Make healthcare affordable! To compete with expensive private sector, raise public health spends

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August 22, 2020 6:30 AM

To be sure, the costs at public hospitals are heavily defrayed by the government, whereas private sector hospitals have to pass on the costs to patients to stay afloat.

The fact is that patients are caught between millstones—the high cost of private healthcare and the inadequate, hence perpetually over-burdened, public healthcare infrastructure & personnel.The fact is that patients are caught between millstones—the high cost of private healthcare and the inadequate, hence perpetually over-burdened, public healthcare infrastructure & personnel.

The Bihar government has sealed a private hospital in Patna and booked key functionaries for allegedly overcharging a Covid-19 patient. While the district officials, as per The Indian Express, claim that the hospital had not displayed the rates for various facilities and services, as required under the Clinical Establishments Act, the hospital authorities have claimed that the computerised bill handed to the patient has all the details. The Bihar government has also ordered 28 private hospitals in the state capital to submit a detailed report of the amount charged to each Covid-19 patient treated by them. Regardless of the Patna hospital overcharging the patient and violating rules on transparent communication of rates or otherwise, private healthcare in the country undoubtedly is quite expensive—the NSS 75th round Key indicators of social consumption in India: Health pegs private sector hospitalisation costs at six times that of hospitalisation at a public sector facility. And, with out-of-pocket (OOP) expenditure accounting for nearly 70% of health expenditure by an individual, the burden on the patient is heavy. To be sure, the costs at public hospitals are heavily defrayed by the government, whereas private sector hospitals have to pass on the costs to patients to stay afloat. But, if there is overcharging by private hospitals, an action like Bihar’s in the present instance or Delhi’s price-capping—a central government panel recommended this—is hardly the remedy.

The fact is that patients are caught between millstones—the high cost of private healthcare and the inadequate, hence perpetually over-burdened, public healthcare infrastructure & personnel. This newspaper has earlier highlighted the lack of doctors, nurses and paramedical staff—as against international standards—in the country. With only about a third (36%) of the overall annual healthcare expenditure coming from the government (the Centre and the states), public healthcare suffers from severe deficiencies—indeed, Bihar had one functioning government-run healthcare facility (upto the secondary level) for every 10,222 people, as per Rural Health Statistics 2019, against one for every 6,752 people at the all-India level. The state would likely have a poor showing on healthcare professionals in the public sector, too. A chronic public-healthcare deficiency has led to a spike in demand for private healthcare, even when it is nearly unaffordable—NSS data shows that over 70% of the patients in both rural and urban areas sought private healthcare. The solution to price-gouging, real or imagined, by the private healthcare sector lies not in price-capping or other such measures, but in increasing competition through increased government spending to create a robust public healthcare system. India’s share of public expenditure in overall healthcare expenditure lags all its BRIC counterparts and even some low-income countries. The National Health Policy 2017 talks of increasing public spending on health to 2.5% of the GDP by 2025, while the world average is already 6%. Clearly, India—the state governments, primarily, since health is a state subject—needs to get more ambitious on this regard.

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