Press "Enter" to skip to content

Shall we stop this bleeding?

While writing this article, I couldn’t help but remember the visual from the film Lincoln, where Daniel Day-Lewis, the actor who played Abraham Lincoln in the film, delivers the famous quote “Shall we stop this bleeding?” Let me explain why.

Dr Chandrashekhar A Sohoni
Dr Chandrashekhar A Sohoni

The facts and figures:

Let us take a look at the investment and earnings of some of the common radiological modalities.

• An average computed radiography unit costs about Rs 12 lakh. The gross earning per X-ray shoot is Rs 300. Each X-ray exposure recovers about 0.025% of the capital cost.

• An average ultrasound machine costs about Rs 20 lakh. The average gross earning per ultrasound scan is about Rs 700. One ultrasound scan recovers about 0.035% of the capital cost. The annual comprehensive maintenance contract for a Rs 20-lakh ultrasound machine costs around Rs 3 lakh, whereas the annual service contract costs around Rs 50,000. These costs have not been considered in above calculation.

• A 1.5 Tesla Magnetic Resonance Imaging (MRI) machine costs about Rs 4 crore. The average gross earning per MRI scan is about Rs 6000. Each MRI recovers about 0.015% of the capital cost. The annual comprehensive maintenance cost for a 1.5 Tesla MRI machine costs around Rs 20 lakh, whereas annual service contract costs around Rs 8 lakh. These costs have not been considered in above calculation.

Let us also have a look at some other common, operator-dependent, non-radiological modalities. Electrocardiogram (ECG) is non-invasive, whereas endoscopy and hysteroscopy are minimally invasive modalities. The time and effort required to master the skills for practising these modalities is almost the same as for radiological modalities. Hence, they are all comparable on the “skill-set” front.

• An average ECG machine costs Rs 50,000 and the gross earning per ECG is about Rs 200. Each ECG recovers about 0.4% of the capital cost.

• An average upper gastrointestinal (GI) endoscopy assembly costs about Rs 10 lakh and the gross earning per upper GI endoscopy is Rs 3,500. Each upper GI endoscopy procedure recovers about 0.35% of the capital cost.

• An average lower GI endoscopy assembly costs about Rs 10 lakh and the gross earning per lower GI endoscopy is about Rs 6,000. Each lower GI endoscopy procedure recovers about 0.6% of the capital cost.

• An average hysteroscopy assembly costs about Rs 10 lakh and the gross earning per hysteroscopy is about Rs 9,000. Each hysteroscopy procedure recovers about 0.9% of the capital cost.

The question:

Excluding radiological modalities, the lowest percentage of capital recovery per-unit is for upper GI endoscopy (0.35%) among the above. If the percentages of capital recovery per-unit of the radiological modalities were to be equated to that of upper GI endoscopy, an x-ray would cost Rs 4,200, an ultrasound would cost Rs 7,000 and an MRI would cost Rs 1,40,000. Conversely, if the percentages of capital recovery per-unit of ECG, endoscopy and hysteroscopy were to be equated to that of ultrasound (0.035%), an ECG would cost Rs 9, and endoscopy and hysteroscopy would cost Rs 350 each.

Now, the question is — Are the above-descried non-radiological investigations greatly overpriced or are radiological investigations grossly underpriced? The logical conclusion would be that radiological services in India are grossly underpriced. The non-radiological modalities mentioned above are only for the purpose of comparative illustration. In fact, there is no medical service which is as seriously underpriced as radiology services. Just to corroborate this conclusion — a postgraduate physician with a stethoscope worth Rs 800 rightfully charges Rs 300-700 per consultation; a postgraduate radiologist with an ultrasound machine worth Rs 20 lakh charges almost the same per patient. Thus, the radiologist does not charge the patient for one of the two – either his opinion or the machine.

Prime reasons for underpricing of radiological services: –

1. Radiological modalities are indispensable for the diagnosis of a vast number of disease processes. Therefore, it is believed that radiological services need to be kept in a particular price-bracket to be affordable and volumes can make-up for underpricing. This justification, however, seems untenable because – (1) other equally common and important non-radiological modalities are better priced, and (2) private enterprises cannot sustain for too long by flouting basic economic principles. In today’s extremely competitive and litigious world, it is irrational to expect the kind of volumes required to compensate for the gross underpricing, especially in urban practice.

2. Radiology services are almost completely dependent upon referrals from treating physicians, with negligible direct walk-in clientele. Therefore, referring physicians have a lot of say in pricing of radiological services, even if they do not have any financial investment in the set-up. Radiological facilities are reluctant to increase prices despite ever-increasing inflation due to fear of losing business to the competition.

3. Even a good radiologist is generally not known to the patient population in the same measure as a good physician. Patients largely depend upon the treating physician to recommend a radiologist. Unfortunately, the practice of using technology (rather than the radiologist) as the unique selling proposition has resulted in commoditization of radiologists and radiology services. Therefore, even an exceptionally skilled and/or experienced radiologist cannot claim an exceptional price, unlike an exceptionally skilled and/or experienced surgeon or physician.

4. Radiology centres have to constantly upgrade to the latest and hence more expensive technology just to survive the competition. Most centres find themselves unable to pass on the additional cost to the patients for reasons mentioned above.

5. Diagnostic modalities like endoscopy are primarily based on self-referral, whereas radiological modalities are based on cross-referral. That is the primary reason for the difference in the pricing of these services.

6. Non-radiologist doctors who install x-ray and ultrasound machines in their nursing homes are not equally affected by the underpricing because: (1) Their main sources of income (surgeries, procedures, hospital admissions, etc) more than compensate for the underpricing of radiology services. Loss in imaging can be recovered somewhere else. (2) They do not have to invest in the latest machinery but can still charge the same as better-equipped radiology centres.

Possible solutions for the underpricing problem: –

1. Radiologists and investors need to realize the impracticality and unfeasibility of the current pricing of radiology services, especially when compared to other medical services described above. To realize that a problem exists is the first step in solving one.

2. Unity is the only firewall against the virus of exploitation. Radiology centres need to act on a united front for making a significant positive correction in the baseline pricing of radiology services. Undercutting is a dumb, self-destructive practice that is a bane to Indian radiology. Let there be healthy and sustainable competition. The correction in pricing of radiology services should be such that the practice of radiology becomes sustainable at a level par with most other ethical, respectable and growing healthcare business ventures like hospitals. As of today, radiology practice in India is being exploited in more than one way.

3. The role of radiology associations is important. Associations can negotiate with machine manufacturers for getting better deals for its members, group discounts, etc, which otherwise would be difficult for individual radiologists. Since unity among doctors, especially referral-dependent ones like radiologists, will always remain an elusive dream, regional associations should take the lead in publishing and regularly updating the baseline cost-list for radiological services in that region; much like municipal corporations publishing ready-reckoners for real estate prices. Such announcements at organisational level make it easier for radiologists to justify their pricing to referring physicians and patients. Radiology association also needs to strongly urge the Medical Council of India (MCI) to come out specifically and fairly on the practice standards for Radiology in India. If it is unethical to hand over an X-ray to a patient without a report from a radiologist then let that be stated in so many words by the MCI. Else abolish the specialty of radiology and let the self-declared, non-radiologist imaging experts take over the mantle of imaging. At least the future generation of medical students will be saved from falling into the trap. To say that radiologists are required for difficult cases but not for routine cases is just a civilized way of telling radiologists to be happy with the leftovers.

4. Learn from the Anaesthesiologists. Much like radiologists, anaesthesiologists’ is a dependent job. However, by charging 30% of the surgeon’s fees, their interest is kept in alignment, and not in contradiction, with that of the surgeons’. Today’s anaesthesiologists should be thankful to their predecessors for founding and propagating an intelligent practice of percent-share rather than fixed price. That acts like a buffer not only against inflation but also against exploitation. The same is not true about radiology. The classical thought process — more the patient spends on diagnosis, the less he spends on treatment — leaves the diagnosing and treating physician pulling on opposite ends of the rope. The referral-dependent physician is obviously at the receiving end. Therefore, region-wise uniform baseline pricing is essential for radiology services. Baseline pricing puts a cap on the lower limit, without a cap on the upper limit. It is akin to minimum wage, a legislative device in the western world framed against exploitation.

5. Radiologists need to respect themselves and their skills more than what they currently do. Nothing can be achieved and everything else is meaningless without self-respect. A level playing field needs to be created between referring physicians and radiologists.

Conclusion

Recently, the prime minister of India made an appeal to the affording Indians to give up their subsidy on cooking gas, which is an essential commodity. The appeal comes from the realisation that substantial subsidies cannot be sustained for too long, especially if they are being provided uniformly to a large population comprising of radically diverse income groups. This simple economic principle applies to public and private sector alike. Let us not forget that we are the same country that gives business worth rupees thousands of crores to Bollywood, League cricket, online shopping, automotive industry etc. There is no reason for the vast affording class to not pay radiology services their due. But first, radiologists need dare to ask in unison. Charity for the deserving few can and should continue alongside. Make no mistake, radiology, even in the current form, will continue to thrive because it is working in favour of all except the radiologists.

Radiologists are a minority, low in the food-chain, and hence their interests will get the least priority in the scheme of things. Without reforms initiated by radiologists themselves, growth in radiology may very soon not be synonymous with growth of the radiologist. The radiologists’ community, while busy researching exotic MRI sequences, needs to spare a moment for understanding some practical problems that the fraternity is facing. Radiologists woke up to the threat of Preconception and Prenatal Diagnostic Techniques (PCPNDT) Act only when some of them were actually jailed. The economic monster is in the offing. Are we going to wait till private radiology centres start packing-up? It might just be too late by then. Now is the time to stop this bleeding.

(Please note: The numbers quoted in this article have been derived by the author from the day-to-day urban clinical practice. The numbers may vary on either side of average depending upon the practice set-up.)

Author Information:
Dr Chandrashekhar Sohoni
MBBS, DNB (Consultant Radiologist)
Medcliniq Health Centre, Karve Road, Pune

5 Comments

  1. Shirol Shirol Saturday, June 27, 2015

    A very crude and irrational way of comparison of different specialties as comparing two machines.. Many radiologists salary/incentives are far higher than any superspeciality consultant.. Imaging is known as cow / kamadhenu of the hospital.. These imaging centres are building multi crore super specialty hospitals and not any of the super specialty consultant… heard of hospitals and nursing homes closing.. how many of you have heard of scan centres closing?? A very well written fiction article

  2. Satish Satish Monday, May 4, 2015

    It is for you to realize as to why Spicejet, Air India and Kingfisher airlines are in the soup. “Utilization theory” works only when volumes compensate the low pricing. Otherwise, any business goes the same way that above three air-lines have gone. And that is the business reality.

  3. narendra narendra Monday, May 4, 2015

    A fool can ask a question/raise query which even wisest person cannot answer. we should not waste energy,time and money on such irrelevant and senseless questions- it is shear ignorance and illiteracy on part of channel, if not idiocy. We must continue our work, some body else will say something new

  4. rj rj Monday, May 4, 2015

    There is gross over-simplification and an attempt to stitch together different pieces:

    Ever wondered, if IndiGo calculated how much of the aircraft cost it recovered from each passenger? Utilization is the key, not necessarily the pricing.

    Comparing GI with X-Ray sounds ridiculous from pricing or recovery point if view, just because they both happen to be pieces of equipment!

    Giving up on gas cylinder subsidy being drawn as an inspiration sounds like a cruel joke!

    The author obviously needs help to understand the business realities.

  5. mani mani Sunday, May 3, 2015

    The radiology post graduate degree tuition fee commands the highest amount of money in the form of a capitation fee (defined as self funding your education to compensate for mediocrity in intelligence, a practice found in modern medicine in India).

    Last check a Radiology degree cost 1 crore to 4 crores – funded through rich parents, hefty dowry, political funds, royal lineage who knows – but there are folks crowding to get in, for that ‘elite’ training. They call it a super-specialty.

Leave a Reply

Your email address will not be published. Required fields are marked *