Collusive behaviour in Healthcare and
impact on consumers: evidences from
Assam and Chhattisgarh
Rijit Sengupta
CUTS International
COHED National Policy Forum
24th May 2011
Outline of Presentation
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Introduction
CUTS study findings
COHED project
Findings of the First Stage
Findings of the Second Stage
Conclusions & Way forward
I. INTRODUCTION
Mamoni Das visits a public hospital in Guwahati,
expecting quality treatment at affordable cost
She is seen by a doctor and given a prescription
containing a list of medicines
Approaches public pharmacy, for free medicines
Mamoni is informed that medicines written in the
prescription are not available and has to get them
from the private chemist, outside
She buys the medicines with whatever little money
she had come to the hospital with…
What did we find?
49% of the medicines that Mamoni Das and
some of the other patients had to buy from
private sources after visiting the public hospital
were present in the Hospital Stock Register
9% of the medicines that were absent in the
Hospital Stock Register had substitutes, that were
present in the Stock
WHY DID MAMONI HAVE TO BUY MEDICINES
FROM PRIVATE CHEMISTS?
Possible Reasons?
 Docs did not know the status of the
medicines in the Hospital Stock Register,
and suggested that ‘good
quality/effective’ medicines be bought
from outside
 Mamoni Das was a victim of ‘collusive
arrangements’ between various entities
inside and outside the public hospital
What is Collusion/Collusive
Practice?
Collusion refers to combinations,
conspiracies or agreements among sellers
to raise or fix prices and to reduce
output/supplies in order to increase
profits (OECD, 2002)
DID THE PLAYERS (in the public hospital
Mamoni visited) ENTER INTO AGREEMENTS
TO REDUCE SUPPLY OF MEDICINES through
the public distribution channel?
A Grim Picture!
Competition Act 2002 of India
The Competition Act 2002 of India prohibits ‘………enterprises
or associations of enterprises (or persons or association of
persons) from entering into any agreement in respect of
production, supply, distribution, storage……..which has an
appreciable adverse effect on competition’. Agreements having
such effects on competition result in - determining purchase
or
sale
prices;
limiting
or
controlling
production/supply/marketing/development/provision
of services; geographical allocation of markets; and
collusive bidding.
Competition Commission of India is sufficiently empowered
and should investigate if supply and distribution of
medicines in these public hospitals have been restricted
due to collusive agreements between various players
II.COHED Project
Goal: Gather evidence of collusive practices and assess if some
of them infringed the provisions of the India Competition
Act 2002, or could be addressed through other regulatory
instruments
Objectives
 To identify market malpractices in healthcare in 2 states
 To assess scope and effectiveness of the present
regulatory system to deal with malpractices/collusion
 To make recommendations for better regulatory
outcomes
 To spread awareness about these recommendations
and lay the ground for their implementation
II.COHED Project (Contd.)
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Research based Advocacy
States: Assam & Chhattisgarh
Partnership with local NGOs
Field-work and Data Analysis
2-stage Survey
- First Stage: Consumer Survey
- Second Stage: Prescription analysis
III. FIRST STAGE: Consumer
Survey
 3 towns in each state
 Public Hospitals
 Consumer
information
household
expenditure on healthcare, behaviour of
heathcare providers, availability of healthcare
services, prices of such services, etc.
 Findings:
- Tendency of choosing private healthcare
service (often to suit convenience and save
time, etc.) existed
- Common belief: simple correlation exists
between cost of healthcare & its quality
III. FIRST STAGE: Consumer
Survey (Contd.)
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In addition to greater consumer awareness,
there is also a need for change in
consumer’s attitude towards healthcare
Private healthcare suffers from high degree of
variation and there is hardly any regulation
to maintain a minimum standard
An extremely high frequency of referrals (to
diagnostic clinics) combined with the
prevalence of ‘cuts’ for referring doctors was
noted
In spite of having received medical treatment
at a public hospital, many consumers bought
medicines from private sources
WE DECIDED TO DIG DEEPER……….
IV. SECOND STAGE:
Prescription Analysis
 Same towns as the first stage
 Prescriptions collected to assess cost of
medicines, availability of medicines in public
hospital, etc.
 Common Findings
- large number of respondents bought medicines
from private sources
- Non-availability of drugs in public hospital is not
uncommon
- Insistence by docs to buy drugs from outside
- High degree of prevalence of ‘incompleteness of
diagnosis’
Cost to Consumers & Availability
of Medicines
Cost of Medicines vis-a-vis Source
450
120
382
Cost of Medicines vis-a-vis Source
100
300
80
250
60
200
163
150
40
115
33
100
20
400
80
250
66
200
60
140
150
40
100
66
20
50
0 6
0
0
0
Dr
Am bedkar
Hospital,
Raipur
1.5
District
Hospital,
Pandri
0
District
Hospital,
Durg
CIMS,
Bilaspur
Hospitals in Chhattisgarh
120
Avg Cost of
Prescription
(Rs.)
Private Source
of Medicines (%)
28
28
8 5
0 0 3
Seldom
35
Never
19
3 0
1
0
Percentage
Often
45
District
Hospital,
Pandri
District
Hospital,
Durg
Hospitals in Chhattisgarh
CIMS,
Bilaspur
70
60
Always
50
40
30
35
Often
Seldom
39.5
33.5
38
27
26
18
20
10
Dr Ambedkar
Hospital,
Raipur
70
70
Always
60
Private Source of Medicines
(%)
Procurement of Medicines from Private Sources
80
69
59
Avg Cost of Prescription (Rs.)
Hsopitals in Assam
97
90
0
Civil Hospital, Urban Health Guw ahati Public Health
Nagaon
Centre,
Medical
Institutions,
Nagaon
Colleage & Bongaigaon
Hospital
Procurement of Medicines from Private Sources
Percentage
100
98
94
300
50
30
120
374
350
Cost of Medicine (Rs)
Cost of Medicine (Rs)
92.5
Medicine obtained from Private
sources(%)
99
350
Medicines obtained from Private
Sources (%)
400
13
6
Never
17
6
1
0
0
0
Civil Hospital,
Nagaon
Urban Health
Centre, Nagaon
Guw ahati Medical
Colleage & Hospital
Hospitals in Assam
Public Health
Institutions,
Bongaigaon
Completeness of Diagnosis
Completeness of Diagnosis
Completeness of Diagnosis
120%
120
41
58
32
Percentage
Percentage
90%
49
60%
30%
59
42
68
90
45
60
30
51
55
8
0
0%
Dr
District
District
CIMS,
Am bedkar Hospital, Hospital, Bilaspur
Hospital, Pandri
Durg
Raipur
Hospitals in Chhattisgarh
90
92
Incomplete
10
0
Civil Hospital, Urban Health
Nagaon
Centre,
Nagaon
Guw ahati
Medical
Colleage &
Hospital
Complete
Hospitals in Assam
Public Health
Institutions,
Bongaigaon
Incomplete
Complete
IV. SECOND STAGE: Account of
Medical Representatives
 Three types of malpractices:
- Reminders
- Inducements
- Cash payments and bribes
 Innovative ways of ‘keeping track of
sales’, for cash reimbursements
V. Conclusions & Way forward
 Issues for Policy
- Procurement and Distribution of medicines
- Public display of hospital stock
- Periodic scrutiny of Prescriptions
- Identify and adopt state level good practices’
- Greater attention towards patients
- Adoption of Clinical Establishment Act, 2010
in states
Conclusions & Way forward
 Issues for Consumer Action
- More careful in choosing provider(s)
- Approach consumer forum for redressal
- Raise demand for generic drugs
- Demand discounts
CUTS IS GOING TO TAKE THESE FORWARD
IN THE STATES………..
Ending thoughts
Endeavour to make Mamoni Das’s
future visits to the public hospitals
more pleasant and less costly!!
Thank You
Email: rsg@cuts.org
Cell:+91-9829285928