http://timesofindia.indiatimes.com/india/Open-secret-Doctors-take-cuts-for-referrals/articleshow/37350397.cms

Before all of you go tut-tutting in self-righteous condemnation of those this article seems aimed to demonise, it would be worthwhile to go into a few oft-forgotten facts

1. Healthcare is not a service or sacrifice...it is an industry and an economic activity and more so in the private sector. Blatant hypocrisy by couching it under the guise 'social service' has gone on for far too long in this country.
2. Healthcare needs of more than 75% of Indians are met by the private sector and private institutions are preferred by most patients even for primary and secondary care as opposed to poorly managed, inefficient public hospitals bursting at their seams with patients owing to a  merit-last recruitment policies, budgetary constraints, poor salaries and a cornucopia of oft repeated reasons.
3. More than 80% patients in this country pay out-of-pocket for their healthcare and therefore are healthcare clientele or consumers rather than merely patients.
4. Setting up of a healthcare facility in an urban area requires massive investments and capital expenditure owing to high land costs, high import duties on equipment that has low levels of indigenity and human resource costs to provide services to an increasingly demanding clientele.
5. Permissions and licensing of healthcare facility is extremely arbitrary and even if they exist on paper, rules are blatantly violated allowing almost anyone with access to land and funds to setup a healthcare facility.
6. There is hardly any regulation and credentialing of healthcare facilities with regard to outcomes and their ability to offer high-end services from the governments and with low penetration of health insurance, it is a free for all in terms of competitive bidding, promotional activities and advertising to entice patients often looking for a better deal rather than a better service when it comes to their healthcare needs.

While the points above are by no means a complete list, it is important to analyse the origin of this condemn able practice of trading patients for a consideration to hospitals as if they are cattle or commodities.

Economic theory has often more to do with reality than morality in a consumerist society....which however much we may choose to deny, we have already become. Having made huge investments to offer facilities and infrastructure inadequately available or absent at public sector hospitals, private healthcare entrepreneurs are hard-pressed to recover the massive investments made because of the unregulated mushrooming of facilities clamouring for a slice of the pie of  paying patients. Government subsidised health schemes to decongest public hospitals and use under-utilised capacity in private hospitals are mired in red-tapism and impractical costings and therefore not much use in bridging the gap. In such a scenario, to recover their costs, private sector healthcare facilities are compelled to look for out-of-the-box solutions to increase their footfalls sometimes employing processes that could be frowned upon. When supply exceeds demand, it is a buyer's market and since reduction of prices would further harm their balance sheets, private institutions resort react by passing on part of the profits as an incentive or inducement to referring physicians. Once such a practice finds root, everyone is dragged into it to stay on the bandwagon.

Finally patients themselves need to be more discerning and not blindly follow a referral path suggested by their primary physician which I must hasten to add that this is happening already. By no means am I encouraging cynicism towards physicians, but  patients should stop being mindless and ask pertinent questions of their physicians regarding the plan of their management and referral and satisfy themselves to the greatest extent possible. 

The solution remains complex but it is high time we took steps in the right direction. I humbly suggest the following

1. Strict criteria should be followed while licensing healthcare facilities for performance of high end procedures and unregulated mushrooming of centres should be checked.
2. Rather that investing public money and duplicating high end capacity building in public hospitals, extra capacity in private hospitals should be utilised at a sensible price through well monitored schemes. This will help patients as well as reduce massive capex costs to governments while controlling this malpractice of incentives for referrals.

The above is by no means a complete list of solutions but is something that can be implemented without ruffling too many feathers. This will ensure in the intermediate term that referrals are guided by clinical needs rather than other considerations. 

Let me reiterate here that by no means am I condoning or encouraging the cut-practice system that has got stuck in a morass....this posting is merely an attempt to analyse the reasons for this rot. Acknowledgement of the problem is only part of the solution and not a solution in itself . It may allow one to be unabashedly self-righteous and score debating points on ethical forums but it, by no means, brings us remotely closer to a much-needed solution.