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Patients pay as doctors follow corrupt ‘cut practice’

NewsPatients pay as doctors follow corrupt ‘cut practice’

Incidents of illegal commissions being offered to doctors or hospitals by fellow doctors or private laboratories for patient referral have become longstanding and widespread in the Indian healthcare system, experts told The Sunday Guardian. Commissions for referrals (colloquially known as cuts or kickbacks) have become commonplace. It is not uncommon for patients being advised unnecessary treatment under a false sense of health security.

There is often a close nexus among laboratories, hospitals and doctors, who indulge in such exercise in exchange for a certain commission to the referral physician. 

Talking to The Sunday Guardian, a senior medical professional from Maharashtra, Dr Himmatrao Bawaskar, who was also the first person to file a case against cut practice in Medical Council of India (MCI), claimed that over 90% of Indian doctors indulge in this practice.


In 2013, Bawaskar received an unsolicited cheque from a diagnostic centre, which he later discovered to be the “professional fee” for referring a patient to the centre for MRI. Since the patient had already paid the consultation fee to Bawaskar, Bawaskar returned the cheque, which was later reimbursed to the patient.

In another incident, a source, on the condition of anonymity, revealed: “My uncle was encouraged to offer ‘cuts’ to his fellow doctors so that he could ensure a steady flow of patients to his clinic, which he had opened just a year ago. His colleagues currently charge 30% of his consultation fee for referring their patients to him. There is a lot of struggle in the medical industry these days, especially when one does not come from a family of doctors.”

Experts agree that the cut-throat competition to establish one’s own practice while ensuring a steady flow of funds has given such misadventure a boost, as it benefits both the sides equally. Bawaskar said that such trend is highly common in cosmopolitan cities that have witnessed a spurt in the number of doctors, consultants, and general practitioners.“The current rate of such commission is 40% to 60%, meaning that that if the doctor’s consultation fee is Rs 200, then Rs 80 to RS 120 would be given to the doctor who referred the patient to him,” Bawaskar told this reporter. A neurosurgeon from Aurangabad, Dr Jeevan Rajput, told this newspaper that in private hospitals, doctors are assigned a target of getting patients referred to labs for multiple tests, so that they can enjoy a referral cut. 

“The pressure is more on a junior doctor, because the authorities know he will do it at any cost to save his job,” he said.

“Several doctors even hire public relations officers (PROs) to strike referral deals and move cheques around.”


According to Rajput, several doctors hire public relations officers (PROs) to strike referral deals and move around cheques. “A doctor would normally find it awkward to go about places and offer his services. The PRO agent goes to others to introduce the doctor’s services. He also maintains all the records,” Rajput added. Rajput further admitted to hiring agents himself; not to receive cuts, but to offer discounts to patients.

“A lot of doctors even pay off ambulances to take patients to a particular doctor or a facility. It is shameful, because all these times, it is the calculation that is running inside the mind of the doctor instead of the health of the patient,” he said. While the Medical Council of India, the national watchdog for medical education and doctors, completely bars “cut-practice” under the Indian Medical Council Regulation 2002, qualified practitioners and quacks and businessman continue to strike deals under the table.

“The laws in India against illegal healthcare practice are robust, but it is difficult to ensure their enforcement. Such incidents can be controlled through vigilance in big organisations or hospitals. But how do you crack down on two people discussing deals and passing cheques in an individual setting?” advocate Mahendra Bajpayee, an expert on medical laws, said.

The Maharashtra state government has drafted a committee to look for ways to curb commissions. The proposed bill, called Prevention of Cut Practice in Health Care Services Act 2017, is likely to be tabled in the Winter Session of the Parliament, and may invoke a fine of Rs 50,000, along with suspension of the defaulter’s license for three months. “The restrictions with the current set of rules are that they do not allow for action on any private organisation. The proposed legislation, however, will bring hospitals, maternity homes, nursing homes, dispensaries etc under scrutiny. Yet, the legislation will not curtail 100% of ‘cut practice’. But it will serve as a threat to the wrong doers,” Bawaskar, who is one of the members of the committee drafting the legislation, told this reporter.


In this under-the-table tactic, it is the patient who pays the price. “A lot of times the patient is referred for a treatment that is not required at all. At times he is referred to a doctor for a problem that can be better handled by some other doctor,” Rajput said. A senior resident doctor from Delhi said that patients are invariably at loss because a percentage of the cuts paid to the doctor or the hospital come from the fee which is charged by the patient.  Citing an example of swine flu, he said in the process of generating cuts, doctors and hospitals not only push costs, but create unnecessary scare by endlessly referring patients to pathology labs for tests. “The doctor’s consultation can extend from Rs 700 to Rs 1000. But a swine flu test costs anywhere between Rs 3000 and Rs 9000. So if a patient comes with minor symptoms of cough and cold, doctors order him to get a swine flu test done, which pushes up the costs of the patient. And swine flu is usually self-limiting in majority of the cases; so ordering such test may not be a good idea, especially if the symptoms are mild. Several studies across the world have conclusively established that generalised annual health check-ups are unnecessary and add enormously to healthcare costs,” he said.

“Also, if a patient is admitted in a hospital and is insured, his tests are covered mostly by insurance companies. So sometimes, if these tests are prescribed, patients deliberately get admitted in hospitals to get them covered. And hospitals are only too willing to comply because they mint revenue from admission and room charges,” the doctor added. 

Dr P.A. Kale, a cardiologist from Mumbai, said that “cut practice” exists, but he believes that its exact impact and prevalence is a matter of debate. “Each doctor follows different approaches to treat his patients. Whatever the approach is, irrespective of whether the doctor gets cuts or not, it is still very scientific in all the cases. The bargain of patients has not reached to the point of treatment dilution,” he said.

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