Procedures like angioplasty will not be limited to tier 1, tier II cities: Dharminder Nagar of Paras Healthcare

On February 15, Union government fixed a cap on the maximum retail prices of cardiac stents. The motive behind the move was to minimize the huge difference that existed between the price that the patient pays, and the price at which the manufacturer sells the stents. The government wanted to kill the practice of exorbitant trade margins, enjoyed by intermediaries like the doctors and the hospitals through a price ceiling. Dr. Dharminder Nagar, Managing Director of North Indian hospital chain Paras Healthcare, speaks to Business Today on the implications of ceiling price on stents on healthcare industry and the patient. Here are some excerpts from the interview.

BT: What is your initial reaction to the government decision to fix ceiling price for cardiac stents?

Nagar: The patient side is going to benefit tremendously. Price transparency will be there now, as everybody knows what it costs. Patient will pay exactly the same amount of money across organizations. Also, I believe accessibility will increase. Angioplasties will not be limited to tier 1 or tier II cities. You will see more procedures like angioplasties taking off in more cities.

BT: What does it mean for the hospitals?

Nagar: For the hospitals, the economics will have to change. Most hospitals have partially been relying upon the margins on stents to subsidize the procedures. Despite continuous increase in the overall costs like the doctor fee, the hospitals had not bothered to change the pricing dynamic of the procedure for a long time. Since, stent pricing was bringing the margin, overall package was making sense. Hospitals like ours, that have more control over their costs or are frugal or cost conscious in terms of their deployment of resources, will benefit. They will protect their margins. An expensive hospital, where the costs are already high may find it difficult.

BT: Stent manufacturing companies perhaps will continue to get more or less what they were getting earlier. How will it impact them?

Nagar: The most expensive ones may not remain in the market. Earlier, the patients had a choice to opt for a less expensive stent or a more expensive one. Now, they will not have that choice as companies may not find it feasible to sell a stent that was costing Rs 180,000 for Rs 30,000.

BT: Do you blame the government?

Nagar: No. I know they have gone the other extreme. But it was a major problem. Unscrupulous guys and non transparent behavior had created it.

BT: There is a feeling that the not all the six lakh plus angioplasties that happen in the country in a year are needed. Some say that the stent margins were tempting hospitals to suggest angioplasties even when it was not required. Do you agree? If so, will the curb on stent pricing freedom end such unethical practices?

Nagar: Let us assume that that was the case, and say, 25 per cent was unnecessary.  But still 75 per cent angioplasties were required. We are the diabetic capital of the world. We are prone to heart ailments. I hope that this will discourage the unscrupulous elements. We give our doctors fixed fees. You do five angioplasty, or you do 50, salary remains the same. The reason they are on salary is that we want to prevent that kind of behavior.

 

The writer is Managing Director at Paras Healthcare