ESIC lets its patients get robbed

Private hospitals charging twice that collected by AIIMS, CGHS for stents

A vigilant citizen Pawan Saraswat has raised serious issues regarding inflated price of implantations for various patients whom ESIC referred to the empanelled private hospitals. He wanted information about the price of implantation of cardiac devices used by private hospitals in the patients sent by ESIC Health Centres, along with amount charged in individual cases. It was transferred to Director-General, ESIC, and further to 54 other PIOs, but no relevant information was given. His first appeals did not yield any order.

In deciding the costs of the treatment at private empanelled hospitals/centres, ESIC generally follows the rates of 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.

Rate which ESIC is paying for these devices which can be confirmed from the bills submitted to ESIC from outsourced hospitals	Rate at which AIIMS is procuring these devices for implantation in the patients treated at AIIMS	Type of cardiac device
5,50,000 to 8,50,000	1,75,786/-	Implantable cardioverter-defibrillator (ICD) single chamber
7,50,000 to 11,00,000	4,25,000/-	Implantable cardioverter-defibrillator (ICD) double chamber
Not Known	1,95,000/-	CRT-P (Cardiac Resynchronization Therapy Devices with pacing)
12,50,000 to 14,50,000	4,90,000/-	CRT-D (Cardiac Resynchronization Therapy Devices with defibrillator)

The complainant named four implantation of different cardiac devices: 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 presented the following comparative charges of rates paid by AIIMS and ESIC for these devices.

It is evident 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 amounts varied from one to another hospital as follows:

Corroborating the contentions of the complainant, reputed doctors also say that these cardiac procedures are unwarranted in most of the cases as reported in media on June 25th 2015.

“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. Doctors often scare the family so much that they agree to an immediate procedure," says cardiac surgeon Dr Devi Shetty of Narayana Hrudayalaya.

Senior cardiologist in Apollo Health City, Hyderabad, Dr Manoj Agarwal, says that there was no monitoring over this misuse and unethical practices. Advocate Birendar Sangwan filed a plea in the Delhi High Court in 2014 seeking price regulation of these life-saving devices and that coronary stents, a spring-like metal used to prop open blocked arteries, be included in the National List of Essential Medicines (NELM).

8 Lakhs – IGESI Hospital	2.7 Lakhs – ESI Hospital, Bapu Nagar	AICD (DC)
14.3 Lakhs – IGESI Hospital	1.15 Lakhs – ESI Hospital, Baddi	AICD (SC)
8 Lakhs – IGESI Hospital	3.1 Lakhs – ESI Hospital, Joka	CRT-P
14.3 Lakhs – IGESI Hospital	1.15 Lakhs – ESI Hospital, Rourkela	CRT-D

The complainant said that there is a huge drop in the number of patients preferring these devices, though needed, because of exorbitant and inflated prices of implants. He alleged that patients were deprived approximately Rs 1,500 crore every year from 2013 to 2016. The private hospitals are being benefitted at the cost of wealth and health of patients, while the government remained a mute spectator.

The letters sent by the appellant to the DG of the ESIC and the Health Ministry stated the same amount. Another detailed letter sent to the PMO dated 29th May 2015 also asserted on the same issues and the applicant requested immediate action to be taken.

A research paper by the American Health Association has revealed that while prices of drug-eluting stents vary between $600 and $2,971 in India, it is sold at around $1,200 in the US. In India, stents turned out to be subject to substantial price markups on their journey from manufacturer to patient, at times exceeding 4 times their original imported value.

The private empanelled hospitals are charging more than 2.5 times of actual price quoted by CGHS and AIIMS. This fact is known to the ESIC. The question is why the ESIC refers thousands or lakhs of patients to private hospitals knowing fully that they have to shell down cost 2.5 times of actual price by CGHS. A big business is being transacted through these references.

The ESIC should have complained to the Health Ministry or Union Government about inflation of prices. Instead, it is facilitated for years continuously leading to unjust enrichment by the private hospitals and stent makers probably with kick backs to other key players.

Hence there is a huge public interest. Serious regulatory lapse is that there is nobody to check the stent coming in the box without complete information for consumers like maximum retail price, batch number, name of the manufacturer etc. and the poor patient has no mechanism to check the quality of the devices.

The private hospitals are exploiting this ambiguity, which is sustained by vested commercial corporate medical industry, unethical doctors and deliberate silence by the regulators. This could be a mass violation of consumer rights making ESIC a conduit. The government/ESIC reimburses the inflated costs of the implants/devices as and when the empanelled private hospitals are referred by ESIC. The authorities explained their administrative difficulties to justify the silence or inaction.

The government or Union Labor Ministry or ESIC cannot abdicate the responsibility of protecting the labor and employees from fleecing of private hospitals in implanting cardiac devices. They have a duty to prevent unfair and unethical medical practices, resulting in undue loss to patients or insurance company or ESIC and illegal gains to the companies or hospitals. This will even amounts to a crime.

The ESIC is the sole responsible authority for the employees coming under its ambit. Unfortunately this recommendatory power of the ESIC is being used for unjust inflation and undue malpractices.

Around 34 Super Specialty hospitals come under the ESIC but the question still lies, “why ESIC is finding the need to outsource and letting its sick employees be scapegoats of excessive over-charging?” Even if other private insurance companies pay for stents in such a manner, the principle of utmost good faith uberrimae fide would be totally defeated, denting credibility of the insurance system.

The government slashed, recently, the prices of life-saving coronary stents up to 85% and fixed ceiling price of Rs 7,250 apiece for bare metal stents, and allowed a maximum retail price of Rs 29,600 for drug eluting stents of all varieties. Is this policy being implemented? Mere capping of the price of the implanting devices will not end the exploitation of the patients, the Government should also consider the capping the cost of entire operation, diagnosis, process and post implantation consequences.

The Commission recommended that all related departments and ministries to come up with a felicitous law that not only mandates these organizations to charge stent prices, which is economically reasonable but also ensures that any other over-riding prices charged by hospitals in the name of infrastructure or other operation related services do not aggravate the already worsen situation.

It was directed to provide information along with a comprehensive note on what action it has initiated to stop this unethical manipulative practice. (Based on the order of CIC in CIC/BS/C/2015/000118, Pawan Saraswat v. PIO, ESIC HQ Office, decided on 8.5.2017)