Today in New Delhi, India
Oct 19, 2018-Friday
-°C
New Delhi
  • Humidity
    -
  • Wind
    -

Delhi government profit capping policy: Will patients actually benefit?

Medical experts say the Delhi government’s draft policy that introduces high-risk packages and waivers for eemergency patients could prove counterproductive.

delhi Updated: May 31, 2018 17:29 IST
The draft policy caps the profit margin on drugs and consumables at 50% of purchase price.(Shutterstock)

In a move aimed at bringing down the cost of treatment in the city, the Delhi government announced its profit capping policy for private hospitals on Monday. According to the draft policy, hospitals will have to halve the bill amount in case a patient dies within six hours of coming to emergency ward. If a patient dies within 24 hours, hospitals have to waiver 20 per cent of the bill.

The policy also caps the profit margin on drugs and consumables at 50 per cent of purchase price and for implants at 35 per cent of the purchase price.

The question is, if the patients will actually benefit? “Yes, most definitely,” said Dr Rakesh Gupta, former president of the Delhi Medical Association and one of the members of the committee that recommended the policy. “The monetary benefits of capping mark-ups on drugs and consumables and waiver of parts of the bill will transfer to patients. In fact, we realised that when it comes to emergency, most hospitals charge nominal rates,” he said. However, it is a blanket policy which means even hospital treating emergency patients on “nominal rates” will have to slash the amount due.

Dr Gupta suggests a way around it. “Hospitals charging nominal rates must have an institutional policy of maybe increasing the rates for all patients a bit and then giving a discount to those who die. We are suggesting that the maximum number of patients bear the cost of treatment of a few,” Dr Gupta said.

Cross subsidy not loss

This principle of subsidising bills from a common pool also guides the high-risk packages suggested by the policy.

The draft says that in cases where complications are expected, a high-risk package should be offered costing 20 per cent more than normal rates, but insuring patients against paying more in case the complications do happen. However, experts fear that this method of cross-subsidy could run smaller hospitals and nursing homes to the ground.

“The rationale behind the high-risk package is that out of the pool of people who do pay for it, only a few would end up requiring it. Hence, the money collected could be used for the treatment of the few. But, in cases of smaller nursing homes and hospitals, with fewer beds, this might not be feasible. Maybe, there should be a graded formula,” said Dr Girish Tyagi, secretary, Delhi Medical Council.

For normal treatment packages, in case of complications, hospitals will have to charge patients half the rates for all follow-up procedure as per the policy. “We are not fixing prices for procedures but saying that the ultimate cost to the patient should be within a reasonable range of the estimate provided. And in case of halving the procedure cost, it is something that is already being followed by the Central Government Health Scheme,” Dr Gupta said.

Restricting choice

Most medical experts say the penalty clause that for emergency treatment could lead to hospitals turning away patients. “If such a law comes in, it is possible that hospitals will start referring critical patients to public health facilities,” said Dr Yatin Mehta, chairman of institute of critical care and anaesthesiology at Medanta-The Medicity.

In fact, he says, patients might spend the golden hour — when the chances of survival in an emergency are the highest — travelling from hospital to hospital.

What about the Profits

Hospitals say capping of prices, fixed packages, and bare minimum rates have made it difficult for them to get their fair share. “Yes, the mark-ups on drugs and consumables shouldn’t be as high as 1,000 per cent. Hospitals can work with a 50 per cent mark-up, provided it is applicable for all services,” said Dr Aashish Chaudhry, managing director of Aakash Healthcare Super Speciality Hospital.

With the government asking hospitals to formulate treatment packages and not add “arbitrary charges”, the hospitals are at a loss on how to charge patients.

“Most private players are making loses or single digit returns which don’t even cover the cost of capital. Some of the recommendations may adversely impact patient care and quality,” said Max Healthcare authorities in a statement.

Under the draft policy, which is currently open for public consultation, the government will have the power to cancel the licence of erring hospitals.

In December last year, the government had cancelled the license of Max hospital, Shalimar Bagh for wrongly declaring a newborn dead. The court of the financial commissioner has given the hospital interim relief to stay open and the Delhi Medical Council has found that there were procedural lapses, but the doctors were not negligent.

First Published: May 31, 2018 12:42 IST