In a shocking revelation, it has been found that the Central Government Health Scheme (CGHS) is paying private hospitals double the cost of medical devices. This is because it failed to revise its price-approval list for reimbursements when costs of devices fell sharply around the world.
The CGHS last revised its price list in 2007. Since then, the prices of drug-eluting stents three fourth meshes used to prop open blocked arteries in heart patients three fourth have fallen to Rs 45,000 the world over, yet the CGHS pays almost Rs 90,000 for them.
This is more than what international best-selling brands such as Cypher and Xience charge for stents. They have priced them between Rs 35,000-Rs 55,000 and Rs 35,000-Rs 45,000.
Hospitals, which buy imported stents from distributors and charge CGHS the approved rates, are making, on an average, Rs 40,000 per stent.
Since CGHS claims it maintains no records of how many stents it pays for each year, it's difficult to estimate the exact loss this has caused the exchequer.
But with 1.5 lakh drug-eluting stents implanted across India annually and 30% of patients in private hospitals being government health-scheme beneficiaries, a rough calculation shows that the state exchequer loses Rs 180 crore (at Rs 40, 000 per stent) to private hospitals.
Most private hospitals charge patients between Rs 1.25 lakh and Rs 1.35 lakh for each stent. "Since CGHS pricing is often the yardstick for cost of procedures, charging them more for stents gives hospitals an excuse to artificially raise the cost of angioplasty, which is one reason why insurance companies refuse reimbursements for cardiac treatments," said a cardiologist from a government hospital.
"The six manufacturers approved by CGHS now offer cheaper and more efficient stents. CGHS, however, continues to pay more for old technology, which is not used in private hospitals," said a senior cardiologist from AIIMS.
"The third-generation Xience Prime, for example, is almost 38 mm long as compared to the CGHS-approved, which is only 28 mm. This forces doctors to use two stents for long blockages, which doubles the cost," said Dr Ashok Seth, chairman and chief cardiologist, Fortis Escorts Heart Institute.