Corruption in Indian Medicine

Summary

Published as a pamphlet by the Forum of Free Enterprise in Mumbai and dated August 25, 2014, this booklet reproduces an article by Dr. Samiran Nundy — gastrointestinal surgeon at Sir Ganga Ram Hospital, New Delhi, and Editor-in-Chief of the journal Current Medicine Research and Practice — that first appeared in that journal’s May–June 2014 issue (Vol. 4). The Forum’s introduction by President Minoo R. Shroff frames the piece against a backdrop of public outrage: the Union Health Minister, Dr. Harsh Vardhan, had himself used the word “cartelization” on the floor of the Lok Sabha to describe kickback arrangements between doctors and diagnostic laboratories, and US hospitals had been fined nearly $200 million in 2014 for extracting referral fees.

Nundy’s central argument is that corruption in Indian medicine is systemic and structurally embedded rather than a matter of individual misconduct. He traces its origins to the capitation-fee admissions racket at private medical colleges — most owned by politicians — where students encounter unqualified teachers and scarce patients, emerge poorly trained and deeply indebted, and then face a professional environment in which survival requires participating in referral kickbacks. Specific monetary details ground the account: CT scan referrals yield cuts of Rs. 1,500; organ transplant facilitation charges at corporate hospitals can reach Rs. 1–2 lakh per case; senior doctors in five-star hospitals are visited monthly by financial executives and pressured to justify revenue generation from investigations and procedures. Corruption, Nundy notes, extends equally into the public sector, where promotions and desirable postings are secured through political and bureaucratic influence. Transparency International had ranked the Indian healthcare sector as the second most corrupt institution a citizen encounters, after the police.

Nundy argues that three questions must be answered: whether medical corruption is universal or India-specific; why it occurs; and how it can be addressed. He accepts its global existence but contends that in the third world, both petty corruption (queue-jumping, false certificates) and grand corruption (drug procurement, college recognition, plum postings) coexist, with the petty variety falling heaviest on the poorest patients. His prescribed remedies are practical and technology-mediated: full patient information about services and costs; electronic medical records — he discloses a conflicting interest as co-founder of the RaxaDoctor prototype — which evidence suggests both improve care quality and reduce scope for corruption; a national watchdog agency modelled on Britain’s National Fraud Authority; and exemplary punishment for offenders. The booklet appends a relevant extract from the Economic Survey of July 2014 showing that India’s health sector receives only 1.4 per cent of GDP despite a 200 per cent increase in central plan outlay between the Eleventh and Twelfth Plans.

Key points

• Transparency International ranked Indian healthcare the second most corrupt sector citizens encounter, after the police.

• The corruption chain begins at entry: capitation fees at privately owned medical colleges leave graduates indebted and professionally compromised before they begin practice.

• Kickback rates are quantified: Rs. 1,500 per CT scan referral; Rs. 1–2 lakh per organ-transplant facilitation charge at corporate hospitals.

• Five-star hospital management formally reviews senior doctors’ revenue generation monthly, institutionalising financial pressure as a driver of over-investigation.

• Public-sector corruption mirrors private-sector patterns: promotions and desirable postings are secured through politicians and bureaucrats rather than merit.

• Nundy distinguishes petty corruption (queue-jumping, fitness certificates) from grand corruption (drug procurement, college recognition) and notes both coexist in India, unlike in developed countries.

• Proposed remedies include mandatory patient cost disclosure, electronic medical records (which evidence shows also reduce corruption), a national healthcare fraud authority, and exemplary punishment.

• The pamphlet’s Forum introduction notes that Health Minister Harsh Vardhan himself used the term “cartelization” in the Lok Sabha and acknowledged the Medical Council of India as a major source of corruption — the very body he proposed to refer malpractices to.