Many investors invest in companies based on their own personal ethics .For instance, many will not invest in liquor and tobacco companies. Jains will avoid investing in companies which deal with non-vegetarian food.Muslims will invest in companies which are Shariah compliant and so on.
The hospital business in India run by Corporates is a relatively new phenomenon in India.
Any person who has the misfortune to visit them has his own dark stories about how they work.
The following excerpt from Rana Dasgupta’s Capital
exposes some of the darker secrets of hospitals:
“A leading surgeon left his job at the government hospital where I work to join one of the big corporate hospitals.
He was offered a salary of 2.4 Crores a year which has 10 times his previous salary, but it was dependent on him delivering 12 crores of revenue to the hospital.
Now,if he did the maximum possible of operations in a year, he still would not deliver 50% of that figure.So the rest had to be delivered by diagnostic tests.Which is why there has been such a huge escalation in tests.Patients are sent to do repeated MRI scans so that doctors can meet targets.Some patients have very high radiation exposure as a result of all this.
Anyone who has upper abdominal pain has their gall bladder removed.40% of these procedures are unnecessary.But the patient doesn’t know that.
Some of the most famous obstetricians deliver 70-80% of their babies by Caesarian.There is hardly a hospital in the city that offers natural birth service.Why?Caesarians make more money than normal births,of course, but more importantly they allow doctors to determine the schedule and to fit more women in.
Drug companies pay many oncologists 10% of the value of chemotherapy they prescribe.Cancer of the pancreas is a favourite, because if you get to the stage where you need chemotherapy you are anyway going to die within 6 months, so doctors can prescribe whatever they like.”
Is it ethical to invest in businesses with such shady and sharp practices?