Reforming India's Healthcare System

HEALTHCARE IS INDIA’S most distressed sector.

- Minhaz Merchant

In cities, private hospitals over-charge patients at will. In villages, healthcare facilities are rudimentary. In towns, government hospitals provide appalling patient care: unsanitary operating theatres (OTs), poorly trained staff and crumbling infrastructure.

Corruption is rife. The deaths of dozens of children from encephalitis in Gorakhpur and other towns in Uttar Pradesh is just one indication of the urgent need for healthcare reform in India. There are several others, cutting across the urban-rural divide.

The government has started tackling one end of the problem: exorbitant prices of medical equipment and essential drugs. The total value of medical devices used in Indian hospitals is $4.9 billion (Rs 31,600 crore). Most are manufactured by multinational companies. The margins are huge. Take the example of cardiac stents. The cost of drug-eluting and bio-degradable stents has now been capped at Rs 29,600. Till the National Pharmaceutical Pricing Authority (NPPA) stepped in, patients were charged up to Rs 1,50,000 per stent. Mark-ups occur at every stage: wholesale distributors, retail stockists and (steepest of all) hospitals.

Despite the caps, private hospitals will always find a way to protect their profits. Specialist doctors make the rounds of patients in hospital rooms every morning. Two minutes of a cursory examination (and often not even that) leads to a bill of several thousand rupees in some upscale private Mumbai and Delhi hospitals. Doctors and hospitals have a preset sharing formula for the “visiting” fee. To counter price caps on medical equipment and essential branded drugs, private hospitals are also charging more for laboratory tests (many wholly unnecessary), operating theatre fees and surgery. There’s little a patient, vulnerable as he or she is, can do about it.