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Foundational Faults and Flaws Within Corporate Policies of Medical and Healthcare Providers in India

Government legislation has allowed medical and healthcare corporations such as hospitals and clinics to pay, central and state wise collected service taxes, only on a maximum of Rs. 50,000.00 per business transaction with a consumer. This legislation for a cap on the value of each business transaction of a healthcare corporation was implemented as an incentive for entrepreneurs to build and operate new enterprises within India's medical and healthcare industry.

In my humble opinion, existing and new corporations operating within the medical and healthcare industry, need not be given that tax incentive anymore because:

a) Domestic and international demand from consumers for medical goods and services supplied in India, is sufficiently large and robust to support the sustainable growth of the Indian medical and healthcare industry through existing consumer purchasing power.

b) Numerous corporate entities within the medical and healthcare industry have abused that incentive causing an annual, excise and income-tax revenue loss to the Central and State Governments in India, at the rate of tens of Crores of Rupees per city per month, across India.

Let us now discuss the various ways in which certain privately owned and operated healthcare providers such as hospitals, clinics and medical diagnostics labs in India, have been abusing the excise duty and taxation system of Central and State Governments.

1. Adding hidden costs, surcharges, and other unnecessary fees on the bill

   Certain corporate hospitals and clinics have been adding extra costs and fees by performing unnecessary medical procedures on patients, so as to increase the billed amount to become greater than Rs. 50,000.00 per business transaction with a patient. The final billed amount also includes hidden costs and variety of illegitimate surcharges in the post-paid bill which, are suddenly sprung upon the unassuming consumer after the unfairly charged goods and services are said to have been "rendered in good-faith."

2. Not providing a proper and fair invoice to the paying customer, for exploiting tax loopholes

   A "Provisional Bill" or a "Final Bill" given by a medical goods and services vendor to a consumer, is merely a memo and not a contract, because it typically does not have any Terms and Conditions (T&C) of a binding contract. However, an "Invoice", especially a "Commercial Invoice", is a binding contract between the consumer and the vendor because it has T&C that explicitly define, by when and how, the consumer is to fulfill the stipulated payments to the vendor, in consideration for the fairly charged goods or services rendered by the vendor, as per the consumer's and the vendor's agreed upon and expected quality of the business transaction. The T&C conveyed through an invoicing mechanism establish the rights, responsibilities, and liabilities belonging to each of the stakeholders that are a party to the business transaction including third-party supplier and regulators. As such, vendors or suppliers of commercial goods and services can circumvent the legal ramifications of statutes concerning their promissory and contractual obligations, to a consumer or a customer, by avoiding an invoicing mechanism in their commercial operations, while taking undue advantages of naive consumers.

3. Destroying or altering a cash bill, or modifying financial and inventory accounts after a sale, for tax evasion

   This is practically a perfect crime being committed by various corporate entities that do not use a proper invoicing mechanism, especially in the pharmaceutical, medical and healthcare industries where large cash amounts are directly paid by the consumer to the goods and services provider. The procedural steps of the crime include:

   1. Billing a customer an amount greater than Rs. 50,000.00 with variety of fake or increased quantities of line items, and using a cash memo or a "Final Bill" without a proper invoice.

   2. Then happily collecting cash from the naive customer who pays the billed amount without disputing or being able to dispute the billed amount.

   3. Giving the customer a "Cash Receipt" generated as a hand written copy or a printout from a computer software.

   4. Destroying or modifying the merchant's copy of that receipt, so that the billed amount and the inventory registers conveniently match, to reflect an amount valued lower than the actual amount (and ideally lower than Rs. 50,000.00) per altered sales receipt.

   5. Siphoning and stashing the unearned cash income or laundering it, via shell corporations, or international tax havens, or other common methods of cheating and tax evasion.

   6. Being perfectly content and confident that the customer any ways won't report the Customer's Copy of a receipt to any government agency; while also relying on the fact that most investigative agencies do not have the incentive or the means to search for all of the Customers' Copies of a merchant's receipts, especially for any cash transactions that aren't conducted as Business-to-Business (B2B) sales through a traceable electronic medium.

   7. Further relying on the fact that lawyers, accountants, and other "fixers" will take care of any legal actions taken by a government agency for discrepancies in a corporation's accounting and trade practices.

4. Deliberately and selectively targeting employees and retirees of Central Government of India to deprive them of Central Government Health Scheme (CGHS)

   This method directly attacks the socio-economic and physical well being of only the families of employees and retirees, of public sector entities affiliated with or belonging to, the Central Government of India. By depriving qualified Indian residents of their rights and privileges to avail CGHS, certain corporate hospitals and clinics force those consumers to pay the full amount of overpriced medical goods and services in cash, out of the consumers' pockets, especially because those consumers typically do not have any other form of health insurance coverage. Moreover, any persons who apply for reimbursement from their existing or former employer (belonging to the Central Government), cannot simultaneously apply for private healthcare insurance cover for those healthcare costs, due to existing rules and regulations of the government.

   Also, Central Government retirees including those from the armed forces are, believe it or not, soft targets who usually do not have the financial means to take up legal battles against massive, private corporations, especially when the Head Quarters or holding companies of those corporations are registered outside of India in places like Delaware, Singapore, Paris, Dublin, or Dubai.

5. Price fixing and market manipulation through collusion between private healthcare providers and their state run Medical Boards or Councils

   This is where certain state government entities such as Consumer Forums, and Medical Boards and Accreditation Councils get involved in dipping their beaks and toes into the bubbling pool of corruption. The unfairly charged price through rent-seeking behaviors of corporate bosses for accommodating patients within single rooms versus shared rooms in hospitals and clinics, is decided via the "invisible hand of the market", across corporate hospitals that span multiple cities in practically every state of the country. That invisible hand, also happens to wear medical-grade gloves to do its dirty deeds without leaving any finger prints.

   It should be noted that such rent-seeking behavior of private corporations in the healthcare industry is utterly illegal and unlawful, because patients within hospitals and clinics are not renters or boarders or holiday visitors. And those hospitals and clinics are not hotels, motels, lodges, hostels, or any other type of an establishment where a "renter's or boarder's agreement" would be applicable.

   Of course, every now and then, the market manipulation tactics of corporate bosses gets a little too heavy handed and sloppy, while leaving quite a few "angry young men" bruised and very unhappy. Simply licking those wounds and wallowing in self-pity isn't the mode of operation of such angry young men to obtain long-overdue justice.

6. Using methods of organized crime syndicates to hold captured patients, dead bodies, or biological samples as leverage against subdued consumers

   The corporate policy of not discharging the patient or a dead body from a hospital's or clinic's premises, until and after the complete payment for the healthcare provider's goods and services have been cleared by the patient, or by the patient's next-of-kin, is faulty. This is because such a systematic corporate policy directly leads to a situation wherein the patient (or a corps or a biological sample) is opportunistically held captive under confinement, by the healthcare provider's coordinated management and staff within the corporate organization's building, as a chattel or as a piece of collateral property, in order to exercise leverage over the patients' next-of-kin for extracting payments for various healthcare goods and services. Those healthcare goods and services in turn, may or may not have been administered correctly or priced fairly, by the medical or healthcare provider.

It can be seen that, especially in the healthcare and pharmaceutical industry, where the life and limb of a patient or a care-recipient are at stake, the fair practice of furnishing a proper invoice to a consumer would rightly respect the patient's safety and wellness as a priority, while giving the patient and the next-of-kin or the guardian, the rightful opportunity to have a fair remedy to any disputed or unfairly charged items, when required. A proper invoicing mechanism would simultaneously preserve the corporate rights, responsibilities, and indemnities of the supplier of healthcare goods and services. In this way, the healthcare goods and services sold by a mercantile establishment in earnest and good-faith to consumers through invoicing, would allow the hospital or healthcare provider to receive a fair sales price and revenue, from properly serviced and satisfied customers, whereby those consumers would honour the terms and conditions of the invoicing mechanism, also, in earnest and good-faith.

In conclusion, the existing legislation that puts a cap on the maximum taxable income of healthcare providers, must be abolished right away via executive orders from the highest competent authority in India, in order to protect the public from such an easily abused and harmful legislative policy.

Also, particularly in reference to the organized crime of holding a person captive as a chattel or a collateral property, one ought to know that:

If Ravana had opportunistically held Lord Rama's mother, Queen Kaushalya as captive, to gain any kind of a leverage over Lord Rama or King Dashratha, then Ramayana would have been a completely different narrative with Ravana and his horde of imps throughout the globe begging to be killed, and Lords Rama as well as Shiva, not gracing them with the mercy of death.

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