Moneycontrol PRO
Upcoming Webinar:Join us for 'The Future Techshot' on Sept 22, 10:30am to gain insights into role of tech in streamlining businesses. Register Now!

Hospitals and insurers don’t see eye-to-eye on COVID-19 treatment costs

The deadlock over standardised COVID-19 treatment charges continues as insurers and hospitals harden their positions, leaving patients in the lurch

August 17, 2020 / 12:48 PM IST

After the General Insurance Council released its indicative rate chart for COVID-19 treatment last month, hospitals have put out a charge structure that they believe is reasonable. These rates are 70-108 per cent higher than GI Council’s charge structure. “We have shared our rates with the GI Council. Further discussions with the council to reach a consensus continue,” says Dr Alexander Thomas, President, Association of Healthcare Providers (India).

The hospital data, collated by AHPI, is based on treatment records of six hospitals across the country, including Narayana Health, Bangalore, Medica Super Specialty Hospital, Kolkata and Bhagat Chandra Hospital, Delhi. This data forms part of the report prepared by a committee comprising insurance and hospital officials as also independent experts. Chaired by Dr S Raghunath, Professor of Strategy, Indian Institute of Management Bangalore, it was constituted to compare the AHPI’s and GIC’s costs for COVID-19 treatment at private hospitals.  

Huge gap in cost structures

The gap between the GI Council’s rates and hospitals’ charge structures is extremely wide. For example, the former has prescribed a cap of Rs 10,000 per day for isolation beds with oxygen care, while the hospital association’s estimates suggest a cost of Rs 21,931 a day. Likewise, insurers have decided to pay daily charges of up to Rs 18,000 for intensive care unit (ICU) with ventilator care, whereas the hospital body has quoted Rs 37,358. Hospitals’ charge structure has been computed assuming that a patient would have an average of 10-14 days’ stay.


COVID-19 Vaccine

Frequently Asked Questions

View more
How does a vaccine work?

A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

How many types of vaccines are there?

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

What does it take to develop a vaccine of this kind?

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

View more

What’s more, the rate card does not include treatment of co-morbidities and other complications, which can prolong your stay and inflate the hospitalisation bill significantly. “This does not apply to private and higher category rooms, as charges will vary depending upon the facilities,” the report added. Neither does it cover high-end antibiotics, immunotherapy and interventional procedures such as chemo-port insertion, bronchoscopy procedures and biopsies, pleural or ascitic tapping and tracheostomy.

Capping of charges

The cost of personal protection equipment (PPE) are capped at Rs 1,200-2,000 (and included in per day charges) in the GI Council’s indicative rate chart, depending on the severity of ailment. On the other hand, AHPI’s estimate pegs these charges at Rs 1,900-Rs 5,000. “The use of certified PPE in COVID wards is 2.4 units per patient per day at Rs 800 per PPE and is almost double in ICUs as the per-patient manpower increases in ICUs. The use of the PPE is 1.8 units per patient a day in the rest of the hospital,” the committee’s comparison chart states.

While the general insurance body’s charge structure is not binding on insurers, many have started adhering to it.                                                                      “We have started implementing the council’s rate chart issued in July. Hospitals have submitted their rate card and discussions are on. If the GI Council feels the need to revise its charge structure, it will take a call in September based on data analysis, after consulting member insurers,” says Nikhil Apte, Chief Product Officer, Health Insurance, Royal Sundaram General Insurance. Insurance companies have justified the rate caps, citing the ‘customary and reasonable charges’ condition. This clause states that treatment costs should be in line with charges for similar illnesses and service quality in the geographical location.

If both entities do not budge from their respective positions, policyholders – patients and their families – will have to bear the brunt. They will have to shell out a significant sum – up to 50 per cent in some cases– from their own pockets. “Some insurers have asked us to implement the GI Council rate card and we have to follow their instructions. In such cases, patients have to foot the bill for the difference between actual hospital charges and the claim settled by insurers,” explained a senior executive at a third-party administrator (TPA).
Preeti Kulkarni
first published: Aug 17, 2020 08:59 am

stay updated

Get Daily News on your Browser
ISO 27001 - BSI Assurance Mark