Special Focus: How Seats Bought In Private Medical Colleges Make Healthcare Expensive In India?

If the alleged over-invoicing coal imports from Indonesia by power companies in one year by Rs 29,000 cr, and now investigated by the Directorate of Revenue Intelligence (DRI) impacts a consumer by Re 1 per unit, imagine the impact bought seats in private medical colleges by prospective doctors would have on patients.

The Times of India has reported that the value of the sold seats every year is around Rs 10,000 crore. The doctors from these medical colleges would tend to recover the investment as quickly as possible – Rs 50 lakh for an MBBS seat is no small change to be ignored – and that makes medical care quite expensive.


It can be argued that not all seats in private medical colleges are sold from quotas allowed by the authorities but when they start their practice, they set a benchmark in fees and ways for their peers who won their seats on pure merit. It is unlikely to be ignored. This sets in motion a chain of kickbacks for referrals as well as pathology tests.

Chances of finding anyone who thinks medical care in India is either reasonable in cost terms, or satisfactory in quality terms, are quite rare. It is more likely that they at least grumble about the state of affairs and feel quite helpless in securing any relief from unaffordable medical care. They just bite the bullet.

Medical insurance has not made it any easier because the same treatment costs at least 30 perpecnt higher if they involve cashless arrangements with health insurance companies. Even the drugs sold from within their own pharmacies are billed higher because they want to neutralise the cost of recovery of owed bills as well as delays.

How does that impinge on the insured? Quite simply he or she exhausts the insurance cover. Also, if corporates reimburse medical treatment of their employees and inform the hospitals to bill them directly, it is again on a model that earns higher revenue. Little wonder charitable hospitals are passé; profit-making Trusts have emerged.

It is not the generally assumed plain avarice of the medical professionals despite the Hippocratic Oath they had taken but the entire system which puts the sick at a disadvantage. It is, to start with, with the way medical education provides the first trigger to make money. Making money is not bad, but how is.

The Times of India has presented a disquieting picture where “the ‘market’ for medical seats (for MBBS degree courses) as a whole is in excess of Rs 7,300 crore even by the most conservative estimate”, and detailed how the transactions take place. When proceeds of post-graduate seats are added to it, it gets close to Rs 10,000 cr, per year.

That one sector, that too in ‘education’, should contribute to black money – hardly any private college is known to provide a receipt for such transactions – should be equal to what the entire outflow of black money was in 2010, as per the White Paper on black money in India should astound.

An astronomical sum spent to be admitted to a medical course naturally requires a quick and sure way of securing returns on investment. Since these doctors want to earn quickly means peers too fall in line and corrupt the entire system. That a degree is maybe also from a college which faked standards to the regulators to remain in business is another sordid aspect.

This is going to be a strengthening trend. Medical Council of India lists 215 private and only 183 medical colleges owned and run by the government, where, as we know, there are no seats for sale under any quota. This indicates a growing preponderance of the private colleges makes medical care an individual needs expensive.

And when did one hear of a new government medical college being set up when one does see private colleges coming up, mostly by those who are part of the ruling elite, being politicians, or influential individuals and groups. That is why the balance is shifting towards the private sector: there are huge profits to be made.

However, the ills in the medicare system are not limited to the cost of getting a medical degree. It includes the over or needless prescription of drugs because inducements from pharmaceutical companies. DNA had reported, “Currently, as many as 326 doctors from across the country are under Medical Council of India scanner on bribe charges.”

“150 doctors accused of taking hefty bribe in the form of cash, flats, junkets, or cars from some pharmaceutical companies to prescribe their medicines,” it reported, “were summoned” but in the process activated, some 30 “have not responded” to the notices. This could be indicating either scant regard for regulation or the belief that they can get off the hook.

There are other troubling aspects are the pricing of, say, surgeries in private hospitals where the bill is as per the standard of rooms occupied even though the surgery is in the same operation theatre by the same surgeons using the same procedures. This indexing ensures that those in general wards pay less but ones who preferred rooms pay more.

With clinical diagnosis almost a thing of the past, and the over-reliance on tests has spawned a huge industry. There are anecdotal evidence that patients are referred to pathology labs only if there are cutbacks and to ensure profitability for the pathology labs despite the hefty cutbacks, tests not needed are signalled which could be billed for.

The last straw which can break a back is the pressure from corporatized hospitals, which evade taxes by styling themselves as research institutions – most have their name with the tag “& Research Institute” –build pressure on the consultants to generate higher revenues. These targets can be realised only by targeting the patients, who else?