Experts argue against standardisation of rates for medical care

Analysts in the sector also predict that the decision cannot be implemented hastily.

Private hospitals and associations have said that a Supreme Court suggestion that standardised rates be established for various medical procedures should not be implemented without a proper analysis of costing, patient requirements and the expertise of doctors.

They argue that treatment procedures at hospitals are a service and should not be compared to a product for which a standard price can be fixed. “Our national goal should be to ensure that all patients can access the care they need, at a quality that meets their requirements, and at a price that they can afford,” Viren Shetty, Executive Vice Chairman, Narayana Health, told Moneycontrol. “A single price for procedures penalises high quality, reduces patient choice, and forces our best and brightest doctors to leave the country,” he added.

Earlier this week, the Supreme Court directed the Centre to establish standardised rates for various medical procedures and criticised the significant variation in prices of medical treatments at government and private medical facilities. The court emphasised that Indian citizens possess a fundamental right to healthcare, and the Centre cannot evade its responsibility in this regard.

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“Prices of services cannot be measured like a product. A neurosurgeon with 20 years of experience and another with 5 years of experience will not have the same rate per sitting,” said an expert on the matter, requesting anonymity.

Experts add that the prices of these services must be decided keeping in mind the high medical inflation in India. “Scientific costing has to be done before standardisation of rates,” said Dr Alexander Thomas, Patron, Association of Healthcare Providers India (AHPI). “We also need categorisation of hospitals based on the location and type. It cannot be one size fits all.” Thomas added that AHPI would approach the Supreme Court and explain its concerns.

Implementation will be hard, say analysts

Analysts tracking the sector also said that the decision cannot be implemented hastily. CLSA said that the decision is negative for private hospitals, although difficult to implement. Analysts at Nuvama said that implementation of the decision is likely to be a challenge and may face strong resistance given that it is a state matter and the ecosystem is skewed towards private hospitals. However, they add that a price cap on simple procedures such as cataract surgeries, knee replacements, etc is more practical.

The case originated from a Public Interest Litigation (PIL) filed by the NGO 'Veterans Forum for Transparency in Public Life,' represented by advocate Danish Zubair Khan. The PIL urged the court to instruct the Centre to determine rates for patients according to Rule 9 of the Clinical Establishment (Central Government) Rules, 2012.

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The Supreme Court said that if the Central government failed to find a solution, then it would consider the petitioner's plea seeking the implementation of Central Government Health Scheme (CGHS)-prescribed (standardised) rates. The CGHS is a health scheme catering to current and retired Central Government employees and their families. It provides cashless medical treatment to beneficiaries. They can receive treatment at empanelled private hospitals without having to make any upfront payment.

Under the Clinical Establishment (Central Government) Rules, 2012 mentioned in the petition, every clinical establishment has to display the rates charged for each type of service provided, as well as the facilities available, for the benefit of the patients. This has to be done in the local language as well as in English. Hospitals are allowed to charge patients for each procedure and service within the range fixed by the Central Government from time to time in consultation with State governments, according to the Rule.