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MC Analysis | Why India’s healthcare sector needs a national regulator

It will be in our national interest to have a professional regulator for hospitals which can oversee all aspects including pricing of services in a scientific manner

October 04, 2022 / 02:38 PM IST
(Representational image)

(Representational image)

Last month, the Competition Commission of India found after a four-year investigation that some big hospitals were charging exorbitant prices for medical services.

Overcharging by hospitals has been a point of contention among patients for a long time. Government insurance schemes like CGHS, or for that matter private insurance companies, fix the prices for reimbursement, but on what basis? There is no answer as there has not been any scientific study on the costing of medical services in our country.

The way out is to have a professional regulator for hospitals who will oversee all aspects from quality in healthcare to the cost of services.

Healthcare has evolved from the 1940 and 50s when the patient had full faith in doctors and hospitals. Today healthcare delivery is very complex ranging from primary to quaternary care and supplemented with ever-evolving technology. In real terms, patient safety has vastly improved (resulting in increase in life expectancy from around 33 in 1947 to 69 in 2020) — but going by the perception in the minds of patients, healthcare today is considered unsafe sometimes as hospitals do not take enough care in communicating clearly with patients and keeping them in the centre when decisions are taken about the treatment plan.

Why Regulate

In a democratic setup, the government is duty bound to regulate those products or services which affect the wellbeing of the community at large. Healthcare comes first.

It is incumbent upon the government to impose a set of conditions, which a healthcare organization must comply with, before and after it is permitted to operate in the country. These should be based on the minimum standards of inspection, enforcement and public accountability.

Accordingly, it needs to be ensured that any hospital offering healthcare services has the requisite infrastructure, personnel, equipment, and has standard operating procedures in place, commensurate with the scope of treatment services it intends to offer.

For example, if a hospital plans to offer tertiary care in neurosurgery, it has to have a doctor with a MCh in Neurosurgery and appropriate diagnostic and therapeutic equipment. Similarly, hospitals need to employ a minimum number of appropriately-qualified nurses for a specified number of beds in the general wards and in critical care wards, and the same goes for other staff, medical equipment, and other infrastructure as per the defined scope of services.

Medical education in India was regulated by the Medical Council of India, which has been replaced by the National Medical Commission. But hospitals as such are regulated by the state governments. For purpose of uniformity, the Government of India introduced the Clinical Establishments (Registration and Regulation) Act in 2010, and passed it on to all state governments to adopt through legislation, because healthcare is a state subject. Out of the 28 states, only 12 are known to have adopted the Act, and even there it is hardly found to be effective. The Act is being implemented directly by the state governments, and there is no independent regulator.

Why Government Should Not Regulate

The global trend is to separate the government and regulatory bodies for the simple reason that any business, and more so healthcare, is too complex to have competency within a government setup. Moreover, the government is the policy making agency. Implementation should be left to specialist, professional and independent bodies.

For example, in India we have quite a few regulatory bodies such as the Telecom Regulatory Authority of India (TRAI), the Food Safety Standards Authority of India (FSSAI), the Insurance Regulatory & Development Authority of India (IRDA), and the Petroleum & Natural Gas Regulatory Board (PNGRB); which are known to have been functioning with very good results. In fact, there is yet another trend where even regulatory bodies rely upon independent conformity assessment bodies. For example, the PNGRB is a lean body and does not have inspectors on its rolls; thus, it utilises the services from QCI-accredited inspection bodies. All this brings professionalism, objectivity, and transparency, which generate credibility and confidence among users.

Balance Equations

Healthcare services in India are at a crossroads. The Ayushman Bharat Yojana, and the National Digital Health Mission are game-changers. At the same time India needs to double to number of hospital beds for treatment to come close to WHO standards. About 85 percent of tertiary care in India is provided by the private sector. Looking at paucity of budgetary allocation for healthcare (1.3 percent of GDP), it is expected that the bulk of future investment will also come from the private sector.

However, there is a negative perception among the public about the private sector, which is often accused of profiteering by providing healthcare, which is a basic necessity. On the contrary, most private hospitals cannot operate in a financially sustainable manner. Universal healthcare is a common good, but private hospitals which offer such services are only partially compensated by the governments.

Quality healthcare is a basic need, and it has direct impact on the wellbeing of society and national productivity. It is in this context that there should be independent/professional regulatory body for hospitals, which will balance both sides of the equation: the patients and the hospitals. Private sector healthcare providers face a plethora of problems, including harassment from the patients’ side and from the many statutory agencies. This has dampened fresh investment in the health sector.

Given this, it will be in our national interest to have a professional regulator for hospitals, which can oversee all aspects including pricing of services in a scientific manner. The government only needs to work out how such a regulator will function across all states in India.

Dr Girdhar Gyani is Director General, Association of Healthcare Providers (India). Views are personal, and do not represent the stand of this publication.
Girdhar Gyani is Director General, Association of Healthcare Providers (India). Views are personal, and do not represent the stand of this publication.
first published: Oct 4, 2022 10:59 am