ANALYSIS
Therefore, the Central government should stop passing the buck and show the political will to ensure access to affordable healthcare by imposing the ceiling on health care charges
Running pillar to post to pay a medical bill is a well-repeated scene in many Indian movies. While such a scenario is unthinkable in many countries, it is a reality in India even for the middle-class families. Over the years, the neglect of investments in public health infrastructure and the promotion of private hospitals to fill the gap have created a dependency on the private sector. Private sector was promoted without a regulatory framework, especially on healthcare charges.
According to the national health accounts, India’s total health expenditure (THE) during 2014-15 is estimated at 3.89 per cent of the country’s Gross Domestic Product (GDP). The share of government in THE is 1.13 per cent. Household out-of-pocket expenditure finances 67 per cent of the health finance. A minuscule share of THE is spent on capital expenditure. In 2014-15 capital expenditure on health was only 6.6 per cent. In 2013-14 it was only 7.5 per cent.
This neglect of critical health infrastructure creates a dependency on the private sector. As a result, India is short of 3,469 community health centres (CHC) for 1,00,000 persons, 5,887 primary health centres (PHC) for every 30,000 persons and 27,430 sub-centres for every 5,000 persons. This has led to a situation wherein almost 80 per cent of tertiary care and 60 per cent of primary care is catered by the private sector. The lack of a ceiling on health care charges allows the private sector healthcare providers to hold people’s health at ransom for profits. As a result, every year nearly 63 million people are pushed below the poverty line for paying the healthcare bills. The recent Fortis and many other unreported incidents show that private hospitals are overcharging their patients and exploiting the vulnerability of patients.
One of the important ways of overcharging are the excessive prices of medical devices and other consumables. The report of the Competition Commission of India (CCI) shows that Max Hospital abused its dominant position and charged disposable syringes at Rs 19.20 per unit while the MRP in the open market was Rs 11. Similarly, the National Pharmaceutical Pricing Authority (NPPA) found that hospitals were charging 650 per cent markup on drug eluted cardiovascular stents and 450 per cent markup on knee implants. Further, IV cannulas are charged somewhere between Rs 132 and 160 per unit while the factories are selling it at Rs 11. When the government fixed the prices of stents, hospitals hiked the charges for angioplasty procedures to compensate for the loss of profit.
The current situation warrants an urgent intervention from the government to regulate healthcare charges by imposing a ceiling on the prices. Current thinking among policymakers is to use the Clinical Establishment Act (CEA) to regulate healthcare charges. Since health falls within the state list, the central government is asking states to adopt either the central CEA or their own version of CEA. Nearly 12 states have either adopted or are in the process of adopting CEA. However, there are doubts about the CEA route to fix the prices of health care expenditure because the statute does not even mention price regulation as one of its objectives. It is primarily dealing with “the registration and regulation of clinical establishment with a view to prescribing minimum standards of facilities and services” and not to provide affordable health care. The customised version of the CEA adopted by the Karnataka legislature also removed any reference to regulation of health care charges.
As a result, the only way to regulate healthcare charges within CEA is through either rules or direction from the government to the implementation authority. In any case, CEA-based price regulation would create fragmentation of health care charges regulation in the country and raises serious doubts about its efficacy.
Ideally, there should be a single national authority to regulate the prices of healthcare charges. Even though health falls within the state list it does not mean that the Central government cannot control the prices of healthcare charges. Two entries in the concurrent list clearly provide powers to the Central government to enact the law to regulate healthcare charges. First, the maintenance of the supply of essential goods and services provides powers to the central government to legislate to ensure maintenance of essential goods and services. Using this provision the central government already enacted the Essential Service Maintenance Act. Under this law, healthcare services are already treated as essential services. Secondly, the concurrent list also allows the Central government to enact laws on price control. Using these powers the central government could legislate and regulate healthcare charges in the country.
Apart from the above-mentioned grounds, Article 253 of the Indian Constitution allows the Central government to enact laws to give effect to international agreements. India as a party to the International Covenant on Economic, Social and Cultural Rights (ICESCR) has an international obligation to protect the right to health.
Therefore, the Central government should stop passing the buck and show the political will to ensure access to affordable healthcare by imposing the ceiling on health care charges.
The author is a researcher associated with the Third World Network
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