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To curb ‘cut practice’ in healthcare, Maharashtra, very recently, came out with a draft bill for The Prevention of Cut Practices in Healthcare Services Act, 2017 that promises harsh penalties for all medical practitioners involved in the practice of giving or receiving of cuts/ commissions. It states that “any healthcare service provider found guilty of involvement in cut practice shall he liable to be punished with simple imprisonment up to 5 years, or a fine of 50,000, or both.

This will additionally draw a suspension of 3 months from the respective council.” The draft proposes that if such an offence comes to light, the Anti-Corruption Bureau will be the authority that will Commenting on this welcome move, Dr. Vivek Desai, Managing Director, Hosmac India Private Limited, says, “Cut practices must go because it increases the overall cost to the patient. For example, if someone refers a cardiac case to a cardiology surgeon, that person is almost seeking 20-30 percent of the overall bill of the patient. If a patient spends INR1 lakh, then IN20,000-30,000 is paid out as referral fees. This is unnecessary. Why should a person be paid for referring? It is an unethical practice. In India, it is not just the doctors, who are referring patients; from ambulance drivers to porters at Mumbai railway station are involved in this process of filtering out patients, recommending hospitals to them, and getting a ‘cut.’ Ultimately, the hospital will charge the ‘cut’ amount to the patient increasing the overall treatment cost. Currently, this has only come out in Maharashtra but should go pan-India. It is a step in the right direction and should have been done a long time ago.

“Cut practices must go because it increases the overall cost to the patient”.


The reason why it does not happen in other countries, particularly the developed nations like the UK and the USA, is because there is a concept called ‘gatekeeper’ i.e. a person cannot come to a referral system by oneself. The patient is referred by a general physician, who is part of the insurance chain. The GP will first see the patient and then decide whether he/she needs specialist intervention. Hence, a referral fee is out of the question.”

Citing how Kokilaben Dhirubhai Ambani Hospital tried to overcome this unethical practice, he explains, “The hospitals appointed GPs as their channel partners. The patient first see the GP for which they are charged a minimal visitation fee of about INR1000 and only then they are referred to specialists. This is a legitimate practice rather than a back door entry to an INR1 lakh procedure for which the person who refers gets a cut of 20-30 percent.”

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