The Indian healthcare system, a tapestry woven with high-end private facilities and accessible public hospitals, faces a significant challenge: the absence of standardized medical care and even prices. This disparity creates a maze of confusion and financial burden for patients, jeopardizing affordability, and access to quality healthcare. This article delves into the complexities surrounding standardized medical pricing in India, analyzing its impact on the right to health, exploring international practices, and discussing recent observations made by the Supreme Court, along with relevant case laws.
The Price Labyrinth: A Need for Standardization
Healthcare is a state subject. Accessible and affordable healthcare is the basic right of every human being regardless of his cast, creed, community, or economic status. The condition of government hospitals is not at par with the luxuries offered by the private hospitals. Private players of healthcare sector have 4Cs as its unique selling preposition (USP) I.e. comfort, convenience, and credibility. But there is one more C on which private hospitals thrive upon which is cost. Single bill of private hospital is enough to make a person bankrupt. Unless you belong to the poorest segment of India’s population, there are no public health programs available for eligibility. Indian citizens are entitled to treatment free of charge at public hospitals. Expatriates and tourists can avail themselves of these facilities as well, albeit at their own expense. For minor medical issues, the expenses can be as minimal as a few dollars. (Understanding India’s Healthcare System. (n.d.). International Citizens Insurance.).
Funding for India’s healthcare system primarily comes from government taxation. In 2019, the government allocated approximately $36 billion annually towards healthcare, constituting roughly 1.23% of the country’s GDP. When factoring in the out-of-pocket expenses incurred by patients for private healthcare services, the total healthcare expenditure in India amounts to 3.6% of its GDP. With the world’s largest private healthcare system, India relies heavily on private funding, with only about 20% of healthcare services being covered by public funding. (Understanding India’s Healthcare System. (n.d.). International Citizens Insurance.).
The cost of medical procedures in India varies dramatically across public and private hospitals, even within the private sector. As per the pleading of the petitioner Organization, a routine cataract surgery, for instance, can range from a modest Rs. 30,000 to a staggering Rs. 1,40,000 per eye, solely based on the chosen hospital. This lack of transparency makes budgeting for healthcare a daunting task for patients, potentially leading to financial hardship, especially for those without health insurance. The absence of standardized pricing also raises concerns about profiteering within the private healthcare sector. While private hospitals incur operational costs like infrastructure and equipment maintenance, the current system allows for significant price variations that are not always justified by the quality of care provided.
Right to get affordable treatment
The Indian Constitution, under Article 21, guarantees the right to health, encompassing the right to access affordable medical care. In the cases of Pt. Parmanand Katara, Advocate v. Union of India and Another, (1995) 3 SCC 248, and Paschim Bangal Khet Mazdoor Samity v. State of West Bengal, AIR 1996 SC 2426, the Supreme Court has ruled that the State has an obligation to provide medical care to its citizens.
In Re: The Proper Treatment of Covid 19 Patients And Dignified Handling Of Dead Bodies In The Hospitals Etc. suo Motu Writ Petition (Civil) No. 7 Of 2020, supreme court observed that
“Right to health is a fundamental right guaranteed under Article 21 of the Constitution of India. Right to health includes affordable treatment. Therefore, it is the duty upon the state to make provisions for affordable treatment and more and more provisions in the hospitals to be run by the state and/or local administration are made. It cannot be disputed that for whatever reasons the treatment has become costlier and costlier and it is not affordable to the common people at all.
The central government enacted Clinical Establishments (Registration and Regulation) Rules, 2012 for governing the registration and operation of medical facilities. Rule 9 specifically provide that each medical establishment shall charge the rates for each type of procedures and services within the range determined and issued by the central government from time to time, in consultation with the State Government. It is an irony that till date these rules have not been enforced and each hospital charges the bill arbitrarily and without following any method. Twelve years has been passed from the date of notification but till today there is no guidelines or regulations which regulates the bills of private hospitals. The right to life cannot be guaranteed unless affordable and fair treatment is ensured. The unfair charges of medical procedures is also in contravention with Article 39 of the Constitution which endeavor the state to ensure no abuse of health this directive cannot be achieved till accessible healthcare facility is available to all.
The shocking data on health expenditure
The National health survey 2019 conducted during July 2017- June 2018 reveals shocking data over the dependency over private healthcare institutions. The survey also unwraps the disparity over the expenditure made by patients in private and government hospitals. Key takeaways of the survey were as follows:
- Approximately 42% (46% in rural and 35% in urban areas) of the population received treatment in public hospitals, 55% (52% in rural and 61% in urban areas) in private hospitals (excluding charitable and NGO-run hospitals), and 2.7% (2.4% in rural and 3.3% in urban areas) in charitable, trust, and NGO-run hospitals.
- Hospitalization costs amounted to approximately Rs. 26,475 in urban India and Rs. 16,676 in rural India on average.
- In both sectors, a greater inclination towards allopathy treatment was observed, with approximately 95% of cases.
- Approximately 4,290 in rural and 4,837 in urban areas were spent on average in government/public hospitals, while about 27,347 in rural and 38,822 in urban areas were spent in private hospitals. Spending on public and government hospitals in India totaled Rs. 31,845 and Rs. 4,452, respectively.
- The main sources of funding for hospital expenses for rural households were “household income/savings” (80%) and “borrowings” (13%). The urban households relied slightly more (84%) on their “income/savings” than on “borrowings” to cover hospitalisation costs (about 9%).
The inaccessibility of private hospitals in rural areas and high cost of treatment make them unaffordable. Around 14% of patients took loan to pay off the hospital bills. The government scheme like AYUSHMAAN BHARAT helps to achieving the aim of affordable healthcare but these schemes does not includes all type treatments and all hospitals.
International Practices on Standardizing Medical Procedure Prices
Several countries have successfully tackled the issue of standardized medical prices, offering valuable insights for India. The German Diagnosis-Related Group (DRG) system categorizes cases based on complexity, ensuring fair hospital reimbursements. However, it might incentivize early discharge, potentially compromising care.
Thailand and the Netherlands utilize reference pricing, where the government sets base prices for procedures. Hospitals can adjust their charges, but patients are reimbursed up to the reference price. This fosters competition while ensuring some level of price control.
The United Kingdom and Sweden employ global budgets, allocating a fixed amount to healthcare providers who manage resources within that budget. This promotes efficiency but might limit access to new technologies.
Singapore and Taiwan offer a public-private mix. The government regulates prices in public hospitals, while private hospitals have more flexibility but must be transparent about their pricing. This ensures affordability for low-income populations while offering options for those willing to pay more.
Finally, the United States has limited mandatory price transparency, requiring hospitals to disclose standard charges. While empowering patients to compare prices, it has limitations due to bundled charges and a lack of comprehensive scope.
Supreme Court’s Intervention: A Push for Standardized Medical Prices in India
In a recent move highlighting the critical need for standardized medical prices, the Supreme Court of India intervened in 2020 through a Public Interest Litigation (PIL) filed by the Veterans Forum for Transparency in Public Life (Veterans Forum for Transparency in Public Life v. UOI, WP(C) No.648/2020, matter is to be taken in mid-April 2024, date of hearing is not specified) The Court took serious note of the alarming discrepancies in medical procedure costs across the country. Public and private hospitals, and even private hospitals themselves, exhibited significant variations, creating confusion and financial hardship for patients.
The Court strongly criticized the Central Government’s failure to enforce the existing Clinical Establishment Rules (CE Rules), 2012. Specifically, Rule 9 mandates hospitals to display their service charges and operate within a range set by the Central Government in consultation with states. This rule, if implemented effectively, could be a key step towards price standardization.
The bench comprising Justice B.R Gavai and Justice Sandeep Mehta directed the union to hold meetings with state and union territories and to submit proposal for standardization of prices of medical practices within the country. The Supreme Court’s observations reflect a growing recognition of the negative impact of price disparity on the right to health, guaranteed under Article 21 of the Indian Constitution. This right encompasses access to affordable medical care, which becomes severely hindered by the current lack of standardization. The Court’s directive to the Central Government to take immediate action emphasizes the urgent need for a solution.
Looking Ahead
Although its irony such a basic discussion must commence in the Supreme Court. The Court’s intervention has reignited the debate on standardized medical pricing in India. While the specific model to be adopted remains under discussion, several possibilities exist. The Court’s observations on the existing CE Rules suggest they could be a starting point, requiring robust implementation and collaboration between central and state governments. International practices like Diagnosis-Related Groups (DRGs) or reference pricing models could also offer valuable inspiration. Ultimately, the chosen approach should ensure fair pricing for hospitals, transparency for patients, and affordability for all citizens, fulfilling the right to health enshrined in the Constitution.
About the author
Add Comment