A tricky web of hospital referrals and cuts

I have enjoyed my transition back to Bengaluru, the city I carry very close to my heart. As I start meeting people and understanding local surgery referral patterns, the irregularities are glaring.

I have been blatantly asked by doctors how much I would be willing to pay the referring doctor for a patient. Take for example a patient who is referred for an advanced procedure that costs 10 lakhs. The referring doctor in Bengaluru asks for a percentage, commonly referred to as a “cut”. In plain words, a bribe. This is completely unethical and against the standards that doctors agree to stand by when they take their oath.

Section 6.4 of the Indian Medical Council (Professional conduct, Etiquette and Ethics) Regulations, 2002, or Code of Medical Ethics by Medical Council of India states it clearly:

6.4 Rebates and Commission

6.4.1 A physician shall not give, solicit, or receive nor shall he offer to give solicit or receive, any gift, gratuity, commission or bonus in consideration of or return for the referring, recommending or procuring of any patient for medical, surgical or other treatment. A physician shall not directly or indirectly, participate in or be a party to act of division, transference, assignment, subordination, rebating, splitting or refunding of any fee for medical, surgical or other treatment.

6.4.2 Provisions of para 6.4.1 shall apply with equal force to the referring, recommending or procuring by a physician or any person, specimen or material for diagnostic purposes or other study / work…..

The patient often gets referred to the Center that offers the highest “cut”—bribe! The doctors hardly focus on the quality of the Center, outcomes, expertise of the treating doctors.

The problem does not end with doctor referrals. Ambulances often take patients preferentially to hospitals that give them money – a bribe again! Patients are referred to diagnostic centres that offer a cut. The list goes on!

Patients need to see through this and need to be educated on how to research a doctor or a Center. Dear patients, look up for the doctor’s profile! Ask for a resume!

Primary doctors need good remuneration

From a systems standpoint, we need to improve the remuneration of primary care doctors so they do not feel the need to succumb to these unethical practices. I do believe that primary care physicians are underpaid and are sometimes forced to resort to these measures. I also know of some very prominent doctors in Bengaluru and outside who have used this as a vehicle to build an opulent practice. Unfortunately, the patient suffers—often sent to the wrong specialist and ends up paying more to grease the system.

Doctors and hospitals who hold their heads above referral fees are certainly disadvantaged. These folks have to look at improving quality, outcomes and patient safety—the right things— rather than paying other doctors for referrals. Think for a moment what disaster this noncompliance would bring to the finance or insurance industries? Those industries are highly regulated.

So how do we change this? In my opinion a few things are required.

  1. Increasing the pay scale of primary doctors so they don’t feel the need to engage in this behaviour. After all everyone is entitled to a good quality of life with a house, car, education for kids and a secure retirement.
  2. Creating a more robust monitoring system and reprimanding hospitals and doctors who violate compliance and ethical standards.
  3. Educating the patient. Teaching the public how to evaluate a doctor’s credentials.
  4. Creating a cashless system in healthcare so all transactions are accounted for.
  5. Incentivising quality and good outcomes.
  6. Urging the media to focus on systems issues and expose inadequacies at global level rather than targeting individual situations or poor outcomes.

At a time when a patient is vulnerable, it is indeed sad that a section of the medical fraternity uses referral fees as a way of garnering additional income. Let me stress again; all health care professionals are entitled to a good quality of life. They should be able to earn a salary that meets their needs, a salary that will make them shy away from kickbacks and cuts. Let us not taint the profession for unethical monetary gain; Let us focus on caring for the patient and build a system that will pay every doctor what is due to him or her the right way.


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About Govind Nandakumar 4 Articles
Govind Nandakumar is the Chief of Gastro-intestine, Liver, Colorectal Surgery and Oncosurgery, Columbia Asia Hospitals, Bangalore.


  1. The reason behind this, Doctors spend Crores to get degrees and specialization. So they have to get back their investment.

  2. I don’t think it is a matter of low pay for doctors. It is a matter of the values that you believe in. For many of us the more we get the more we want and very senior doctors can be seen indulging in these unethical practices… damn the oath! Moreover, what about hospitals… Having created fancy infrastructure they have to make money to keep it running and also reaping in a profit to show growth of their companies. So what do they do? Set revenue targets for doctors to achieve! Patients end up becoming cash cows to be milked! Insurance companies only aid this process. If govt. sector hospitals are bad, private sector is soon becoming worst!

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