Supreme Court’s order on corona testing is wrong

By: |
April 9, 2020 5:50 PM

SC shouldn’t get into administrative issues & telling private labs not to charge will dissuade them from testing

Once again, that is a good reason for the government to bear the cost of the test.Once again, that is a good reason for the government to bear the cost of the test.

The Supreme Court ruling that the corona testing done by private sector laboratories has to be free – ‘extending philanthropic services in the hour of national crisis’ – is unfortunate, apart from looking like overstepping into the role of the executive which had, as it happens, fixed the rate at which the private sector labs would help buttress the government efforts in testing. By not allowing private labs to charge for the tests, the SC has ensured they will probably stop offering the facility now as they will be paying for the kits and for their staff while earning nothing; to that extent, the nation has lost as India needs to dramatically ramp up testing – if the corona virus is to be beaten – beyond what just the government can offer. Indeed, even if the Supreme Court had to intercede to ensure that all the country’s citizens got access to private sector labs for their tests, the best course was to direct the government to make all the payments to the private labs. After all, this is a pandemic, and it is in the country’s interests to ensure that as many people get tested as is possible; to the extent an expensive test keeps people away from testing, it is the country that suffers. In any case, if a large number of people who are infected are asymptomatic – 76% in the case of Maharashtra as its latest health report on corona shows – they are not even going to volunteer for testing under normal circumstances, much less so when they have to pay large sums for the test. Once again, that is a good reason for the government to bear the cost of the test.

While that is something for the government to ponder over, what SC seems to have ignored is that if better-off people are willing to pay for the tests, this is that much more pressure off the government’s testing infrastructure; in which case, the poor who go to government labs for free tests have a better chance of being tested. Also, since more people will die – albeit over a longer period of time – of other diseases than from the pandemic, is the court opening a window to ensure most major tests are carried out by private labs for free; after all, as in the case of the corona tests, if the same tests are done at an AIIMS, it will be free or will cost a fraction of what it does in private labs.

Apart from the fact that too many in positions of authority believe the private sector is ripping off people – that is why the government has price controls for medicines despite Indian prices being among the most affordable in the world – what most don’t appreciate is that public sector tests aren’t ‘free’ either. Like education in government schools and colleges, or operations in government-owned hospitals, those availing the services aren’t paying for them; to that extent, they are ‘free’, but in reality, they cost the taxpayer a lot of money. In the case of education, for instance, ‘free’ government education costs a lot more than what private education does; while this is certainly true of school education, the National Assessment and Accreditation Council (NAAC) data showed that, in 2016-17, the subsidy in JNU was Rs 5.8 lakh per student. In the case of foodgrains, FCI’s costs are much higher than those of private sector firms; but FCI’s costs stay hidden as the taxpayer is paying for them. Indeed, while it is probably true that private hospitals try and price-gouge patients, a large part of this will disappear when the true costs of operations/procedures in government hospitals are made public. It is important that those in positions of authority – and this includes the courts – keep in mind these realities as well as be aware of the fact that lowering profit margins also reduces supply.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Political Posturing: Punjab’s anti-farm-reform laws are intended to make it seem like the Centre’s wanted to abolish MSP
2Powering change: Open access must for atmanirbharta vision’s fruition
3One for the farm: Decoding Punjab amendments