Medical Insurance – Opening the Pandora’s Box

April 7, 2010

One of the finest ways of privately financing healthcare needs is through health insurance and in western countries without health insurance people cannot think of having basic and essential healthcare facilities at all.  That is why there was much hullabaloo when Barack Obama finally succeeded in signing into law Affordable Health Care for America Act last month that received wide publicity the world over. 

In India too the concept of health insurance is gaining popularity largely due to escalating cost of health care and inadequate infrastructure which makes access to health care difficult to a large section of the society.   Medical insurance is more than just a safeguard to the health.  It acts as a buffer against extra and huge expenses and any other eventuality arising out of failing health.  But sadly in Mangalore, the city of the educated learned and intellectuals this health insurance has become conduit for unethical practices.  The major players of course are hospitals, doctors some insurance officials cum individuals.  There exists an unholy nexus between these players which in due course will prove detrimental to the middle class and lower middle class families relying on health insurance.  Due to this unethical association insurance companies may go to bonkers or the individuals will be forced to pay higher health premium which may go beyond the affordability level of vulnerable sections of the society. 

Modus Operandi 

The modus operandi at work is simple in the case of medical insurance.  If a person getting admitted to the hospital is insured he runs a huge bill sometimes not in proportion to the ailments he/she suffers from and the insurance companies end up paying the bill.  “It is not just the hospitals which jack up the cost.  The doctors as the patient whether he is insured and if yes his charges for the services rendered will jump three-fold. I really feel sorry for the insurance companies because this kind of unabashed deals will force the companies to part with huge sums and the whole purpose of insurance is lost”, says a reputed doctor on condition of anonymity. 

The fact that there are no fixed charges in hospitals for the services rendered by doctors make it all the more convenient for doctors to charge exorbitant rates in the absence of such fixed costs which is exploited by the doctors to the tilt. Most of the hospitals issue a small chit of paper writing the amount doctor’s consultation/other charges and this income does not even come under the purview of income which means it is a mode generating black money by the doctors.  They don’t mind enhancing the cost as long as it does not account for his income tax. 

Another doctor who did not want to be quoted said that a patient had come to him asking for a bill of Rs. 2000/- as his consultation fees in order to claim insurance when he had charged only Rs 200/-.   Since the doctor has maintained a clean record (very few doctors do this) he showed the patient that he had charged only Rs. 200/-.  The truth was that the hospital had shown the doctors charges as Rs. 2000/- and gobbled up the difference amount.    

Misusing the Insurance Facility 

Melvin D Souza, Branch Manager of Star Health Insurance, India’s first and only exclusively health insurance Company says “It is true that doctors and hospitals are misusing the facility and we have come across instances of this nature. Therefore we have appointed our own doctor for every Taluk who visits the patients or hospitals to assess the cases and this has worked much better. But ultimately it is the doctor who treats the patient will have the final say.  We cannot help it”.    

There are other unscrupulous methods used by this unholy alliance.  If a particular ailment requires hospitalization only for a day or two the hospitals/nursing homes extend the stay with the connivance of the doctors beyond this required period so that hospital bills runs fat and since insurance companies foot the bill individuals also become willing cahoots in this murky deal.  The situation gets murkier when the names of the patients are still found in the hospital list even after the patients are discharged.  This is a double edged sword for the simple reason that anti-social elements can indulge in acts of murder, arson, looting, robbery etc., and claim they were in the hospital. With the hospital records showing their names as inpatients they can easily get away with their acts of crime.  

Melvin however says Star insurance accepts only printed bills/receipts which is another way of checking the malpractice.  “Sometimes when we feel there is some discrepancy with regard to the doctor’s fees or if we feel the rates are exorbitant our company doctor will talk to the doctor concerned and we have succeeded in reducing the amount after negotiations” says Melvin.  But not all doctors relent.  Without naming the doctor Melvin says “one doctor shamelessly told me I have to maintain my standard in the society and that is why I have to charge so high.  My haircut costs 1,500/-, my tie, shoes are branded and expensive and without charging so much I cannot maintain my standard”.  

No Fixed Charges 

However, in reputed hospitals with medical colleges there is no scope for such malpractices and everything is handled professionally by different departments.  The charges for various treatments in these hospitals are also fixed which obviate malpractices of any kind.  But some smaller hospitals and nursing homes are known to be the dens of such malpractices.  It may be recalled that a few years back some hospitals/nursing homes were derecognized in Mangalore following irregularities with regard to cashless insurance scheme when insurance companies realized what was going on.  In this scandal money was collected by the hospitals from patients in the name of doctors who never treated the patients and the money also did not go to the doctors.   But sadly the same nursing homes/hospitals are recognized once again. 

Leading Orthopedic Surgeon Dr Edward Nazareth says there is a strong nexus between hospitals/nursing homes, doctors, some insurance officials and individuals/patients in sharing the spoils of medical insurance.  He cites the instance of a nursing home charging Rs. 8000/- for tooth extraction when it should have cost within Rs. 1000/- or so.   Dr Nazareth recalled an incident which he was called to treat a patient in a private nursing home and he had charged Rs. 200/- as consultation cost.  But he was not paid the money.  When the relative of the patient was admitted next time and he was called upon to treat them he mentioned that they had not paid for his services last time.  The annoyed patient then called up the nursing home and blasted them and after facing the music they paid his charges the same day giving some frivolous reasons for the delay.  “I am not sure how much   the nursing home has collected from the patient.  But this trend is very much prevalent in Mangalore and it is detestable”, Dr Nazareth says.  

Too Many skeletons in the cupboard 

It is despicable that some doctors have become a party to this unholy nexus thus giving credence to the age hold adage that even a corpse would open its mouth on seeing money and some doctors even recommend patients to get admitted to private nursing homes.   Some of these hospitals are said to be paying kickbacks to insurance officials and the unholy alliance continues to thrive. Some hospitals give a small slip to the patients showing them as doctor’s charges but one is not sure how much of that actually goes to the doctors and how much to the management of the institution.  That the doctors are a party in this crime is appalling to say the least. One can only say it is the greed for money for such insensate attitude of these learned class. While some doctors were keen to come out in the open about the existing malpractice they were advised by the ilk not to open the Pandora’s Box.    

Dr Nazareth feels that such an obnoxious trend can be curbed if hospitals have fixed charges for treating various kinds of ailments or for surgeries.  Or even insurance companies can put a ceiling saying they will not pay anything beyond the prescribed limit for the treatment of different ailments.  In fact the Sampoorna Suraksha scheme launched by Dharmasthala has set a precedent as by fixing the ceiling limit of coverage and the scheme is working well.  

It is not just this. The general feeling among the public is that doctors are able to get away without paying tax as they don’t issue any receipt for the consultation charges just as in case of hospitals where their charges are collected in the form of a small slip.  An income tax official however, said that people should demand the receipt rather than feel jealous about them making money. All doctors are in fact required to maintain form 3 C that shows details of their transactions.  In fact maintaining such records will also be useful to insurance officials to verify certain data if required. 

While some doctors say that hospital O T theatres would provide accurate data to tally with the charges of the doctors for their services, the question is who will go and do the checking.  Income Tax Commissioner V V Prasad “as long as the cash economy exists there is very little anybody can do”. 

While no one grudges about the earning capacity of doctors one expects them not to encourage malpractices in medical insurance which will harm those who are really in need of medical insurance to cater to their health needs.  In a country like India where public health care system is dismal providing reasonable health care to its teeming millions is going to be a major challenge to the government.  That is where health insurance comes into the picture.  If that too gets embroiled in fraudulent dealings no one can save us.  One just remembers what Supreme Court has said about our country – “this country cannot be improved even by god”.  If the people involved in the medical profession are partners in fraudulent dealings one wonders who can save this country?

by Florine Roche - Daijiworld Media Network
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Comment on this article

  • mahesh, mangalore

    Tue, Apr 13 2010

    One of my relative (having insurance)was admitted to a private hospital in shimoga for abdominal pain.He was initially treated for heart problem,though he had no symptoms of heart attack.Later on he was diagnosed as having Gall bllader stone and jaundice.They did ECG repatedly and gave oxygen for several hours for no reason.He was kept in the ICU of the hospital for 4 days and finally they told us to take him to Mangalore for further treatment.Hospital charged Rs 15,000 without patients recovery.Though the hospital could make it cashless,they didnot for reason best known to them.If one has to spend Rs 15000 for simple abdominal pain,how much one has to spend for critical illness?

  • praveen, mangalore

    Thu, Apr 08 2010

    there is lot of truth in what is said here. finally it is all about ethics and conscience of evry individual. doctors should not overcharge because it is an insurance patient.but fact is insurance payments to doctors take almost six months to materalise. also patients are equally responsible when they request to be shown as admitted for claim purpose while they re not.coming t question of paying tax again it is conscience in any profession where there is cash transaction there is lot of scope for evading is each individual's ethical standard that s it.

  • Ronald Tauro, Mangalore

    Wed, Apr 07 2010

    Excellent facts are given in this article. Thanks to Florine and also to Daiji for displaying it to us. I am afraid if this trend of duping the insurance company by so called doctors and Nursing Home continues... How could the Health Insurance company pay to the people who are really in need of health Insurance? Recently

    I was told by one agent that except LIC health Insurance all other health insurance companies are facing problems to pay their insured people. Today after reading this article I believe what he said was true and this is due to the malpractice of the medical profession and Nursing Home. May the good Lord give them some wisdom so stop such malpractice.

  • Joe Gonsalves, Mangalore - U.S.A.

    Wed, Apr 07 2010

    Florine of Daiji has indeed taken a lot of trouble to study and report on the malpractices by a part of the medical profession. It is unfortunate that the noble medical profession should have recourse to the kind of practice as reported by Florine. In the U.S.A. and other advanced countries the fees are all fixed by a panel and doctors are not permitted to charge the patients in excess of the prescribed amounts.

    Having said this, it is difficult to generalize the systems followed. For instance I know Father Muller's Hospital and Medical College where standard rates are charged and I do not think any of the doctors at this Institute would stoop down to any kind of unethical practices.

    In the context of what I have said it is expedient that The Government steps in and appoint a panel to fix the medical fees and also make it mandatory for people to get themselves medically insured.

    Joe Gonsalves

  • Patrick R Braggs, Bejai,Mangalore

    Wed, Apr 07 2010

    Excellent researched and informative article Florine.Thank you DAIJIWORLD ,always ahead.You can trust a theif but not a Lawyer and a DOCTOR.You definitely need a second opinion to believe them.

  • adshenoy, mangloor

    Wed, Apr 07 2010

    "Private health/Medical Insurance" is a big commercial business starting from America. Obama's health reforms may somewhat provide health insurance for over 40 million Americans who do not have coverage nor they can afford in the current health insurance run by insurance companies. Its a ligalised racket.
    This type of medical insurance is penetrating into India in a big way because money to be made here as commercial medical insurance by private insurance providers. What India nedds is a nationally run medical insurance system with private sector involvement.
    Unless the government gets involved this medical racket will only cost the lives of the poor people and the affordabe can access care and treatment.
    Public /private partnership and ethically run health system is a must for India. Without it there cannot be health for the people who need the most, the poor and downtrodden.

  • kumar, mangalore

    Wed, Apr 07 2010


  • E.J.DSouza, Bangalore

    Wed, Apr 07 2010

    Article indeed, gives a true picture of the sorry state of affairs as regards Health Insurance claims. This can be the main reason for the Insurance companies dealing with Mediclaim/Health Insurance, suffering losses. Hope all those involved in the malpractices realise their folly and not misuse the hallowed principles of Insurance which are a boon to the majority, in these days of expensive medical treatment.

  • Naveen Rego, Mangalore

    Wed, Apr 07 2010

    In these days of rising medical costs, i feel medical insurance is a God's Gift to all of us. As benefeciaries these are the simple things one need to take care: a) don't allow the hospital/ doctor to charge more b) change the hospital /doctor if they are discriminating c) inform such violations to insurance companies so that the said insurance companies can blacklist such doctors/hospitals.

    I believe it is our personal responsibility...lets be seriuos about it...

  • Syble, Manglaore, India

    Wed, Apr 07 2010

    You have revealed the true facts Florine. One of the doctors told me the hospitals presurrise doctors to send the patients for a fixed no of tests though not required. The hospitals have only charitable Institution boards. I feel that charitable word should be replaced by commerical, atleast people think twice before entering into such hospitals.

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