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Why &how the pricing of healthcare, especially corporate care skyrocket? What should be done?

 

The following article is based on research that was conducted by Susmita Chatterjee of Public Health Foundation of India, Carol Levin of Department of Global Health, University of Washington, USA and Ramanan Laxminarayan of Princeton Environmental Institute, Princeton University, New Jersey, USA.


The researchers considered five criteria, including cost per OPD case, cost per inpatient (IPD), cost per emergency room visit and cost per surgery. For this, they selected five hospitals, based on their willingness to cooperate and the accessibility of hospital data. Two hospitals were from north India and three were from the south. The findings are based on data collected from April 2010 to March 2011.

 

Now it's 2022. so we may add medical inflation at 12% every year that mounts almost 100%. so, we read the figures by doubling them.

FOR 140 crore people, the existing health care infrastructure is not enough.

In India, government health care services are organized into several tiers. Primary health care is provided through a network of 1.5 lakh health &wellness subcenters, 27000 primary health centers (PHCs), and 6000 community health centers (CHCs), 1200 sub-district hospitals with 30-100 bed capacity each and 600 district hospitals with 300 beds on average each and 300 govt medical colleges with700 beds on average each and another 1000 other hospitals includes big institutes like AIIMS,  army,industrial,ESI,Regional excellency centers, railway and local bodies.

Private healthcare 20 times costlier than public healthcare: study.

 

Compare costs

Hospitals/cost per case

OPD

IPD

Emergency

Major OT

Charitable hospital

200

4000

1000

50000

District hospital

200

1000

2000

4000

Tertiary care hospital

500

1500

1000

20000

Private hospital

5000

15000

50000

50000

Private teaching     hospital

Despite the high cost of treatment, the private sector still takes care of 80 per cent of all outpatient care and about 60 per cent of all inpatient care. it shows that people want good quality care thats available in private hospitals when compared with public hospitals.

Recent CCI's report:

India’s largest hospital chains abused dominance through excessive pricing, finds CCI investigation. 

The CCI investigation is the first such action against exorbitant prices of medicines and services fixed by hospitals, which have operated free of regulation so far.

A four-year investigation by India’s fair-trade regulator(Competition Commission of India (CCI)) has concluded that some of India’s largest hospital chains abused their dominance through exorbitant pricing of medical services and products in contravention of competition laws.

The CCI investigation is the first such action against exorbitant prices of medicines and services fixed by hospitals, which have operated unencumbered by regulation so far. The watchdog’s action could potentially rein in the prices of medicines and healthcare equipment, or at the very least, bring transparency in the way hospitals sell these items, according to competition lawyers.

Some hospital room rents exceeded those charged by 3-star and 4-star hotels, according to the findings by the DG, who examines anti-competitive practices.

The investigation found that these hospitals do not allow the use of purchase of consumables, medical devices, medicines and medical test results from outside, adding that patients use the service of in-house pharmacy and laboratories for ease of convenience

27 crore  Indians are poor.  ---  How to define the poor?

In times when a daily expenditure of Rs 27 has been set as the cut off mark for deciding whether a person is below or above the poverty line, the outpatient treatment (OPD) services in private hospitals charge as high as Rs 2,213. The cost of visiting an OPD in district hospital is Rs 94 which is also quite high for a poor person if one considers the poverty line decided by the Planning Commission.

Similarly, in-patient stay cost is  Rs 394 per day in a district hospital, Rs 614 in a tertiary care hospital, Rs 1,959 in a charitable hospital and Rs 6,997 in a private hospital.

According to the research, the emergency visit cost is the lowest in  charitable hospitals (Rs 385) and highest in private hospitals (Rs 21,873). Surgical procedures are very expensive, both in private and charitable hospitals—Rs. 24,016 and Rs. 27,430 per procedure. The emergency visit cost at a private hospital is also exceptionally high compared to that of other hospitals.

 

1.While India’s healthcare costs look inexpensive to medical tourists, they are costly, almost unaffordable, for the average Indian citizen. The healthcare expenditure of Rs 1500 for a poor family may seem like a paltry amount, but it is 50 per cent of their monthly income.

the 68th round survey of the National Sample Survey carried out during July 2011-June 2012 reveals some alarming facts about how little money people have to spend on food, nutrition and health. 

Household Consumer Expenditure in India" survey conducted by the National Statistical Office (NSO), the average monthly spending by an individual is at just  Rs.1500/-in 2021. 

Reveals the average expenditure on goods (food and non-food) and services.

Distribution of monthly consumption expenditure in urban and rural India 2019-2020. As of December 2020, around 50 percent of households in urban India spent no more than 2.4 thousand Indian rupees per month. Meanwhile, 37 percent of rural Indian households had at most 1.6 thousand rupees to live on.

The socalled economic growth has maintained huge inequality in per capita expenditure on very essential needs such as food, health and education. The level of inequity is very-very high in the context of per capita expenditure on education and health.

On education, the bottom 5 per cent population in rural India is spending just Rs 7.54 per month whereas top 5 per cent in urban India is spending a 120 times higher amount of Rs 908.12 per month. This disparity is one of the reasons why the largest section of the society, the poor, is denied Right to Education with quality. The spending difference on medical expenditure in these two categories is 40 times. Just to inform you on expenditure levels for availing conveyance services, the top 5 per cent population in urban India spends 116 times more than the bottom 5 per cent rural population. Even today, the average Indian is struggling hard to get right to quality education and basic health services and because of uneven growth they not able to spend on it. It also indicates that withdrawal of the state from essential sectors is really causing distress in almost every segment of society.

Emerging pointers

The Indian insurance policies are such that their first effort is to evade the payment or pay only a portion of the bills of the corporate hospitals.

 As per modest approximation   any major procedure costs between Rs 2 lakh and Rs 20 lakh. The follow-up upkeep cost is separate.

 The main effect of the rising cost is, therefore, either complete non-availability or accessibility of poor-quality health care; patients are even pushed to poverty. 

The Government establishments can look after only a small section of patients, waiting period is huge, add to this uncaring attitude of staff, prevalent unhygienic conditions, gross inconsistency in the demand and supply of facilities, and the picture looks depressing.

A patient, thus, has to knock at the gates of private institutions. The corporate hospitals are beyond the touch of even middle-class people.

 

One of the major worries for most senior citizens is declining health. In the face of steep payments for health insurance and increasing healthcare costs, managing health-related expenses can be really difficult. Health insurance does not take care of all your requirements like day-to-day care (OPD needs). Even if your cover is adequate for hospitalization, various constituents do not get paid by insurance companies. Therefore, you need to keep aside some money for your healthcare needs as you come close to age of 50 years. 

Unfortunately, many of the elderly don’t have health cover and are possibly out of range for getting one because of their circumstances. They can find out if they can get covered as dependents of their children’s corporate health plans.

 Improved life expectancy, quick urbanization and lifestyle changes have led to the advent of varied problems for the elderly in India. The elderly population undergoes high rates of morbidity and mortality due to infectious diseases. Unattended chronic disease, high-priced medicines and treatment and malnutrition are part of old age life in India as there is no system of reasonable healthcare.

Insurance cover that is elderly-sensitive is practically non- existent in India and, if provided, it’s very costly, limited to hospitalization and with many omissions. Healthcare system for elderly in India is awfully bad and very costly which many can’t afford as equated to developed countries where government schemes and healthcare system look after their senior citizens.

In present times, people normally live longer but a long life is valuable only if it is disease-free. India faces a hastily increasing healthcare crisis. In addition to recurrent diseases like dengue, we have chronic lifestyle-related disorders such as diabetes. This is compounded by one of the fastest rising elderly populations in the world: by 2050 we will have 240 million elderlies.

Health care has become a profitable business venture. Most corporate hospitals are prosperous, growing, opening new projects all over the globe but charity, concession, assistance do not exist in their vocabulary.

Many of these hospitals have got prime land on subsidized rates, in lieu of which they were supposed to deliver free beds to poor and worthy patients. But hardly any of them do that. As in investigations, many drugs are needlessly prescribed without sound symptoms, antibiotics, vitamins, tranquillizers, analgesics, food supplements are the common ones.

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what type of measures the govt should implement to regulate the prices of drugs &diagnostics which are major contributing factors for about 70% of healthcare pricing.?

Does introspection among corporate  fraternity can change the scenario?

We will discuss it in the next post...

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