Hospitals make a killing on medical devices like stents, implants Rema Nagarajan,TNN | Jul 13, 2014, 12.58 AM IST The cost of medical devices like stents and pacemakers is enough to give anyone a heart attack. TOI found that patients were being forced to pay double or even triple the price for medical devices at hospitals. As most of these are not available in the open market, patients cant check prices and are held hostage by hospitals, which force them to buy at the price they quote. Sources in the healthcare sector told TOI that in several hospitals, the margins on devices — ranging from stents, implants and pacemakers to artificial joints, titanium plates for fractures, and valves — could add up to as much as 30% of their profits. Hundreds of such devices are used in a hospital every day. Of course, it is the patient who pays for these handsome margins. Take what happened to a lawyer whose father was admitted to a charitable hospital in Kochi. The doctors advised that the patient needed three drug eluting stents at Rs 95,000 per stent. Since he knew the pharma and medical devices market reasonably well, the lawyer went directly to the hospitals supplier, who offered the same stents for about Rs 40,000 each, a rate much higher than would have been charged to a bulk buyer like a hospital. But the hospital refused to use a stent bought by him. He had no option but to take the stent provided by the hospital as his father could not be shifted. After much haggling, the hospital offered to give three stents for the price of two, charging him Rs 87,000 for each. The final price of each stent, including the free one, was effectively Rs 58,000. The actual cost at which the hospital gets it is probably in the range of Rs 30,000 or even less. Thats a mark-up of almost 300% on just one stent. And this was a top-of-the-line branded stent from one of the biggest multinationals. There were many patients there who were being charged the full amount. Even the supplier gets a cut from the company. Imagine what the actual price might be if directly sourced from the company, probably about Rs 20,000, said the lawyer. Adding to the margin on devices is the profit hospitals make billing patients for medicines using the same principle of buying cheap in bulk and selling at a much higher price to the patient. In fact, devices, medicines and diagnostics could account for as much as 70% of a hospitals profit. Some very reputed doctors confirmed to TOI that this was the case, but asked not to be named. Experts feel that making it mandatory to declare the maximum retail price on each device could help cap the price and make companies compete to offer lower prices. However, doctors point out that having an MRP has not prevented profiteering in medicines, with the MRP being fixed high enough to accommodate commissions since there is no limit on what the MRP can be. Moreover, while MRP is mandatory on everything manufactured in India, many devices are imported and escape this stipulation.
Posted on: Sun, 13 Jul 2014 04:13:56 +0000
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