By Invitation. Needed: price controls on healthcare services

Every year in India, 63 million people are pushed into poverty due to healthcare payments. And in the absence of social security, people have to set aside a major part of their savings to meet unforeseen healthcare needs.

At one level, it is necessary to enhance government spending on healthcare to provide publicly funded health services. But till that is done, the government needs to put in place a quick-response system to protect people from exploitation by private healthcare providers. And this is a constitutional obligation.

There is ample evidence of the profits that some private sector providers make by selling medicines and consumables to their patients. An analysis, by the National Pharmaceutical Pricing Authority (NPPA), of Fortis Hospital’s bill of medicines and consumables of the late Adya shows the exorbitant charges: an IV Infusion set procured for ₹8.39 is sold to the patient for ₹115, a margin of 1,271 per cent. Similarly, a disposable syringe procured for ₹15.90 was sold to the patient for ₹205, a margin of 1,189 per cent. This more than ever illustrates the need to regulate hospitals’ margins with a ceiling on prices of all essential and life-saving medicines and consumables.

To address the high margins in medical devices like cardiovascular stents and knee implants, NPPA had imposed a ceiling on the maximum retail price (MRP) of these devices. Private hospitals were then seen imposing procedure charges, thereby refusing to pass on the benefit to patients. Price controls need to be imposed not only on medical products but also on healthcare services to ensure affordable health care.

So far, the regulation of private healthcare has focussed on setting quality parameters through accreditation, registration, public health standards and standard treatment guidelines. Central and State governments have also introduced various insurance schemes like Rashtriya Swasth Bhima Yojana (RSBYM) to lessen the financial burden, but they have failed in that objective. With health being a State subject, the Central government says it cannot step in to regulate healthcare charges.

Nevertheless, the Central government is asking States to adopt the Clinical Establishment Act (CEA) to effectively control private clinical establishments. And State governments can adopt the CEA in the avatar adopted in Parliament or bring in their own versions of the Act.

But even these policy initiatives to regulate the private sector do not touch the most important aspect of healthcare — that is, cap prices on procedures and services. There is no reference to having a ceiling on healthcare charges in CEA.

The Central government, which has the experience of capping the price of healthcare services under the CGHS scheme, should use its powers under the Concurrent List to stop the burden-shifting and establish a regulatory authority to fix ceiling prices on healthcare services. The Concurrent List gives the Central government the legislative authority to impose price controls and maintain supplies and services essential to the community; in other words, it allows the Centre to regulate healthcare charges.

Working complementary to the CEA, this authority can then frame regulations to control healthcare prices. And hopefully, through this a beginning can be made to address the high cost of healthcare to ordinary people.

The writer is with Third World Network. Views expressed are personal.

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