Fee For Service: Approaching Trouble for Patients and Doctors?

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A private hospital in Kolkata has recently announced that it will be paying “Fee-For-Service” (FFS) to most of its doctors instead of giving them monthly salaries. The “fee- for -service” regulation essentially means that the doctors of the respective hospital will be paid based on the number of patients they treat.

This move has been taken by Medica Superspeciality Hospital in a bid to bring down costs by rationing human resource expenses, consumables and operational costs, reported The Telegraph.

The daily further reported, “Many other private hospitals in the city said they had either opted for a similar arrangement or were planning to do so, to cut costs.”

Doctor’s dilemma

The move has raised eyebrows across the medical fraternity. Some doctors believe that the introduction of such a mechanism would end up hurting them by reducing their income levels. Speaking to Hind Kisan Dr. Girish Tyagi, Secretary, Delhi Medical Association said, “Such moves lead to the exploitation of doctors in the hands of private hospitals as they are the ones who decide the fee rate.”

Dr. Alok, Attending Consultant Cardiology, Venkateshwar Hospital pointed out, “Such mechanisms are feasible for hospitals which receive more than 100 patients in a day, but it would seriously impact the income of a doctor in case of hospitals which receive less than 30 patients.” He also underlined, “without a fixed salary, a doctor might lose his commitment to the hospital.”

Both doctors went on to demand a ‘minimum fee’ on a monthly basis, as it would provide a bit of certainty of earning a minimum income in the face of an otherwise uncertain fee earned per patient.

Presenting an alternative perspective Dr. Sushil Agarwal, Director of Recovery Nursing Home, Kolkata pointed towards the income disparity in private hospitals, “The monthly salary structure in a private hospital only benefits the veteran doctors who constitute the creamy layer and the junior doctors often get a salary much lower than them.” He further added, “Fee- for- service rule would be all inclusive, so far as benefits are concerned, as it would reduce the cost of treatment for the patients, reduce human resource expenses for the hospital and provide a service based salary to the doctors.”

Dent in the fortunes of Private hospitals

Private hospitals have been raising much hue and cry over their falling revenues over the years and claims that moves like FFS are need of the hour for them.

The Telegraph quoted Alok Roy, chairman of the Medica saying, “The earnings have gone down significantly in the last one year because the number of patients paying cash has gone down and those under several health schemes has gone up. We are struggling to meet the operational costs and so had to take the harsh decision.”

Representatives of the private healthcare industry have also raised concerns over government interventions hurting their numbers. “More than half of the beds are occupied by patients covered under health insurance which have fixed rates for each treatment procedure, leaving a very thin margin for hospitals to make a profit from”, pointed out The Telegraph.

These medi-claim policies compel the private entities to charge much less than what they do in case of patients who are not medically insured. The Telegraph quoted a surgeon, “For instance, the doctor’s fee for breast cancer surgery under a government health scheme is about Rs 7,000, with an average of Rs 30,000 otherwise.”

With the Centre mulling to make medical visas mandatory for patients from abroad, the state government planning to cap the treatment fee for private hospitals, the fortune of private hospitals remains vulnerable.

However, this is not to forget that off late many private hospitals have been found indulging in various malpractices. A recent study had found that four private enterprises in Delhi-NCR were making profits of up to 1,737% on drugs, consumables and diagnostics even as these three accounts for about 46% of a patient’s bill.

In another unfortunate incident which grabbed the headlines, a seven-year-old girl died of dengue at Fortis Hospital, Gurgaon and her parents were charged with a bill of a whopping Rs 18 lakh, including charges for 2700 gloves and 660 syringes.

With the income of doctors now being based on the number of patients they treat raises concerns of increased unethical practices, as the doctors might solely focus on increasing their patient base without bothering about the quality of service.

Photo: blogs.worldbank

Another blow to patients

As private hospitals in India ponder over moving Fee-For-Service (FFS) model from monthly salary model, economists in the United States are raising concerns on FFS where it is the dominant physician payment method. Outlining the problems associated with the Fee-For-Service arrangements researchers’ point out that most such compensation schemes create incentives for physicians to order more, and different, services that might not be best for patients. It must be mentioned here that nearly 79% of the healthcare in the US is under the private sector.

“Doctors in private hospitals are as it is are bound to generate a certain amount on a monthly basis by extracting it from their patients, and with the introduction of FFS model, the doctors are more likely to concentrate only on the monetary aspect of their profession”, said Dr. Ankuran Dutta, founder of ‘Stop Medical Terrorism’, a campaign against negligence of private hospitals and doctors.

With researchers pointing out the flaws in the FSS model, it raises an important question as to how beneficial will this payment method be for the patients in the country and for the doctors alike?

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