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Private radiology practice in India at the crossroads

For doctors, discussing medicine purely from the economic standpoint has been traditionally considered unethical. However, with the changing socio-economic and socio-political conditions, addressing the hard facts of medical economics has become imperative. It would be hypocritical not to do so. Indian healthcare largely depends upon private medical establishments. And private medical sector cannot work without a sound financial foundation. Private radiology practice in India, referred commonly to as diagnostic centres, stands at the crossroads of rapidly changing medical economics.

Dr Chandrashekhar A Sohoni
Dr Chandrashekhar A Sohoni

The practice of radiology in India as of today requires substantial capital investment primarily because of the expensive machinery and humongous real estate costs. Those who believe that radiologists are amongst the highest earning specialists in India also probably believe in the tooth fairy and Easter bunny. The return-on-investment in radiology practice is believed to be around 12-15%, which is nothing more than what mutual fund investments would earn. [1] It is also believed that most diagnostic centres earn just enough to pay back their loans. [1] With each passing day, the competition in the field of radiology is increasing sharply. It is generally true that market forces bring about correction in prices and lead of economic efficiency, which is beneficial for the consumer. While this is justified for most commodities and services, medical practice is not like any other ordinary service or commodity. Medical expertise cannot be treated like a commodity because of the level of seriousness of the work, the ethical responsibility and legal accountability that it incurs.

Over a period of time, most diagnostic centres acquire higher-end, expensive machines, not necessarily out of choice but many a time due to market pressures and competition. Once equated in machinery and services, reducing prices with a hope of making-up in volumes is thought to be a solution for surviving the competition. This belief has resulted in radiology services being offered for relatively same or even lower prices despite the steadily increasing investment cost over the years. While “low price – high volume” models have been used successfully to help certain businesses, there are some problems in applying this model to radiology practice:

• The cost of radiology machinery has not reduced substantially despite the technology being in place for so many years. In fact the monopoly of a few select multinational companies, the costs of advancement in technology and a depreciating rupee have not allowed the prices of radiology equipments to come down. On top of that, the maintenance contracts for radiology machines are exorbitant.

• Referring doctors and patients want a one-stop shop. Hence, most diagnostic centres need to be equipped with radiology as well as pathology set-up. This also means a bigger investment.

• Diagnostic centres require skilled and qualified manpower. With increasing inflation, maintenance of qualified manpower becomes more and more expensive. Discounted services make such maintenance difficult. The investment and maintenance cost of a diagnostic establishment in a tier I city is more than that in a tier II or tier III city; real estate cost and human resources being the prime determinants. However, the pricing of radiological services in these categorized cities is not proportionately variable. That is the reason radiological facilities are becoming increasingly difficult to manage in bigger cities. Such a scenario is extremely discouraging for an enthusiastic, entrant radiologist — entrepreneur with limited resources at his or her disposal.

• Radiology is a largely referral-based practice. Referral dependence also brings with it the obligation to oblige requests for discounts on radiological examinations, which sometimes border on the unreasonable. Referral dependence also means that diagnostic centres do not enjoy the same degree of patient loyalty as a nursing home or hospital.

• In the case of a medico-legal lawsuit in India, the financial compensation awarded to the aggrieved patient is not limited by the fees charged by the doctor, and hence it can be disproportionately high. [2] Since there is a trade-off between speed and accuracy, a radiologist runs the obvious risk of making diagnostic errors while targeting high patient volumes. Turn around time is a well-established parameter for assessment of the efficiency of radiology departments, and in-turn of the radiologists. [3] Radiologists are thus constantly under pressure to reduce the turnaround time. Whereas a clinician is generally perceived as being more dedicated and ethical if he gives more time to his patients, a radiologist is judged as inefficient if he gives more time to his patients! This paradox, however, does not seem odd to anyone, except perhaps the radiologist.

According to the United Nations’ Universal Declaration of Human Rights 1948, adequate healthcare is a right of every individual. So is housing and food. The cost of housing and food has kept up with inflation in much the same way healthcare costs have. However, disease and disability bring great suffering, and non-availability of adequate healthcare due to non-affordability raises a profound issue of social justice. This is particularly so because doctors are bound by an ethics code which compels them to alleviate human suffering irrespective of monetary returns. The problem of food and housing is equally grave; however, neither restaurant owners nor real estate developers have any encoded legal obligation to serve the non-affording class. Is it practical to expect healthcare costs to go down or stabilize while other costs skyrocket?

In the case of high investment – high maintenance ventures like radiology, hoping for a sustainable practice by reducing prices despite ever-increasing inflation is like, in the famous words of Winston Churchill, standing in a bucket trying to pull oneself up by the handle. When revenue pressure due to low pricing becomes central to radiology practice, diagnostic excellence is the ultimate sufferer. Compromising quality of patient care is not only unethical but also illegal. In the era of CPA (Consumer Protection Act), compromising on the quality of care is not an option anymore. Hence, while balancing cost against affordability, the legal accountability of doctors has to be taken into consideration. Medical ethics mandate that a doctor should treat a diseased person considerately as a ‘patient’ and not merely as a ‘customer’. However, the CPA allows a patient to sue a doctor just like any other ordinary service provider. In fact, the case of medical practice is unique in the sense that a doctor can be held liable under CPA despite providing free service to a patient! Even in developed countries, healthcare is an expensive affair primarily because of the higher fees charged by doctors. Better remuneration is the reason for very low emigration rate of doctors from, and high rate of immigration to, developed countries. [5] These facts just reflect the world-wide phenomenon of talent gravitating towards better compensation and standard of life. Should that be considered unethical or natural?

Unlike clinical branches of medicine where patients give more importance to the man (doctor) than the machine (stethoscope, endoscope, laparoscope etc), in the case of radiology practice, patients often tend to give more importance to the machinery than the doctor. This skewed perception has been a prime driver for commoditization of radiology practice. Emphasizing the issue of under-appreciation of a radiologist’s role in patient management, Gray Glazer, MD, chair of radiology at Stanford School of Medicine in California, coined the term “invisible radiologist” in May 2009 during the 11th Annual International Symposium on Multidetector-Row CT. One often experiences in day-to-day practice that patients do not feel the same obligation to be courteous in a diagnostic department as they do while they are in the clinician’s office. Patients’ tempers flare very easily in diagnostic departments, probably because patients view diagnostic personnel as technical people who are merely incidental to their treatment.

There is no point in closing our eyes to reality hoping that it ceases to exist. It is up to radiologists and other stakeholders in radiology practice to collectively reach a golden mean as regards pricing of radiology services, especially in urban areas. One possible solution would be region-wise agreement on minimum basic pricing of radiology services. Diagnostic centres need to take a cue from hospitals in this regard. There is an ongoing conflict between major public-sector insurance companies and hospitals regarding the appropriateness of fees charged. Citing the low rates offered by insurance companies, many city-level as well as national-level associations of hospitals have refused to continue cashless services for patients. When faced with a problem of suboptimal compensation for the level of services offered, hospitals are resisting the same on a united front. [6] Health insurance reimbursements do not impact payments made to diagnostic centres, however, this example illustrates the way in which hospital owners have reacted to the problem of suboptimal compensation. In the absence of an association of diagnostic centres at any level, centres will find it extremely difficult to find a solution to their malady. It is incomprehensible as to why diagnostic centres should find it impossible to work in unison when hospitals are doing it with great vigour. If demanding adequate compensation is not being seen as unethical or incorrect by an overwhelming majority of doctors, hospital managements and medical associations, why should it be otherwise for diagnostic centres?

Rather than fighting price-wars, which threaten the dignity of the profession, improving diagnostic skills, standardization of protocols and addressing patient related issues should be the focus of radiologists. There is no point in rushing a dissatisfied patient just to pile-up the numbers. Doctor-patient conflict is often the result of perceived negligence rather than true lack of care. The days when radiologists would ask patients to talk directly to the referring doctor rather than discussing the diagnosis with the patient are over, at least in urban areas. Most educated patients today want the radiologist to counsel them about the radiological diagnosis. Hence, it is important to give each patient enough time and attention.

The importance of keeping radiology services reasonably affordable is indisputable. However, what is ‘reasonable’ depends upon the prevailing socio-economic conditions. Compromising the justified interests of radiologists is not reasonable. With the financial equations rapidly changing in medical field, diagnostic centres face a stiff challenge ahead. Failing to prepare now will mean preparing to fail!

References:
1) Jankharia B. The business of radiology. Indian J Radiol Imaging 2010;20:239.
2) Saha K, Shetty D. Are large compensation payouts for negligence good for medicine in India? BMJ 2014;349:g5229.
3) Boland GW, Halpern EF, Gazelle GS. Radiologist report turnaround time: impact on pay-for-performance measures. AJR Am J Roentgenol 2010;195:707-11.
4) Makhani CS, Petkar MR, Chavan KD, Rao TV. Awareness of medical ethics and medico-legal issues amongst medical professionals. Indian Journal of Forensic Medicine and Pathology 2011;4: 151-55.
5) Dodani S, LaPorte RE. Brain drain from developing countries: how can brain drain be converted into wisdom gain? J R Soc Med 2005;98:487-91.
6) Isalkar U. Private hospitals stop cashless facility for individual insurance. The Times of India [Internet]. 2014 Dec 02 [cited 2014 Dec 22]. Available from: http://timesofindia.indiatimes.com/city/pune/Private-hospitals-stop-cashless-facility-for-individual-insurance/articleshow/45341465.cms

Author Details
Name: Dr Chandrashekhar A Sohoni
Highest Qualification: DNB (Radiology)
Designation: Consultant Radiologist
Institution: Department of Radiology, Medcliniq Health Centre, Karve Road, Pune
Correspondence Address: B-5, Common Wealth Housing Society, Opp. Bund Garden, Pune – 411001, Maharashtra, India

10 Comments

  1. Abhishek Bhartia Abhishek Bhartia Tuesday, January 20, 2015

    Kudos for an excellent article on what ails private radiology practice in India. I think the issues you raise about unfettered competition, high costs, high volume – low rate model, risk from CPA, and requirement for doctors to do charitable work – are applicable to all or most of private healthcare in India.

    I hope that at least some in the medical profession will demonstrate leadership and participate in bringing about change where interests of all stakeholders can be together advanced! This will require a systems approach addressing various inter-related factors as you have identified in your piece.

  2. dr rajeev garg dr rajeev garg Saturday, January 10, 2015

    Very well written by Dr sohoni, even the govt itself is shy off providing state of art radiological facilities at district level or secondary health care govt hospitals. At many places, govt want to put ct scanners/ MRI in public private partnership. Govt also know that putting up high end radiology machines is not renumerative.

  3. dralokahuja dralokahuja Tuesday, December 30, 2014

    Dr Jhankaria was the first person who lifted the veil off the radiology practice(referenced)and very correctly detailed by dr sohoni.
    Having enjoyed 25 yrs of a practice of diagnostics i explicitly agree to the intention of the author.
    It is therefore not surprising that multiple laboratory chains are buying out labs but are not interested in radiology and neither have any radiology corporate chains appeared!!
    A venture capitalist whom i asked recently about radiology chains heaved a Big NO….NO.
    The pressure to outdo each other on TESLAS or SLICES is playing foul within the radiology community. Alas our clinicians need 128 slice scanners for a ct head and are too playing to the gallery.
    Unfortunately it leaves the young entrepeneur confused with the principles of practising the profession .
    Laboratory medicine is worse hit as corporate chains have flooded the markets and have left no room for a young bright professional .
    Last but not the least it is time that we reviewed ethics in medicine for we cannot have dual set of laws
    one for the propreitor and one for a registered company!!!!

  4. Harinath Harinath Monday, December 29, 2014

    very well said sir, every business has commission, references, actually speaking apart from healthcare,taking commission is absolutely acccepted by nonmedical citizens. And by the way isn’t sad tat doctors who are asking commision from collegue doctors.

  5. rakesh mittal rakesh mittal Monday, December 29, 2014

    You mean hide the dirt? S S G?

  6. Sham Sunder Goyal Sham Sunder Goyal Monday, December 29, 2014

    Sir,
    Its rule of the land and essence of business, Every business the inside trading like inventory cost, Shipment or logistic costs, Taxes and profits are never disclosed to consumer. Why the hell doctors should defame ourselves. All costs incurred by a diagnostic test should be headed under incurred expenses like consumable, depreciation, taxes, rent, interest and share of profit etc.
    why on earth doctors are projected as devil whereas it is good practice for everyone else, including media.

    I hail our State leadership for raising the issue in media and social Media, we all should make efforts to force people to change the mindset and change the old and obsolete medical ethics and re write them. we are good people with good services for mankind and not devils.

  7. rakesh mittal rakesh mittal Monday, December 29, 2014

    Read as don’t make up commission by word discount

  8. rakesh mittal rakesh mittal Monday, December 29, 2014

    I just liked doctor nee raj comments for the first time. Dont make up commission using word commission. If ur service requires 1000 rupees why charge him 1500 n pass on 500 for reference. Let the referee charge it as his cost of service. Patient knows the real market rate n doctor gets clean money

  9. Dr Neeraj Nagpal Dr Neeraj Nagpal Monday, December 29, 2014

    One of the best written articles I have read in some time. I however will not skirt the issue of commission by labeling it as discount. It is a reality. However what is unethical 1) Charging 4500 for an MRI and spending 1000 Rs to source the case or 2) Charging 6500 for an MRI without any sourcing expenditure by virtue of empanelments (obtained through high level “sourcing fee”). Doctors including radiologists services have a legal stamp today of being commercial transactions. Why then rules of successful business not be applied. In absence of advertising which is prohibited by doctors maintaining viability in a high investment “business” depends on efficiency of sourcing your clients / patients.
    Business and Economics of Medicine as practiced in India is in doldrums with the balance tilted in favor of corporate business houses despite 75 % of healthcare needs being fulfilled by Small and Medium Heath care Establishments (SMHCE) run by medical entrepreneurs.
    Dr Neeraj Nagpal
    Convenor
    MLAG

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