Recently, there were complaints from family members of many patients regardng exorbitant medical bills charged by various private hospitals. The National Pharmaceutical Pricing Authority (NPPA) took control over the matter. The NPPA analysis was based on the complaints of overcharges from the relatives of patients. It carried out an analysis which showed that the cost of the procedure, consultation, medical supervision and room rent constitute approximately 11 per cent each in medical bills. The major share (56.41 per cent) consists of medicines, medical devices, consumables and diagnostic charges.
Further, the NPPA analysis reveals the huge marks up-pocketed by the private hospitals from patients. Hospitals procure medicines, consumables and devices at a cheap price from the manufacturers and sell at a very high price to patients. The difference between the procurement price and selling price to patients in certain items is almost 1700 per cent. For instance, a three-way stopcock purchased for Rs 5.77 was sold to the patient for Rs 106, a margin of 1737 per cent. Similarly, an IV Infusion set (non-vented) purchased for Rs 8.30 and sold to the patient for Rs 115 i.e. 1271 per cent margin.
In December 2017, newspapers reported that an investigation by the Competition Commission of India (CCI) revealed that Max Hospital in Patparganj, New Delhi, is making a profit margin of 275-525 per cent by selling syringes at Rs 19 while the MRP for the same syringe is Rs 11 in the market. The NPPA report also shows that while the cheap medicines are available doctors and hospitals are treating patients with expensive medicines to enhance the profit.
However, this is not an isolated case. This is the case with most of the private hospitals. In India, due to the lack of public health infrastructure, people are forced to go to the private sector hospitals and ended up spending their own savings or borrow or pledge their assets. The draft National Health Policy (NHP) states that nearly 63 million people are pushed below the poverty line due to healthcare payments. Approximately 71 percent of the current health expenditure is in the form household contributions.
Addressing the Issue
According to 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). Out of this 3.892 per cent, the share of government expenditure on health is only 1.13 per cent of GDP far below than the WHO suggested 6 per cent of GDP. This lack of public expenditure in healthcare especially in building up the public health infrastructure over the period created a dependency on private hospitals. As a result, patients and their families are subjected to exploitation.
There is an urgent need to address the financial hardship of people emanating from the healthcare. Quality healthcare should be provided to the people free of cost or at an affordable price. There is no shortcut method to address this issue. The only durable solution is to enhance the public expenditure in public health infrastructure and healthcare services. Starting with the first NDA government there was an attempt to address the financial hardship related to healthcare by extending insurance coverage. Currently, central government and various state governments are running various health insurance schemes targeting the poor.
Since the United Progressive Alliance (UPA) time, the central government took a stand that healthcare is a state subject and therefore the central government has a little role in controlling treatment cost. In reality, there is nothing in the Constitution of India that prevents the Central Government form fixing the cots of treatment. On the contrary, the concurrent list entries such as the essential supply of goods and services and price control provide the legislative competency to the Central Government to enact price regulation on treatment cost. In the absence of price control on the treatment cost hospitals charge as per their wish and even neutralise the effect of price control on medicines and devices.
Drug Price Control
Currently, the Central Government control the prices of essential medicines and certain other medicines and devices through the Drug Price Control Order, 2013 (DPCO, 2013). Often hospitals and pharmaceutical companies use the loopholes in DPCO, 2013 and neutralise the effect of DPCO, 2013. As a result, the share of price-controlled medicines constitutes only 10 per cent of Indian pharmaceutical market. In other words, it shows that while cheap medicines are available, doctors and hospitals uses expensive medicines to treat the patients to maximise their profit.
The NDA government used DPCO, 2013 to put an end to the high prices of cardiovascular stents and knee implants. However many medical devices and consumables notified as medicines under the Drugs and Cosmetics Act are outside the price control. As shown in NPPA report hospitals uses these loopholes to extract money from the patients. Therefore, there is an urgent need to impose price control on medical devices and consumables urgently suing Para 19 of the DPCO, 2013.
Para 19 states: “Notwithstanding anything contained in this order, the Government may, in case of extra-ordinary circumstances, if it considers necessary so to do in public interest, fix the ceiling price or retail price of any Drug for such period, as it may deem fit and where the ceiling price or retail price of the drug is already fixed and notified, the Government may allow an increase or decrease in the ceiling price or the retail price, as the case may be, irrespective of annual wholesale price index for that year.”
It is very clear from the NPPA report that manufacturers are not going to suffer from the price control but it prevents the exploitation of the patients for maximum profits. The Government showed its will in exposing this exploitation by putting the NPPA analysis in the public domain. Now there is the legal and moral duty on the government to put an end to this on-going exploitation.
— Organiser Bureau
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