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Selling a bill of goods

india Updated: Sep 01, 2011 10:40 IST
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Two days ago, Vijay, who works with me as a driver, came to me in tears. His wife was seriously ill. He had to rush to the village where she lives, and he needed a loan. Where had she been admitted, I asked. “Private mein,” came the reply.

Vijay embodies many of the statistics on healthcare: 80% of India’s healthcare expenditure comes from private sources; government spends a pathetic 0.9% of our GDP on healthcare (compared to Brazil’s 3%) and medical expenses are a big reason for rural indebtedness.

This government’s proposal to slap service tax on hospitals is only going to make a bad situation worse. The announcement of 5% service tax on all services, including diagnostic tests, provided by hospitals with at least 25 beds and central air-conditioning was made by finance minister Pranab Mukherjee while presenting this year’s budget. Translated into rupees, this means that you are going to have to pay Rs 5,000 to Rs 10,000 more for heart surgery and at least Rs 20,000 more for cancer treatment.

The proposed service tax is, simply put, a Bad Idea. Here’s why. First, as pointed out in an open letter to the aam aadmi by heart surgeon Devi Shetty, air-conditioning in a hospital is not a luxury. It is a legal requirement. No operation theatre or blood bank can legally function without air-conditioning. You cannot have an ICU without air-conditioning. Machines for certain diagnostic tests — CT scans and MRIs, for instance — have to be kept in air-conditioned rooms. Moreover, air-conditioning is often helpful in keeping infections down. This is as true for ‘five star’ hospitals as it is for government ones. So, the notion that hospital air-conditioning is a luxury, is laughable.

Second, government seems to have abdicated its responsibility in providing comprehensive healthcare to our people. Government hospitals are in appalling conditions. Go to a premier institution like the All India Institute of Medical Sciences (AIIMS) and see stray dogs and monkeys roaming the corridors along with harried patients hustling for two minutes with equally harried doctors. Most government hospitals have a chronic shortage of beds. Worse, is a lack of faith among most people that quality healthcare can be found in a government setting. For the very poor, the choice is not between government and private healthcare, but between private healthcare and death.

Third, this government’s notion of who is ‘rich’ and, therefore, fair game for extra taxation is faulty. Extend the medical treatment-as-luxury debate. Medical expenses are never a matter of choice: no one chooses to fall ill. How is the middle-class to cope with the additional medical expense? How are the elderly, who need treatment most, supposed to manage? What happens to someone like my mother, a 78-year-old widow who suffers from diabetes and heart-disease? What happens to the retired private sector executive who lives off the dwindling returns on his provident fund and must already grapple with food inflation and the rising cost of living?

Fourth, a fatter medical bill has serious implications on preventive healthcare. India has the most cancer patients, diabetics and heart disease patients in the world. By 2015, we’ll be spending $265 billion in treating these non-communicable diseases, says Shobhana Kamineni, executive director, Apollo Hospitals. Preventive check-ups that can in the long-term save tens of thousands of rupees, are already out of the reach for most people. Push up the cost of diagnostic tests by another 5% and you’ll push these tests further out of reach.

Finally, there is the question of attitude. Private hospitals have been asking for infrastructure status so they can expand even to rural areas. But the government continues to believe that private healthcare must somehow rise above the profit motive. It’s absurd to expect the private sector to be Mother Teresas, especially when it’s filling a gap created by the government. But removing service tax will be the easy part, and given the reaction, also the inevitable part. In post-liberalised India, changing mindsets will be much, much harder.

(Namita Bhandare is a Delhi-based writer)

*The views expressed by the author are personal