Penny Pinches

Why do life saving procedures cost a bomb? The rising costs of quality healthcare pinch hard, especially when given the general income levels in the country. While choosing where you want to get treated, knowing what you are paying for can make the decision less painful. From an individual's point of view, it is prudent to know why some hospitals charge more and some less, before deciding where you want to go under the scalpel.

The ET Healthcare Survey examiners the various procedures to get an idea of who takes what from the hospital bill. For this purpose, we have looked at the major cost components.

Fees for surgeons and the costs of consumables together account for almost half of the total costs. Room rents and charges for the operation theatre together account for 25% of the total costs. It has also been seen that the maximum variations across hospitals are in the costs of consumables and room rents. While the story on geographic variations will tell you which cities are cheaper to get operated in, here you will get an idea of how to zero in on the best hospital.

The proportions given in the table are the averages of those charged by a sample group of hospitals covered by the survey. For the cardiac procedures, we considered bypass surgery and angioplasty. For the non-cardiac procedure, we have considered laproscopic cholecystectomy, cesarean delivery and normal delivery.

One conclusion is that the proportion varies significantly with the procedure, since fees for surgeons and costs of consumables are different. In the case of cardiac procedures, the costs of consumables assume substantial proportions, especially in the case of angioplasty where it accounts for more than 40% of the costs. This is mainly because of high cost balloons, catheters and injections to remove clots, used in the process. These items are mostly imported and are expensive.

For example, a balloon costs anywhere between Rs 30,000 and Rs 70,000. Costs of consumables vary widely across hospitals, but we are not in a position to ascertain the exact reasons. One explanation is that some hospitals use reusable balloons while others use disposable ones.

The surgeon's share is understandably large in all the procedures. It is a huge variable element, depending on the location surgeon's skills and demand for his services. This is applicable in both cardiac and non-cardiac procedures. It should be noted that the surgeon's fee here excludes charges of visiting surgeons, which are substantial in the case of cardiac procedures, especially bypass surgery.

Even in the case of an in-house surgeon's fees, there are big differences across hospitals. The Wockhardt Hospital and Heart Institute, Bangalore, Charges Rs 12,000 as surgeon's charges for cardiac bypass surgery. Hospitals like Woodlands in Kolkata and the Lilavati Hospital in Mumbai charge more than double of that amount.

Unlike the costs of consumables and surgeon's fees, which are specific to each procedure, room rent is used as the universal parameter to measure how expensive a hospital is. The survey reveals that room rent is not the best parameter to decide which hospital to get operated in, as room rents, on an average account just 12.6% of the cost of the whole procedure.

Hospitals have been trying to keep this cost low by reducing the average length of stay. Certain protocols followed in diagnosis, the use of high-end technology (like non-invasive surgical methods) and strict focus on value addition during the patient's stay are various steps taken by hospitals to reduce the average length of stay, according to Anupam Verma, director - administration, in Hinduja Hospital, Mumbai.

For most of the surgical procedures, it can be seen that operation theatre charges (excluding consumables) and ICU charges are as significant as the room rents. Operation theatre charges, in general, range form Rs 1,500 to 3,000 per hour, depending on the hospital.

Apart from the major components mentioned above, there are many other miscellaneous costs, which hospitals ends up incurring as a part of all the procedures. Laboratory costs, fees for the anaesthesiologist and  admission charges are some of them. Thus, it can be seen that instead of focusing on room rents or miscellaneous charges, patients should be asking questions on surgeon fees, costs of consumables and OT charges. Add these costs and that of an external surgeon, and you have a chart ready for comparison.

[Economic Times dated 02/01/2004]