“Private hospitals functioning in regulatory vacuum”

Patients and health groups condemn excessive and unethical pricing by private hospitals, stress need for regulation of healthcare charges

GN Bureau | February 22, 2018


#Health   #Medical Bills   #Private Hosptial   #Fortis  
Illustration: Ashish Asthana
Illustration: Ashish Asthana

Patients and health groups came together in Delhi to voice concerns over the unethical practices of private hospitals, which they say are a direct outcome of the regulatory vacuum, allowing them to monetize the vulnerability of patients. The study of the National Pharmaceutical Pricing Authority (NPPA) that analysed patient bills from four prominent private hospitals is the newest evidence of overcharging and exploitation of patients, said panelists at a press conference organised by All India Drug Action Network (AIDAN) on Thursday.

Gopendra Singh Parmar, father of late Sourya Pratap who was treated for dengue at Medanta - the Medicity, Gurgaon shared that more than 45% of his bill of Rs.16 lakhs was for medicines and consumables on which the hospital appears to have taken huge margins. Just lab charges accounted for another 9.5% of the bill. “The Government must frame rules to contain the rates charged by hospitals to make them affordable. Otherwise families will continue to be forced to sell their assets, beg and borrow in their desperation to treat loved ones, just as in my case,” he said.

READ: Heartbreaking stories of backbreaking medical bills


With regards to existing regulation to control the prices of essential medicines through the Drug Prices Control Order (DPCO) 2013, Dr Mira Shiva, co-convenor of the All India Drug Action Network (AIDAN) pointed out several deficiencies. “The NPPA findings that non-scheduled medicines make up around 25% of the combined bill costs is hardly surprising given that almost 90% of the pharmaceutical market remains outside price control. Hospitals are easily able to use this to their advantage by choosing to prescribe more expensive medicines. In its report, the NPPA has acknowledged that the market-based formula for fixing ceiling prices leaves room for huge trade margins," Shiva said.

The central flaw of the DPCO, 2013, she said, is the deeply flawed market-based pricing mechanism that legitimizes profiteering and high prices. AIDAN has consistently advocated for expansion of the scope of the DPCO to cover all essential and life-saving medicines and to reinstate a method of cost-based pricing that provides reasonable profits to companies, she said.

“The report has observed that a large share of the total costs comes from in-house diagnostic services. There is a grave problem of absence of regulation of the rates of diagnostics because of which, according to national surveys, diagnostics account for an increasing share of out-of-pocket expenditure in both in-patient and out-patient care. The problem is being compounded in large private hospitals because they prey on patients by charging higher than market rates as well as adding on convenience fees,” remarked Dr Dinesh Abrol, national working group on patent laws.

“Moreover, the testing and diagnostics industry is fuelled through a model of cut practice, commissions and irrational, unnecessary prescription. Exploitation is aggravated and enabled by healthcare conglomerates formed by integrating pharmacy, diagnostic centre and hospital businesses. The Government should strengthen free diagnostics schemes, put in place national regulated prices and a system of prescription audit for diagnostics. In parallel, it should break the emerging monopolies of the conglomerates which contribute to driving up costs of healthcare,” Abrol continued.

Prasanna Saligram, Janaarogya Andolana Karnataka reiterated the consequences of absence of regulation as a result of which “healthcare providers are free to practice what is termed “supplier induced demand” and indulge in over medicalization since there is an inherent information asymmetry between the provider and the patient.”

Sulakshana Nandi, joint national convenor, Jan Swasthya Abhiyan, highlighted the blatant violation of patients’ rights. “In case of both private insurance and Government sponsored health insurance schemes like RSBY that are supposed to be ‘cashless’, private hospitals regularly extract illegal payments from patients in order to make profits. This expenditure is impoverishing for many families”, she said. “Patients are commonly exploited in less obvious ways. Hospitals may have protocols that ban patients from buying medicines and consumables from outside the hospital pharmacy, refuse to display their rates or refuse to provide detailed bills” she continued.

“The Central Government has the policy space to take the lead in regulating healthcare charges and should put in place an institutional mechanism, backed by necessary legislation, to oversee the price regulation of all aspects of healthcare and all over India in a systematic manner to make them affordable” said Malini Aisola of AIDAN.

“I appreciate the NPPA conducting such a detailed and thorough analysis and identifying the systematic loot process of private hospitals. I expect the Government to take cognizance of the NPPA findings and create new policy and regulations that will deter the healthcare mafia from fleecing patients and can prevent criminal collusion between pharmaceutical companies and hospitals/doctors. It is high time that the Government takes severe action against those found guilty and punishes them,” said Jayant Singh, whose daughter late Adya Singh was admitted to Fortis hospital, Gurgaon and charged in excess of Rs16 lakhs.

 

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