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 While most doctors, owners of nursing homes and experts say the advisory is harsh and may affect patient care, the Health Minister insists it will increase transparency

While the common man has welcomed the Delhi government’s draft policy that aims to cap the profits of private hospitals and cut medical costs, experts are concerned about the debilitating impact it may have on the health sector.

Health Minister Satyendar Jain recently announced a draft policy, which has provisions to control what he called “exploitative profit” made by private hospitals and nursing homes through “overcharging patients for medicines, investigations and other medical procedures”.
Highlights of the draft policy

    Hospitals cannot charge (make profit) more than 50% of the proposed rate for a medical package
    Hospitals as a rule will have to disclose all treatments, medicines, investigations and any other medical charges as part of the bill
    Hospitals can offer a high-risk package, which will be 20% more than normal treatment packages
    Hospitals cannot force people to buy medicines from their pharmacy
    Doctors have to prescribe from the price-controlled National List of Essential Medicines and can only charge the listed MRP or a maximum markup of 50% of the purchase cost
    For implants, this stands as MRP or 33% markup.
    Profits on diagnostics are under discussion for capping
    If a patient dies within six hours of being taken to the hospital emergency room, 50% of the treatment cost will be waived
    If the death occurs within 24 hours, 20% of the total bill amount will be waived

Many in the health sector, however, said the draft policy was not realistic.

“It [draft policy] is a joke which has not been thought out properly,” said D.S. Rana, chairman, Sir Ganga Ram Hospital.

Dr. Rana said regulating prices to benefit the poor may be a good move but cutting down profits to a level that hospitals become a bad investment will help no one in the long run.

“Why can’t the government look at making its own hospitals so good that people do not have to got to private hospitals,” he asked.

50% profit cap

The government’s draft advisory recommends a number of measures, including a 50% profit cap over procurement of medicines and other consumables, 50% waiver on the total bill if a patient dies within six hours of admission to a hospital and 20% waiver if a patient dies within 24 hours of admission.

The advisory states that any private hospital or nursing home cannot refuse treatment to any patient brought in critical condition. It also says that no body can be detained in the hospital due to non-payment of dues. Mr. Jain said this was being done to ensure the “dignity of the dead”.

In order to bring about these changes, the Nursing Homes Registration Act that governs all private hospitals and nursing homes will have to be amended. This will require the Delhi Cabinet to clear the proposal and send it to the Lieutenant-Governor for clearance. Once the advisory is notified, private hospitals flouting it will face punitive measures, including cancellation of licence.

Risk for patients

Most medical practitioners, however, said that the advisory would not have the effect that the government desired.

Fr. George P.A., director, Holy Family Hospital, said: “While we understand that the sentiment behind the announcement is to help the poorest of the poor and make big private hospitals more accountable and within the reach of the common man, certain clauses in the advisory, we fear, may actually work against the welfare of the patients. No hospital will repeatedly compromise with the actual cost and reasonable cost of keeping the establishment running.”

He said there was also a chance that those patients who could pay may misuse the system an that may affect the treatment of the critically ill patients. “We have to understand the practical difficulties of linking time of hospital admission and death to hospital bill,” he observed.

Primary healthcare?

Questions are also being raised over the thought process behind the advisory. Anil Bansal of the Delhi Medical Association said: “Whoever thought of this plan has not bothered to understand the working of the healthcare system and has picked up the more popular sentiment of the people. Yes, regulation is important but so is the actual strict implementation of the already existing laws that safeguard the rights of the common man. Improving the primary healthcare system, too, would go a long way in ensuring that private hospitals fall in line.”

He said “gimmicks” like 50% bill wavier if patient dies within six hours of being taken to a hospital are not robust measures. “This may actually deprive people of good treatment on time,” he warned.

The Health Minister, however, defended his proposal, saying that “there have been a lot of complaints about overcharging and malpractices in private hospitals. This policy will help increase transparency”.

Populist move: IMA

The Indian Medical Association said the advisory was a populist move that might affect patient safety and healthcare quality.

IMA president Ravi Wankhedkar said:

“This advisory is harsh and lacks proper research and understanding. Instead of strengthening and improving the public health system in Delhi, the government is trying to gag private healthcare by issuing such an advisory without bothering about sustainability.

’’Decisions will be vague and incorrect conclusions will be derived in case only specific aspects of healthcare costing are picked up without considering the total cost of healthcare delivery.”

Pharmacy clause

The IMA is in agreement for not compelling the patients to buy drugs from in-house pharmacy, with exception in emergency and critical cases.

Former IMA president Vinay Aggarwal said, “We also have strong reservation against capping of prices of investigations. It will affect the quality of service depending upon the choice of equipment, investigation, material and the expertise of the clinician/ pathologists/ radiologist who are interpreting the findings and preparing the results. We also feel that this kind of notification is infringing upon doctor-patient relationship and bringing in more mistrust.”

The Association has proposed that a standard operative system be developed by the government in consultation with all stakeholders in case of medical negligence.

Senior physician R.N. Tandon said there was no logic to relating the bill amount to the time of death. “Such arbitrary capping may result in hospitals discouraging families to admit critical patients [with high chance of mortality] or treating them extremely conservatively post-admission since they are not likely to even recover the actual cost of treatment. It is operationally very difficult to define and measure the exact point of patient arrival to be used as the basis of this discounting.”

Hospitals concerned

While Apollo Hospitals, Delhi, refused to comment on the government’s draft advisory, Max Hospital authorities said it might affect patient care. “The advisory from DGHS, Delhi, is quite harsh from the perspective of private healthcare services providers based in NCT Delhi. We are in the process of studying the document in detail and will be engaging with the government in a constructive manner.’’

In a statement, the hospital said, “We completely understand the need for transparency and fair and reasonable profits. The reality, however, is quite different. Most private players are making losses or single-digit returns which don’t even cover the cost of capital. Some of the recommendations may also adversely impact patient care and quality.”

Stating that it understood the need for fair and reasonable profits, Max Hospital claimed that most private players make losses or single-digit returns which do not even cover the cost of capital.
Stating that it understood the need for fair and reasonable profits, Max Hospital claimed that most private players make losses or single-digit returns which do not even cover the cost of capital. 
 

Humanitarian grounds

The government’s advisory is based on the recommendations of a nine-member committee set up in December 2017 to look into the “complaints of overcharging” and other issues at private hospitals. Former IMA president K.K. Aggarwal, who is a member of the panel, said: “In hospitals, maximum cases of violence occur after a patient dies within the first few hours of being taken there. The relatives go on the rampage. The 50% bill wavier — which still covers the cost of consumables and medicines — is more on humanitarian grounds.”

Support for proposal

Organisations working for patients and their families, meanwhile, have welcomed the proposed measures.“Indeed they are progressive in intent and signal a paradigmatic shift in the government’s thinking,” said a statement released by Campaign for Dignified and Affordable Healthcare.

This is a forum of patients, families, civil society groups and health experts that advocates strengthening of regulation of private healthcare sector and seeks reforms to ensure ethical and respectful treatment of patients.

Legal vetting

The group added that “the measures need further careful consideration and legal vetting to ensure they do not get stuck in courts”. “This kind of reform requires a statutory mandate, which could come through substantial modifications to the Delhi Nursing Homes Registration Act, 1953. Failing that, a new Act would be required in order to accommodate the measures proposed. In absence of such a legal cover, we are afraid, the Delhi government’s good intentions will be of little or no avail,” it noted.

Usha Manjunath, director, IIHMR Bangalore, said that no one could deny the fact that public health facilities alone cannot provide service to all who needed healthcare in the country. “The government’s role in regulating the quality of healthcare, functioning of private hospitals and pricing structure is critical. In this context, Delhi’s policy draft is welcome,” she said.

The challenge

A statement issued by her said that according to the information available, the Delhi government formed the committee following a series of meetings with various professional and regulatory organisations.

“Hence, the proposed restrictions on profit margins from medicines and consumables may be acceptable to private players. However, the challenge is in implementation, regulation and taking punitive actions against the defaulters. At this point, it is not clear how this would impact operational cost and cost of human resource of the hospitals,” she said.

Speaking about the scenario across India, she said many patients reached hospitals at an advanced stage of the disease. There would always be the fear of them being turned away if bill waiver is attached to time of death at the hospital.

“A lot of negativity and lack of trust among general public towards private as well as public healthcare providers is not a great scenario for brining in a positive change. Hope the details of the draft are conducive to positive change and engagement of all stakeholders for arriving at good solutions is ensured, ” she said.

Pricing standardisation

Archana Dhawan Bajaj, gynaecologist and obstetrician, Nurture IVF Centre, said: “Medical procedures in India are among the most affordable in the world, which is a combination of cost of drugs, devices and services. Policies and provisions should be considered only if they can bring down the overall cost of treatment for the patient without denying them the option to avail of the treatment of their choice.”

“The Delhi government’s policy aims at affordability and from that point of view it may go a long way in standardising and regulating the drug, devices and service quality in Delhi and usher in the much-needed transparency which would also enable pricing standardisation in a more rational manner,” she noted.

Aashish Chaudhry, managing director, Aakash Healthcare Super Speciality Hospital, said: “The pricing policy envisages engagement with private sector in a big way with a focus on quality and affordability. The government has clearly recognised the system’s gaps and has planned to introduce several provisions to support patients against higher margins on drugs, devices, excessive charges on services and unethical practices. To manage costs with quality, designing operations at hospitals, whether it is pricing, procurement, monitoring consumptions or staffing, needs to be at the top of the agenda of Indian healthcare providers.”