The 'Specialist-Entrepreneur' and the Business of Medical Care

The act of doctoring as undertaken by any specialist is beset by an information asymmetry that places the specialist in an advantageous position.

The NITI Aayog recently reiterated its 2018 proposal to open up existing district hospitals to the public-private partnership (PPP) mode – the latest in a line of government initiatives to privatise healthcare in India.

The people value government district hospitals for two reasons. First, people appreciate curative care more than preventive care. Second, people seeking secondary level care experience greater relief from their ailments than from primary level care because the former attends to more severe diseases. So good quality secondary level care builds more trust and creates longer lasting impressions relative to other services offered by the public healthcare system.

We need to examine efforts to privatise the services of district hospitals in this context.

In any society, privatisation in health care operates at multiple levels – from the provisioning of services to the ramifications of privatisation for the way medical care, especially ‘doctoring’, is organised. The former can be seen as the trigger for privatisation and the letter, the effect – although their relationship is often reciprocal and cyclical.

One of the challenges of strengthening secondary level medical care within the government is the shortage of specialists and their unwillingness to take on services within the public system. Historically, even after the number of specialists employed in public healthcare has increased, evidence suggests that it is difficult to retain them because of demotivation.

One reason for this is the failure to meet specialists’ expectations vis-à-vis salaries relative to the private sector. Another is low morale due to poor infrastructure in public-sector hospitals, especially in underserved areas.

The reasons for the shortage of health personnel in the public sector need to be examined relative to more attractive alternative options, especially when there is no shortage of personnel. In short, what features of the external environment attract the most-wanted specialists away from the public sector? Every specialist is thus accorded their own lifespan that factor in entry, work performance and exit from the profession. And it is during the performance stage that we need to pay closer attention to how specialists conduct themselves, especially in the private sector.

The specialist-entrepreneur in medical practice

Private medical care is widely available in India’s metropolitan cities, and such privatisation is now spreading to tier II and III centres as well. So the new policy to privatise district hospitals will as such catalyse this spread – bringing along unregulated commercial practices as well. For example, the changing nature of compensation of specialist doctors in corporation-managed hospitals has been a minefield of unethical practices in the private sector, and which has only been passively legitimised over the years.

Many private medical-care institutions have been known to cut corners and accept kickbacks; one practice that deserves more scrutiny is doctoring – the name for the process by which a specialist makes sense of a person’s illness and advances a diagnosis, and then proceeds to offer the corresponding treatment. A specialist doctors through the process of consultation, with or without complementary investigations.

The range and scope of these decisions will then determine the ‘package’ of medical care that a patient can avail for a certain illness. It is this medical decision on the specialist’s part, vis-à-vis the patient’s condition, that private sector medical institutions negotiate in the process of deciding how much the specialist should be paid. There are quite a few corporate hospitals that pay their specialists higher salaries while stipulating commensurate revenue targets.

Such practices also extend to surgeons, considering people in general know even less about surgical procedures and are liable to be overcharged on the specialists’ advice.

So the act of doctoring, as undertaken by any specialist as a function of their expertise, is beset by default by an information asymmetry that places the specialist in an advantageous position. And when such asymmetry presents the possibility of financial gains for the specialist or their employer, every specialist becomes through the act of doctoring a specialist-entrepreneur. It is this significant conflict of interest together with the distressing lack of regulation of private medical care that exposes doctors to opportunities to engage in unethical practices.

Regulating medical care

In the public sector, on the other hand, specialists worked for a fixed number of hours per day and based on which they are paid a monthly salary. There are no personal monetary benefits to be had, irrespective of whether they over- or under-prescribe tests, surgeries and/or drugs. That is, the very act of doctoring in a public healthcare facility is not exposed to opportunities for accumulating wealth. Time spent together with health outcomes matter more.

This is how public medical-care institutions around the world operate, and how they’re able to eliminate unethical practices from their workflow. This is also why external regulation of medical care becomes ineffective after a point. Put differently, any attempt to regulate medical care should alter the ways in which medical work is organised.

One of them is to separate all forms and quanta of payment to doctors – especially to specialists and super-specialists – from the number of people they consult with and the procedures they perform. To compensate, generalists, specialists and super-specialists may be paid differently according to the amount of work they do. Once such a system is in place, more doctors will prefer working in secondary level healthcare facilities operated by the government, and also obviate the need to privatise district hospitals.

Mathew George is a professor at the Centre for Public Health, School of Health Systems Studies, Tata Institute of Social Sciences, Mumbai.