For the past few days, doctors representing private hospitals in Karnataka have been staging a protest in Belgaum.
Due to the reluctance of the ruling government to even listen to the objections, various doctor bodies in Karnataka have called for an indefinite shut down of Out Patient Department services and elective surgeries in all private hospitals.
Only emergency and essential services such as dialysis and chemotherapy will be functioning from 16 November, 2017.
Not paying heed to the doctors’ protest, the Karnataka government is all set to table and pass the Karnataka Private Medical Establishment Act (KPMEA), 2017 in the Winter Session of the Legislative Assembly.
The West Bengal government has already tabled and passed the West Bengal Clinical Establishments (Registration, Regulation and Transparency) Bill, 2017. Both these new laws seek to cap price of private healthcare.
It appears to be a foolish move by state governments to take the attention away from the abysmal public healthcare infrastructure and delivery. Private hospitals are being victimised for giving good quality care despite the government rather than because of it.
Before you are outraged and bring morality, corruption and greed into the discussion and get emotional, let us put forth some logical arguments why the capping of fees is not a good idea.
Private hospitals need to
- Buy/ lease/ rent real estate
- Build hospital infrastructure and buy high-priced equipment.
- Pay salaries of doctors, nurses, technicians, paramedics staff, administrative and clerical staff
- Pay electricity/ water bills at commercial rates, AMC maintenance of medical equipment, insurance premiums,
- Regulatory expenditures to maintain standards and get accreditations like NABH, NABL, JCI, etc
- Buy consumables like sutures, surgical instruments, implants, drugs, medical supplies to be in inventory when the patients walk in.
- Pay taxes just like any legitimate business.
To remain cutting edge, they need to invest in technology, research and hire people who are up to date with the latest in medical science and skill.
All these need to be paid for by the revenue generated in the hospital and the promoters of the hospital need to make profit to sustain, expand service width and to continue maintaining quality. If profit doesn’t materialise, the promoters or hospital owners are not going to run the hospital and will end up selling it off or pulling out their investments.
Government hospitals also need to do the same, but they are funded by taxpayers. So they don’t need to make a profit to continue. Even though they need to maintain certain standards, most government hospitals fall short.
So what happens when there is a capping of fees in private hospitals?
I’ll present four hypothetical scenarios just to drive the point home:
Scenario 1: Emergency
You become a victim of a road accident. You are rushed to the nearest government hospital where emergency care is given and you are stabilised.
However, knowing the quality of care available in government hospitals, you get yourself shifted to a private hospital. You’re injured pretty badly and you need complex surgery which requires a lot of implants and cutting-edge technology. There are brilliant and skilled doctors in the hospital and all the technology is available.
However here is the catch: The government has fixed the price of your surgery at Rs 20,000.
This has been decided without taking into account the various types of complex cases that come to the hospitals after road accidents. The hospital says it cannot afford to put all their best doctors on your case. They had to let some go due to the capping of surgical fees. They would also be forced to use sub-standard implants and equipment since they cannot afford to pay for cutting-edge technology.
They do not really want to do the surgery either. They'd prefer if you return to the government hospital for surgery because they're worried that you will file a malpractice suit against them for not solving your problem. That only means more expenses.
How would you feel?
Scenario 2: Health insurance and government schemes
Your mother needs cataract surgery. It is a very common surgery in any eye hospital. Some of the most excellent cataract surgeons in the world are in India. You want the best for your mother, so, once again, you visit a private eye hospital. Your mother is a good candidate for the high-end surgery: Phacoemulsification with a multifocal foldable intraocular lens. Your father underwent the same procedure last year before the price cap of Rs 50,000 was fixed.
To your chagrin, the doctor tells you that you have only one option: Small Incision Cataract surgery with a one of the cheapest available lens. This is because the government fixed the price of cataract surgery at Rs 6,000 based on how much government schemes have fixed prices.
The eye hospital had to sell off its phacoemulsification machines. The multifocal IOL costs Rs 30,000 and due to the price cap, the vendor has taken the high-cost IOLs off the shelves because it is not profitable to sell them.
You tell the doctor money is no issue. It's your mother. You're ready to pay the difference. The doctor says you can't because the price cap means he can't charge you a higher rate than others. Also, he can’t do the phacoemulsification surgery because he sold the machine.
In effect, the surgery that is available to your mother is no different than those done to very poor patients (who cannot afford to go to private hospitals) in camp surgery or government hospitals. You protest. Your mother’s surgery is covered by insurance. Which ought to solve the problem.
He tells you that he has stopped taking in government schemes and insurance payments as he is already losing money and cannot bear any further losses from government schemes who make payments every couple of years.
He is also unable to provide quality assurances demanded by the insurance companies under this new regime. He also informs you that he has fired half his medical and non-medical staff since he cannot afford to pay their salaries.
How would you feel if you have the money required but cannot get your mother the best quality surgery available in the world?
Scenario 3: Primary care
Your child has fever. You go to your neighbourhood doctor. When you reach the clinic, you see 50 people waiting to see the doctor. You wait for four hours before you are seen. You try to tell her that your child has fever, but she isn’t listening. She has already started writing a prescription for antibiotics and paracetamol.
She hands you the prescription telling you to google any queries. She doesn’t have to time to examine your child because the government has capped her consultation charge at Rs 50 and she needs to see 100 patients a day to break even. She says if the child doesn't get better, you can go to a government hospital.
Doesn't it sound swell?
Scenario 4: Super-specialisation surgery
Your uncle needs a liver transplant. Corporate hospitals which were earlier handling these procedures have stopped because the government capped the price at Rs 5 lakh. Corporate hospitals cannot sustain their transplant program. Your uncle has no option but to go to another state or country. The surgery may or may not be feasible in a different state or country depending on the rules governing transplantation in those states or countries.
You can guess what the trend will be….
Honest doctors and well-intentioned hospitals will reduce services to the minimum sustainable. They will refuse to do any surgery that costs more than the government allows them to charge or ones too risky to attempt.
The unscrupulous elements among medical professionals and hospitals will stop maintaining standards because that costs money. They will use the cheapest equipment, cheapest implants, low-quality manpower and sometimes provide incomplete or no treatment as long as they eventually make profit. This will go unchecked because the unscrupulous have an absolute monopoly and government hospitals are no better.
Private hospitals will eventually stop performing surgery under government schemes. Many smaller hospitals and practices will shut down as it will become unsustainable. Larger hospitals and corporate hospitals will refuse government schemes since they will lose money on those surgeries and other revenue sources have dried up. Eventually, the poor will be left at the mercy of government hospitals.
Many doctors and medical professionals will either migrate out of state—or leave the country—or take up a job in another industry where the government does not cap the prices of the services or product.
None of the latest technology would reach India as foreign companies will have no market for their latest but expensive machines and implants. Not many doctors would be left in the state with expertise in using new technology as they would have moved to greener pastures.
The medical tourism industry implodes because quality has dropped so much that no one cares about it anymore. The health indices of the state and country plummet drastically, mirroring some country in West Africa.
The public, of course, will be very happy that there are no private hospitals or doctors making any money and that the quality of care available in the government hospitals is almost comparable to the private ones (or the few that would be left).
The above account may read like something out of a dystopian nightmare but that's exactly what will happen if the government caps fees in private hospitals in India and if it is taken to its logical conclusion.
This whole public support around capping fees for medical services in Karnataka and West Bengal is based on the false premise that somehow doctors and private hospitals are responsible for providing affordable healthcare. They are not. They cannot!
Despite this, private healthcare services nearly 70 to 80 percent of the healthcare needs of the country. The fees charged for the high level of care provided is among the lowest in the world.
Private healthcare is what is bringing the latest in the medical world to India at the lowest prices. Hospitals use volumes (in a large country like India) to drive down running costs and expenditures thus helping reduce prices.
The responsibility to provide affordable healthcare lies with the government. The buck stops with them. They should improve government hospitals to put them on par with the best private hospitals through money and manpower. They should make strong insurance laws and create more state-funded insurance schemes which will prevent private insurance companies from cheating the public.
They can cap basic implants and tents or even offer those free of cost. They can even set prices for government-funded schemes after discussions committees which comprise hospital or doctor bodies who have a legitimate stake.
The point remains: If the quality of healthcare in government hospitals was reasonable, why would anyone have to visit a private hospital?
To cap all prices in private healthcare is irresponsible and shows the callous attitude of the Karnataka and West Bengal governments.
It will have disastrous consequences. To hide their failure to uplift the standard of public healthcare, they are demonising private healthcare and doing it for the sake of votes.
Failing to understand the economics of medicine leads to every stakeholder in the healthcare pyramid suffering in the aftermath of a poor healthcare policy.
The author is a consultant, Orbit, Ophthalmic Plastic Surgery and Ocular Oncology practicing in Bangalore. The piece first appeared on quora.com
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Updated Date: Nov 17, 2017 07:23:54 IST