Angioplasties shoot up due to price cap, says research on insurance claims

Did India's price control policy for coronary stents create unintended consequences? This is the question that researchers from four management universities sought to address by analysing nearly 26,000 insurance claims in Karnataka.

They found that the change in the volume of angioplasties per hospital per month after price control disproportionately increased when compared to the change in bypass surgeries. Angioplasties grew by 6% in absolute terms and 28% when compared to bypass surgeries before price capping.

The authors of the study Sarang Deo, Indian School of Business, Hyderabad; Hanu Tyagi, University of Minnesota, US; Chirantan Chatterjee, IIM Ahmedabad, and Himasagar Molakapuri, Carnegie Mellon University, US, published a paper on the same in Social Science and Medicine journal  Elsevier.

In February 2017, India capped the retail price of coronary stents. "Prior research shows that care providers respond to such regulations in a way that compensates for their loss in profits because of price control. Therefore, price control policies often introduce unintended consequences, such as distortions in clinical decision making," the paper says.

25,769 insurance claims under Vajpayee Arogyashree (now merged into Ayushman Bharat-Arogya Karnataka) from 69 private and seven public hospitals from February 2016 to February 2018.

"Disproportionate increase in PTCA (angioplasty) procedures occurred only among private hospitals, indicating the possibility of profit-maximization intentions driving the clinical choices. Such clinical distortions can have negative implications for patient health outcomes in the long run," the paper states.

Dr Devananda NS, HOD and consultant cardiothoracic surgeon, Manipal Hospital, said, "Randomised and double-blind studies like FREEDOM and SYNTAX have shown that bypass surgery is better than angioplasties in the long run but now since patients can afford five stents instead of one for the same price, hospitals where there are no ethics committees to watch, go for angioplasties instead of bypass."

Dr CN Manjunath, Director, Jayadeva Institute of Cardiovascular Sciences, said, "Although the stent price has come down, the angioplasty procedure cost remains the same in the private sector. If it is elective surgery, depending on the anatomy, if it is complex, we go for bypass. If it is less complex, we go for angioplasty."