Health care industry needs self-regulation: Fortis Healthcare CEO

Bhavdeep Singh, CEO of Fortis Healthcare
Private health care chains have come under attack in the backdrop of recent lapses and errors. There have been allegations against them earning astronomically high margins on consumables. Bhavdeep Singh, chief executive officer at Fortis Healthcare, spoke to Ajay Modi & Veena Mani on recent allegations and said private hospitals needed to follow self-governance and there was scope for improvement. Edited excerpts:

How is the environment within the company, given the recent incidents?
It is unfortunate. Doctors were once considered as gods, and we have come to a stage where words like murderers are being used for them. A study was done recently in the US that said Indian doctors are some of the best there. But in India, we want to put Indian doctors in jail. That is an irony. I grew up in the US and there is no difference between Indian doctors here and those practicing in the US. 

What will be the fallout of these events?
Besides the incidents in Delhi, a doctor in Kalyan (Maharashtra) was badly beaten up for the death of a patient. Let me tell you what we are headed for. In 10 years, we won’t be having doctors from this country. Who would want to be a doctor in this environment? We have a massive doctor shortage already. One of the top five causes of hospital deaths in the US is medical error. Here, we put them in jail for deaths and beat them up. Our doctors anecdotally are saying that they are asking their children to get out of medical schools. Data will show it soon. There is no respect left in this profession. Today, doctors fear to admit and treat critically-ill patients. An incident similar to Max happened at government-owned Safdarjung Hospital in June and nobody talks about it.

What do you consider a fair margin for hospitals? Should margins be capped?  
Fortis lost over Rs 100 crore last year. Greedy is when you make Rs 100 crore and want to make Rs 200 crore. When you are losing Rs 100 crore at PAT level and want to lose Rs 80 crore that it not greedy, it is survival. Our operating Ebidta is four-five per cent. Health care is not one of the most profitable industries by any stretch of imagination. Government pharmacies are making margins of 500 per cent on similar items and nobody talks about it. The government can choose to cap all margins if they want but then we have to ensure the business works. If the health care industry does not give returns, nobody will invest in it. I am personally in favour of a margin cap. It is good. But it has to enable investors to invest. If the industry does not give returns, nobody will invest in it. Without investments, technological advances will not be possible. For a new hospital the cost per bed is Rs 1.3-1.5 crore and for a 200-bed hospital you need Rs 250 crore. If I cannot earn Rs 40-50 crore a year, where is the case for investment. 

Are doctors given targets on surgeries, etc?
I have never had such a conversation with any of our doctors. I don’t ask how many patients they see. We track every surgery done but it is up to a doctor to decide on the surgeries he/she needs to do. We have a separate team to market the brand. We do not need the doctor to do that.

Where has the industry gone wrong? 
We need to establish self-regulation or oversight mechanism. We need to have some thresholds and limits. Nobody talks about the free or discounted treatment Fortis has done. Since 2000, Fortis has provided free or discounted treatment of more than Rs 100 crore. Even in baby Adya’s case, the team decided to prescribe less expensive medicines when they realised her stay would be long. We are still being accused of administering more expensive drugs. We need to do a better job in communicating. 

Is there a trust deficit among hospitals, the patients, and the government?
Unfortunately, this is a vicious cycle and there is trust deficit everywhere, on all sides. That takes time. We have to take a step and work with each other. We haven’t done well as an industry working together. The industry has to collectively work towards portraying what happens inside the hospital. 

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