Surgeons’ Fees, Drug Mark-Ups and Kick-Backs: Black and White or Shades of Grey?

Healthcare costs have been rising exponentially; not just in Singapore but regionally as well as globally. While patients often have to bear the brunt of this burden, payers and providers are also feeling the pressure of what I think is an unsustainable business model that needs to be addressed. In the Singapore context, while the Government and regulatory bodies are doing their best to keep rising costs at bay, doctors in the private sector must acknowledge that they, too, play an instrumental role. Based on my viewpoint that now spans both the corporate and clinical worlds, I would like to share some of the sensitive issues that are truly complex problems I hear from all parties concerned. That is to say, not only from my patients, but also from payers, providers, big pharma and all other industry stakeholders. While the following list of topics is certainly not exhaustive, it is time we stop ignoring the elephants in the room and address what are some of our society’s, as well as our medical fraternity’s most complex problems.

Before I continue, I would just like to state that the opinions I share below are solely those of my own in my capacity as a practicing clinician. Furthermore, the examples illustrated do not reflect those of the medical fraternity as a whole but rather isolated instances.

Surgeons’ fees

As I rose from my chair in one of our public hospital’s private clinic rooms to greet and welcome in the next patient, I could sense the anger and frustration just from his expression. In walked a man in his fifties with multiple folders of various imaging modalities under his arm. He sat down, his eyes glazed, the man himself not too impressed with the genuine pleasantries I almost always exchange with my patients before getting down to the reason they are seeing me. “I have a ruptured Achilles tendon and was told I needed surgery.” I took the cue and politely asked him if he was here for a second opinion considering he had all these x-rays, ultrasound scans and even an MRI. Yes, an MRI, but that itself is a story for another day. Surprisingly, he was not. He went on to say, “I was told the surgeon’s fee would be $20,000.” Trying as best as possible to maintain an expression that did not reflect the thoughts going through my mind, I politely asked, “So you came here because you think the amount you were quoted was too high?” The man’s response surprised me. “No. What made me come here was the fact that after telling the surgeon that his surgical fee alone was too high and that I wished to go to a private clinic in one of the public hospitals, his immediate response was, ‘Well, how about $12,000 then?’”

While fishing for prices in the private sector is a difficult problem to solve, the concern with cases such as this, which do not reflect the practice of the majority of private practitioners, is that it reflects poorly on the medical fraternity as a whole and needs to stop. Having seen a number of private hospital bills of my own as well as my friends and colleagues over the last number of months, it is worrying to see surgeons’ fees slowly creeping up to what is sometimes 80% of the total hospital bill. This is often attributed to high rentals and/or sale prices; but it must also be noted that other costs are not coming down either to cause this phenomena. Do we need to revisit the stand on private healthcare being a free market versus one that is regulated by price guidelines that may or may not have to be followed? Despite the many arguments that allow one to play the devil’s advocate, perhaps it is time to do so. In my opinion, it really is simple. Why should private healthcare provision be any different from a shop, restaurant or car dealership when it comes to selling items and/or services? It isn’t really, is it?   

Drug mark-ups

As my wife approached the cashier of a private ear, nose and throat (ENT) clinic she visited a few years ago, she was told that the doctor had prescribed her a number of medications. Married to a doctor who was well aware of the varying prescriptive practices, she had been pre-empted by me to request for just the prescription. I was shocked to say the least when she informed me that her request was actually refused by the receptionist, after checking with the doctor. After some hard negotiating, she was given what was said to be a compromise: a prescription for some of the medications, and the insistence to buy the others as her husband was unlikely to have access to those. I remained calm over the phone on hearing this, and gave the benefit of the doubt to the doctor for having stock of oral and/or topical medicines that I did not have access to. Suffice to say, I was far from calm on my return home after work to find that these medicines I was “unlikely to have access to” were ones I often prescribed in one of the clinics I volunteered my time at. But what angered me the most was that while the clinic I worked at sold one of the topical medicines for $4, my wife had been charged $45.

Returning to the question I mentioned earlier: is there a need to revisit the stand on private healthcare being a free market versus one that is regulated by price guidelines that may or may not have to be followed? Should we, like some countries, separate the business of providing healthcare from the business of providing medicine? Now, having industry knowledge and having heard of the multipliers doctors employ to mark-up drugs they purchase from pharmaceutical companies to sell to their patients, with it seemingly being common practice of the multiplier even being up to 12, is this something that needs addressing? While I understand that there are costs associated with purchasing and keeping medicines in stock, including initial capital outlay, is it really right for clinicians to not only make money from the service they are providing, but on the drugs they are prescribing and selling too? And if so, while there surely is a conflict of interest, should the mark-ups at least be “reasonable”? When I walk into a shop and buy a soft drink can for between $0.80 and $1.20 most commonly, I am well aware that I can likely get the same can for $0.50 if I buy in bulk or wholesale and that is acceptable to me. Suffice to say, if the cost in the shop was $6 (multiplier of 12 applied), how many of us would accept that? And while some may argue that restaurants in fact do charge in the region of $6 for the same can, it must be remembered that in a restaurant the price is transparent but more importantly, one has a choice. With a number of articles having been published in the Straits Times by the public with regard to the cost of medicines from private clinics, the above is just some food for thought.

Kick-backs

My late father and orthopaedic surgeon, Dr Jimmy Daruwalla, and I used to often debate the pros and cons of referring patients for an imaging modality to a centre that gave kick-backs, in the form of a percentage of the cost of the imaging requested, to the referring doctor. Perhaps I should be clearer before proceeding. While I often debated the pros and cons, including explaining the fact that whether the referring doctor accepted the kick-back or not did not change the fact that the patient paid the same amount, my father never wavered in his opinion in that there were no pros in accepting a kick-back. To him, it was wrong – plain and simple. And his argument was as follows. If he referred a patient for an MRI that would cost the patient $1,000 if the patient went there by themselves but only $800 if the referral came from him, why should he pocket the $200 rather than pass on that discount to the patient? Again, while there are plenty of arguments for one to play the devil’s advocate, the one thing I saw in my late father’s way of thinking was this: at the end of the day, always put yourself in your patients’ shoes. Always act ethically and in the patient’s best interest, and be transparent. Then, and only then, will your patients be truly thankful.

I heard a Singaporean doctor say this many years ago: “It’s tough, this healthcare business. Or maybe it’s tough because we are treating healthcare as a business.” If we practise medicine by always keeping the best interest of our patients at heart and in a manner in which is best for them, we will see that the healthcare business will not in fact be tough but rather satisfying and rewarding. I must also add that this does not just apply to the clinical world but also the corporate when it comes to healthcare consulting. Let us remember that our profession is one of the few remaining noble ones. That each of us are the only ones who look at ourselves in the mirror each morning. Are there really shades of grey when it comes to surgeons’ fees, drug mark-ups and kick-backs? Perhaps there are, but there really need not be.