private hospitals knowing fully that they have to shell out 2.5 times the actual price under the CGHS. “The government/ESIC reimburses the inflated costs of the implants/devices as and when the empanelled private hospitals are referred by the ESIC,” CIC said in Saswat v PIO ESIC case in May 2017.
The ESIC should have complained to the health ministry or Union government about inflation of prices. Instead, it facilitated it for years continuously leading to unjust enrichment by the private hospitals and stent makers probably with kickbacks to other key players. Hence there is a huge public interest. Private hospitals are exploiting this ambiguity, which is sustained by vested commercial interests of corporate medical industry, unethical doctors and deliberate silence by the regulators. This could be mass violation of consumer rights making the ESIC a conduit. Transparency alone can tackle this issue and help prevention of the huge scams in this front.