Thursday, November 23, 2017

High Private Healthcare Costs and Role of Govt.

If hospital bills Rs 100, direct plus indirect cost of providing healthcare service is Rs 75 to 90. Every one talks about Rs 100 charged to patient. Nothing is done to reduce / subsidize Rs 75 to 90 expenses. Electricity bill, water bill, medical equipment, taxes , real estate building cost etc etc- nothing is subsidized and charged at actual.

There are some 200+ laws which hospitals have to follow. If govt is serious about affordable healthcare, it should ensure that hospitals survive. Govt itself is not spending and day by day making it difficult for hospitals to survive through these laws and bills like KPMEA.

Govt taxes all vendors supplying services and goods to hospitals. These vendors include those taxes/ gst in their bills. These taxes/ gst are indirectly paid by hospital. All salaries to doctors and employees, govt taxes it in the form of income tax. This income tax/ tds is deducted and paid by hospital. After paying to doctors ( income tax) , employees ( income tax), housekeeping vendor (gst), security vendor ( gst), Maintainance vendor (gst), electricity bill, water bill, bmw bill (gst), medical equipments (gst), AMC/ CMC ( gst), drugs and consumables (gst), EMI of loans, canteen bill ( gst) etc etc whatever profit remains govt taxes it at 25 to 35 % as Corporate tax. In this entire value chain, govt earns more than individual doctor, individual employee,individual vendor and hospital.

Govt must either invest in healthcare infrastructure or at least reduce the above mentioned tax burden and laws so that hospitals can survive and provide affordable healthcare.

Private healthcare contributes to 75% of healthcare services provided in India. Private healthcare is delivering excellent high quality patient clinical outcomes thanks to our talented doctors and advanced medical equipments.

Private healthcare is providing high quality healthcare services at 1/10th cost when compared to developed world countries.

Government spends less than 1.5% gdp on healthcare which is extremely low. Government hospitals could provide services at lesser price because their cost of running hospital is financed from tax payer’s money. I heard that Govt spends 100 to 200 cr + for running one tertiary care hospital. If this amount is to be charged to patients, prices at Government hospital will also rise. Resident doctors are exploited at a very low salary / stipend in government hospitals. Doctor to patient ratio and nurse to patient ratio is grossly inadequate in many government hospitals.

People are taking health for granted and not able to understand that high costs are involved in receiving medical treatment. Private Healthcare insurance penetration is less than 5%. Many a times insurance coverage amount is very less. We are ready to buy car insurance at 10k but not our body ( health) insurance at similar range price per annum. The way car insurance is compulsory for every car, we should make health insurance compulsory for every person. We need to create more awareness in society.

Dr Sameer Kulkarni

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