There is no doubt that the recent policy of the Delhi government is aimed at bringing down the cost to patient by preferring prescribing drugs from the National List of Essential Medicines (NLEM) and capping profits that hospitals can make on the rest of the drugs and consumables.
It also attempts to bring in transparency, for example, by clearly displaying charges for procedures or consultations.
However, when it comes to regulating prices of procedures either by asking hospitals to waive off part of the bill or following the package system, the government needs to consider the following realities.
One, any healthcare facility, secondary or tertiary, needs to spend on the infrastructure, in terms of setting up the physical structure and then its maintenance. The facilities also need a large number of medical and paramedical staff, who expect a decent salary and even a hike from time to time keeping pace with inflation.
Healthcare facilities need to invest in latest equipment and then spend for the continuous wear and tear.
The hospitals and nursing homes also need to pay for measures for patient safety. The facilities purchase electricity and water at market rates, they need to pay for security services and housekeeping services, and the list goes on.
The government needs to calculate the direct and the indirect costs.
Even at a public hospital like AIIMS (All India Institute of Medical Sciences), if the government looks at both the direct and indirect costs, it is highly likely that the cost of care will be at par with the private sector. However, the cost is borne by tax payers.
In fact, a 2009-study done at AIIMS that looked into the cost of training one MBBS doctor at the hospital found that when the direct and the indirect costs were considered the amount stood at Rs 1.7 crores. This is at par with the fees charged by private medical colleges.
Next, not all surgical procedures are uniform. The surgery for removal of a gallbladder may be easy and performed within 30 minutes in one case and could be difficult and take 90 minutes. Instead of sticking to a package, should the hospital and surgeon not charge proportionally higher in such a scenario?
Third, within the packages we also need to think of the quality of care being provided. What about the disposable items being used and its cost?
Public at large has become aware of the quality of care, but they need to understand that higher quality of care would also cost more.
Four, we come to the availability of the indoor beds in the country. We always talk about how our bed to population ratio is poor, that we have one bed for every 800 persons in the country.
There are 400 medical colleges in the country, of these 50% are privately run. These medical college hospitals also have to maintain a minimum of 500 to 900 beds for a batch of 100 to 150 undergraduate students. They need to employ full time faculty, nurses, technicians and pay for the infrastructure.
Across India, the bed occupancy in these hospitals is at best 50%. The beds in most corporate hospitals are also far from optimally utilised, except in the times of a patient surge like during the dengue season. But practically, every corporate hospital, nursing home, private medical college hospital needs more patients, particularly surgical patients.
On the other hand, public hospitals are overwhelmed. We need to develop a mechanism to reduce burden on public hospitals by distributing large number of patients to private medical hospitals at reasonable cost, much lower than the costs of corporate hospitals.
This will also help in training of doctors, teaching and research.