Healthcare costs need a ‘cure’

India has the dubious distinction of 14% healthcare inflation, highest in Asia although the nation harbours a population 50% of which is below the poverty line. Viewed in this light, the Government of India’s admission at the Supreme Court that it was aware of the malpractices involved in purchase of bulk medicine by corporate hospitals and billing them at highly inflated prices to the patients, should be welcomed.

It has also informed the apex court that it was trying to address the issue and laying down norms and a framework for intervention in the matter.  A report of the Health Ministry itself had admitted (in 2020) that expenditure on health pushed 6 crore Indians below the poverty line every year.  

The affidavit submitted by the government to the SC states that hospitals sell the medicine to patients with profits margins ranging between 170% and 700%, particularly the drugs for cancer treatment. Similarly, the hospitals buy consumables that have a high MRP from stockists/distributors and bill it to the patients with 100 to 1,000% margins.

These may not come as ‘revelations’ to the people who routinely access the corporate hospitals for treatment. But the contents made public by the report from the Maharashtra Food and Drug Administration had a lot of surprises. While raids by its activist-minded Commissioner Tukaram Mundhe have dredged out huge volumes of irregularities in hotels, hostels and hospitals, special outrage has been reserved for the exorbitant prices charged by the corporate hospitals for devices and consumables.

The Maharashtra FDA has red-flagged the issue of huge gap between procurement price, declared MRP and the amount billed to the patients. The report reveals that intravenous sets were being sold to a patient with a margin of 2,841%, a nebulizer and oxygen mask at a margin of 1,687%, a catheter at a margin of 955% and the humble 10-ml injection syringe with a margin of 747%.

The FDA found that an IV infusion set with a trade price of Rs. 11.05 carried a printed MRP of Rs. 325, a markup of 2,841%. The humble syringe procured at Rs. 6.75 carried a price tag of Rs. 57 in the hospital. Not alone these. The misdeeds of the corporate hospitals the common practice to push for stent implantation for cases with just 50 to 60% heart blockages while it is not necessary for less than 90% blockages.

It has become normal to apply surge-pricing for operation theatres a la Ola and Uber taxi operators’ peak hour taxi fares. Overtreatment and over-diagnosis too have been flagged as corrupt practices at the corporate hospitals. While the prices of the scheduled medicine are capped by the Drug Prices Control Order 2013, the same is not applied to devices and other consumables.

Even while the hospitals are being directed to display the prices of the drugs being prescribed on notice boards, hospitals should be barred from preventing patients from purchase of medicine from outside the hospitals. India’s vast poor class deserves a medical ecosystem that is affordable, ethical and globally competitive.