India's Diagnostics Industry
Test Pricing and Referral Fees
How test prices vary widely between labs, why some doctors receive referral commissions (cuts) from labs, and why this is unethical and banned.
Test prices vary widely.
Price differences
The same test can cost very different amounts at different labs and hospitals.
Referral cuts
Some labs pay doctors a commission for referring patients, called cuts.
Harm
- Patients may get unnecessary tests.
- Costs rise.
Rules
The National Medical Commission bans doctors from taking commissions.
Information gap
Patients can’t easily judge which tests are needed: an information asymmetry.
Price caps
Some states cap prices for specific tests, like COVID RT-PCR tests in 2020-21.
A doctor orders an extra scan partly because the lab pays a referral fee.
Referral cuts can lead to extra tests.
- Test prices vary widely.
- Some labs pay referral cuts.
- Cuts can lead to unnecessary tests.
- Commissions are banned.
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