Need to regulate cost of medical treatment
January 24, 2021
Recently, the Supreme Court has directed the government to cap the cost of treatment in hospitals. It is worth mentioning that earlier the government had fixed the maximum cost of various treatment for hospitals and nursing homes providing treatment under the Ayushman Bharat Scheme; however, there is no capping of charges by the hospitals for the general public. In this regard, the instructions given by the Supreme Court to the Central Government assume significance.
Private sector participation in health sector has been increasing for quite some time. In the last nearly 30 years, under the policy of globalization, privatization and liberalization, whereas economic resources of governments have shrunk, the attitude of governments towards social services has also changed. Total government spending on education, health and other social expenditure as a percent of total expenditure has almost stagnated. But in the meanwhile, the demand for health facilities has been increasing due to rising infectious and non-infectious diseases, people's changing attitudes towards, new researches in the field of health, innovations of new diagnostics, medicine and new treatments. However, the expansion of government facilities in secondary and tertiary health facilities has almost stopped. In such a situation, the demand for increasing healthcare facilities is now being largely met by the private sector.
It is seen that in the government primary health care centers in villages and cities, many types of health facilities including treatment, vaccination, mother-child care, are being received by the common man. The Primary Health Service Center is also being expanded on a large scale under the 'Ayushman Bharat' program. This is the reason that India was able to spread new innovations in the field of health to the masses in villages and cities. The advantage of this was that the death rate of children below 5 years has reduced considerably in recent decades. It is worth noting that this rate has been reduced from 119 in 1992-93, 101 in 1998-99, 74 in 2005-06 and only 34 per thousand in 2019.
Significantly, the decrease in the death rate of children is largely due to increase in primary health facilities, provision of food for children in Anganwadi centers, etc. by the government. The contribution of private sector directly cannot be overstated in this case. But there is a very small expansion in secondary and tertiary health facilities in the public sector. New big hospitals, AIIMS etc. have been established in all the provinces, but the secondary and tertiary healthcare facilities have mostly expanded in the private sector, especially in the corporate sector. A large number of small and big nursing homes are also built in the private sector.
Due to increase in burden of diseases, health awareness and new measures related to treatment, more people are getting admitted in nursing home and hospitals in the country. But the point of concern is that in the last ten years, the cost of hospitalization has gone up by almost two and a half times. According to the 75th survey of the National Sample Survey Organisation (NSSO), the cost of hospitalization in the private sector was recorded at an average of Rs 27347 in rural areas and Rs 38822 in urban areas (July 2017 to June 2018).
The effect of increasing privatization of health is that the burden of health expenditure on the people is increasing. According to the Medical Journal 'Lancet' out of pocket expenditure on health in India is 78 percent, which is more than any other country in the world. Due to the burden of health expenditure, people are constantly being pushed below the poverty line. Although the government has recently brought out 'Ayushman Bharat' program providing for free medical treatment facility for 10 crore poor families up to Rs 5 lakh, the burden of medical treatment for the middle class is still unbearable.
Due to the increasing role of the private sector in the health sector (especially secondary and tertiary health facilities) and the increasing pressure on the general public, the need for regulation of the private sector is increasing. It is worth noting that earlier, the Central Government had given great relief to the general public by controlling the cost of coronary stents and knee implants. However, this step is being considered to be extremely inadequate. Therefore, the need of the hour is to regulate rates of all types of medical treatment and diagnostics.
No doubt there is a need to increase in investment in the health by the private sector will also have to be encouraged. However, in the name of encouraging private investment we cannot allow fleecing of middle class by corporate hospitals. In the pharmaceutical sector, the National Pharmaceutical Pricing Authority (NPPA) is working to control price of essential medicines. In this regard, stage has already been set to regulate the prices of many more devices, as they have already been brought under the category of drugs. The need of the hour is to constitute a regulatory authority to regulate cost of all types of treatments, procedures and diagnostics in the private sector by determining their prices at appropriate level. This will be a necessary step to protect the public from unfair exploitation by the private sector.