inherent lacunae in indian health care systems.
The
poor quality of services offered in the public health sector and lack
of scientific pricing policy over the
corporate care’ and disintegrated pricing policy over the pharma sector are 3 main challenges in india.
Ravi
Duggal, a public health activist claims that the smaller private
hospitals are still humane and are sensitive to patient circumstances. But
corporate and big hospitals, whose bed
occupancy and revenues are dependent on insurance-backed patients or medical
tourism patients, still try to maximise their revenues, often through
malpractice. "This drives up the cost of care for most patients, and even
with cashless insurance coverage, they end up shelling out huge sums out of
pocket due to unethical functioning of such hospitals."
Pricing of drugs
Low
drug prices are now history in India. The high cost has a direct correlation
with drug prices. The earlier drug price control regime reined in the drug
prices and kept them affordable, but now, many experts think prices are more or
less similar to other countries.
"Civil society actions continue to put
pressure for price regulation, and hence certain anti-cancer drugs or devices
like stents have had a leash on their prices, but the present government is
least concerned about regulating drug prices, and this is a matter of concern,
and we have seen this play out during the COVID-19 pandemic where many drugs
became even more expensive because of the absence of adequate regulation,
There
is a government policy for pricing some drugs and devices, but it does not
cover all drugs and devices. But it’s not satisfactory.
"Even
the prices of drugs, devices and packages fixed by the government are higher
than the sum of cost of production, investment in Research & Development and
a reasonable markup. The formula adopted for price fixation is irrational,"
Health
Technology Assessment Board should provide cost-effectiveness before new
technologies are introduced. Most of the time, technology drives cost up. Health
Technology Assessments (HTA) includes quantifying whether an investments are
both clinically efficient as well as cost-effective.
Malpractise and
unethical practices in corporate hospitals:
unnecessary
procedures, interventions, diagnostics,unethical services on one side and charges
based on what their clients can afford or what insurance is willing to pay –are
two ill defined behavior in all corporate hospitals.
The
govts proposed Reforms are underway in the system-- the stride toward the
achievement of Universal Health Coverage for its 1.4 billion population but the
main hindrance is Centre’s expenditure on healthcare which still remains around
1.8% (FY2021) of the GDP as per the Economic Survey 2021.
do we need healthcare pricing reforms in
big corporate hospitals?
Healthcare pricing has always been a tricky
issue as there are two extremes in our healthcare sector. On the one hand,
basic healthcare requirements are going unmet for millions of India's poor, and
on the other hand, frugal innovation is driving many advances in making
healthcare accessible, affordable and even used by the developed nations.
A robust healthcare pricing strategy will have
to account for various costs -- infrastructure, manpower, equipment and its
maintenance, overhead expenses -- and will be influenced by the plethora of
services provided at a facility.
There are several ways to look at the
pricing of healthcare.
"How much the public system charges
for a specific treatment within the sector, at what price have they outsourced
the specific service/treatment/diagnostic/ambulatory service, how do insurance
companies fix prices and negotiate it with hospitals in public/private setting,
how much do private sector players charge and finally, who drives/controls the
pricing - whether it is the public sector, the public-private partnership
(PPP), private hospitals or the medical insurance companies,
“In
one way, insurance can set the price low and negotiate it with the hospitals.
Many hospitals empanelled themselves under government-funded schemes like
RSBY/PMJAY but paid/reimbursed only a fraction of the hospital cost. The
households paid more than half of the cost incurred in the hospitals despite
them being enrolled under public or private insurance. So in effect, neither the government
has regulated the healthcare pricing system nor has the insurance system, and
naturally not the private hospitals themselves. The private sector is driving
the cost,”
The way out: Promoting efficient
provider-decision making
“If India allocates
adequate public funds to build the public system, all pricing issues can be
controlled easily,”.
“Currently,
India has adopted a mixed kind of model of financing and provisioning, where
different players provide different types of care. The primary/secondary care
must be taken care of within the public system. This is important because more
than 63% of the out-of-pocket (OOP) payment paid by the households is
outpatient care that is not covered under any insurance.
“High-end
services can be opened up for the private sector, and the government can extend
protection for those who can pay for such services. The government must force
the private sector to offer (hospital) services at PMJAY price to all (even if
someone is not covered) since they (hospitals) have empanelled themselves under
it.
“Price
regulation is necessary. There are some examples of government intervention,
though a little late, during COVID-19 time, of controlling the price of
testing/treatment at least in some cities/states. The new emerging technology
is going to affect the care as well as cost in a big way.
Digital things(IOT,AI,Wearables,5G net)
will help in reducing the consultancy fee and diagnostic charge hopefully. The
private sector, however, entering into it differently, in my opinion, over
time, will end up identifying the patients for private hospitals where the cost
of care would be high.
"At
present, over four crore patients are hospitalised in a year, but technology will
drive the number up. So hospitals will be getting more patients in the times to
come, and more households will contribute to their profit kitty. There is no
direct answer to whether it will reduce the hospital's price and improve the
overall health of the population,"
When
politicians and policy makers talk about cost reduction and “bending the cost
curve,” they are typically referring to how much the government or insurers pay
to providers—not to the costs incurred by providers(hospitals) to deliver
health care services. Cutting payor reimbursement does reduce the bill paid by
insurers and lowers providers’ revenues, but it does nothing to reduce the
actual costs of delivering care!
It is a
well-known management axiom that what is not measured cannot be managed or
improved.
The remedy
to the cost crisis does not require medical science breakthroughs or new
governmental regulation. It simply requires a new way to accurately measure
costs and compare them with outcomes.
In the 3rd.Post of the series,we will discuss the following…
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