Stent Price Cap Turns Away The Rich Patient On Whom Healthcare Survives: Devi Shetty

The cost of stents has obviously come down in the country. That's a great thing. You now get a United States Food and Drug Administration-approved stent for Rs 30,000, which is great. Of course, we are worried that the high-end stents – third generation and fourth generation stents – may not be available in the country for a long time. This is our apprehension. Certainly, we don't expect any new stents to be introduced in the country unless there is an opportunity for the companies to charge more.

There is a provision in the law that the government has created, that under exceptional situations – where some new product that comes out with better results – they will re-look at the pricing. This is not a closed chapter. They have kept a window open to look at a different category of pricing for the fourth generation and high-end stents.

The patients who have coronary artery disease are getting a mechanical product being put into the most vital part of their body. These companies have created a brand. Whether they are superior or inferior medically, patients trust U.S. FDA-approved products, especially the knowledgeable, educated people. There is a price attached to it. Today, if that product is not available, they feel that sub-standard treatment has been given. Treatment outcome is not entirely dependent on opening the artery and retaining the vacancy. Psychologically they will be thinking that they got sub-standard treatment, and that may not be the best thing for a patient. We should give the patient the option of what they want to have. Right now, there is some constraint, but I am convinced it will be addressed shortly.

There will definitely be quite a bit of unhappiness among the educated class. Whether they go to court or not, I'm not sure.

If a foreign company doesn't want to sell, you can't force it to. The current regulation says that for six months, they can't withdraw the existing stents. If the multinational companies are losing money, they will obviously not sell it for a long time. There will naturally be a disruption in the supply side.

This is something new, so everybody is learning. We have to give time to the industry, the government and the consumer to understand each other in this new ecosystem. One thing which is a reality is that the government wants to ensure that essential services are available at a price that people can afford. Earlier the government was only talking about it, but this government has started asserting itself, saying that it has to be done. Fair enough. But in this new ecosystem, it can't be a zero-sum game, it has to be a win-win for everybody. I am optimistic that these things will get settled in a very short period of time.

I'll tell you exactly how the industry runs. The first patient I operated on in Kolkata paid Rs 1.5 lakh for a bypass grafting – the prevailing market rate – 26 years ago. Today, the same surgery is done with better results, for Rs 1 lakh. Did that happen because of government intervention? It happened because of market forces. Today, no patient in the country is sent away from the hospital because he couldn't afford a stent. Hospitals did put a stent and he did get a procedure. For the price that the government is asking for, there are stents available and the procedures are done. But there is a group of people who are willing to pay a premium to get the kind of brand that they want. Today, that is not available. Now, for the survival of the healthcare industry, you need those clients. They are the ones who compensate for us to do a heart operation for Rs 80,000 or Rs 1 lakh. You cannot run a hospital on heart surgeries at Rs 1 lakh. But 30-40 percent of the patients will pay Rs 1 lakh, the rest will pay the premium and with that, we offset the cost. It is exactly like any other market. Unless the rich people walk into the hospital, no private establishment will be viable. I get all the glory I do doing heart surgeries at Rs 80,000… Who is paying for it? I am not paying for it. It is the rich people occupying my deluxe room, they pay me enough money to compensate for the losses I am incurring in operating for Rs 80,000 or Rs 1 lakh.

Yes, the entire industry. We have to realise that 80 percent of tertiary health care – a heart operation, advanced cancer treatment, or a brain operation – is done by the private sector. If that has to grow and sustain, you need rich people who are willing to pay a premium for whatever service they want.

There will be a dip in realisation per procedure, as long as they follow the country's law. If they don't follow the law they can manage it, but most hospitals do follow the law, and will definitely see a dip in revenue. I guess that, over a period of time, the hospitals will have to rebalance themselves.