How a healthcare system partial to privatisation fails the poor

In a 4 June order, the Directorate General of Health Services issued a list of private hospitals in Delhi that are mandated to provide 10 percent of their total inpatient beds and 25 percent of their outpatient services free of charge to patients from the economically weaker section. PRAKASH SINGH / AFP / Getty Images
29 July, 2020

On 12 June, an image of the pricing list for COVID-19 treatment at a Max Healthcare hospital went viral on social media. Titled “Per Day Charges for COVID Management,” the banner displayed package rates for patients in a general ward as high as Rs 25,090. The package plans did not include the cost of COVID tests, “high value medicines” and management of co-morbidities, all of which the hospital slotted under exclusions to be charged separately.

Max Healthcare subsequently clarified that the chart was from their Patparganj facility in Delhi. The hospital tweeted that the chart “did not carry all the facts such as inclusions of routine tests, routine medicines, doctor and nurse charges etc.” It included another image showing the hospital’s COVID-19 package charges per day. A single room was priced at Rs 30,400, an intensive-care unit room at Rs 53,000 and an ICU with a ventilator at Rs 72,500.  Such treatment costs, prohibitively expensive for the vast majority of the country, have reignited a conversation among public health activists regarding the need to make private healthcare facilities available for and accessible to economically disadvantaged patients.

In an order dated 4 June, the Directorate General of Health Services, a department under the Delhi health ministry, issued a list of 56 private hospitals that are mandated to provide 10 percent of their total inpatient beds and 25 percent of their outpatient services free of charge to patients from the economically weaker section, or EWS. In Delhi, patients whose family income does not exceed Rs 7,020 a month qualify as EWS patients. The order also identified hospitals that are mandated to reserve free beds for COVID-19 EWS patients.

Much before the public health emergency brought about by the COVID-19 pandemic, the Supreme Court had ruled in favour of making the private healthcare sector inclusive of EWS patients. In a July 2018 judgement, the court directed that private hospitals built on subsidised government land must offer free treatment to patients from economically weaker sections. The court said that if hospitals flout this order, their lease may be cancelled.

In 2000, a committee under the chairmanship of Justice AS Qureshi was constituted to lay out guidelines for free treatment for the poor in private hospitals. This committee came up with the criteria of reserving 10 percent free beds in the in-patient department and 25 percent free beds in the out-patient department in hospitals which received land on concessional rates. “Delhi’s private hospitals located on government land were identified,” Ashok Agarwal, a lawyer who runs a non-profit called Social Jurist, said. “As of today, we have nearly 550 EWS beds.” Agarwal has been routinely filing public interest litigations to secure health and education rights for the economically disadvantaged. In 2002, Social Jurist moved the Delhi High Court against 20 private hospitals which had failed to ensure free treatment to the poor, in violation of the land deeds signed by them. In a March 2007 judgement, the high court ruled that the criteria recommended by the Justice Qureshi committee was to be adhered to, not just by the 20 respondent hospitals in Agarwal’s petition, but also “all other hospitals identically situated.”

According to public health activists, the larger problem is the culture of non-compliance in the private healthcare sector despite attempts at regulation. This is evident from a DGHS order issued on 14 May that directed private hospitals to comply with their EWS patient obligations. The order stated, “It has been brought to the notice of this Directorate that despite identified private hospitals being under obligation to provide free treatment to the extent prescribed by Hon’ble Supreme Court of India … to eligible patients, some identified private hospitals are compelling EWS patients to pay for either COVID-19 test or PPE Kit,”—personal protective equipment—“or both which is in contravention to the directions of the Apex Court.” Directing all identified private hospitals to provide free treatment to EWS patients, the order added, “If an eligible patient of EWS category is denied indoor treatment by the hospital authorities, despite the treating/ referring doctor advising for admission and the hospital having the vacant bed in the requisite category … action as deemed fit, would be initiated.”  

However, according to Agarwal, the order did not have the desired impact. “Despite this order, things did not change,” he said. He noted the case of Indu Singh, an EWS patient who was denied admission at the Max hospital in Delhi’s Shalimar Bagh, until he intervened. I spoke to Indu’s husband Amar Nath Singh who had attempted to get her admitted.

“We went to Max on 13 June,” Amar told me. “They were repeatedly refusing admission saying there is no bed. She had fever and difficulty in breathing. I waited there for at least three hours. All they were saying was that there are no beds.” Referring to the hospital authorities, he added, “After talking to them, I called Ashok ji. He helped us by getting us admitted there.” After securing admission under the EWS category, Indu received free treatment.

Agarwal shared another example of non-compliance by the private sector. Since 1997, the Delhi government had empanelled private hospitals to provide treatment at subsidised rates to its employees and pensioners under the Delhi Government Employees Health Scheme, or DGEHS. “When there is a season of a larger number of patients, they simply refuse beds to empanelled patients,” Agarwal told me, referring to the private hospitals. “They prefer patients who will pay. This is a fraud of one kind. If these hospitals don’t entertain patients at the time of need, why even send them there? Why empanel them at all?”

A DGHS order dated 9 June noted that private hospitals were refusing admission to DGEHS beneficiaries who are suspected or confirmed COVID patients unless they “deposit a hefty amount prior to admission.” It further noted that the hospitals were charging them normal rates instead of the approved subsidised rates. The order reminded empanelled hospitals to provide treatment for all ailments including COVID-19 at approved rates or free of cost in the case of pensioners. Agarwal explained that the beneficiaries of the government healthcare scheme are unwilling to go to government hospitals for treatment. “They believe that they are entitled to private hospitals,” he said. “And secondly, the hopeless situation in government hospitals is another big reason. The poorest of the poor don’t want to go to these hospitals.”

Hospitals like Max made their COVID-19 treatment charges public after a Delhi government order asked all hospitals in the city to display their rate lists and bed availability at the hospital entrance. On 20 June, the DGHS issued an order fixing the rates of COVID-19 beds in all private hospitals in Delhi. The DGHS accepted the recommendations of a committee chaired by VK Paul, a NITI Aayog member. It fixed subsidised rates at Rs 8,000-10,000 for an isolation bed, Rs 13,000-15,000 for an ICU without a ventilator and Rs 15,000-18,000 for an ICU with a ventilator. The order said that these rates would apply on “all COVID beds … subject to upper limit of 60% of the beds of total hospital bed capacity.”

Subsequently, several civil society organisations criticised this move for making price caps mandatory on only 60 percent of the total hospital beds. On 23 June, 27 civil-society and public health organisations, such as the All India Drug Action Network, or AIDAN, and the Alliance of Doctors for Ethical Healthcare, wrote to Harsh Vardhan, the union health minister, Arvind Kejriwal, the Delhi chief minister, and Satyendra Jain, the Delhi health minister, highlighting their concerns. They said that the order was “riddled with flaws, contradictions and ambiguities which could be exploited by private hospitals to overcharge people, and come in the way of achieving the intent and purpose behind issuing fixed rates in the first place.”

“The decision to make the prescribed rates applicable to only a certain percentage of beds, i.e., up to 60% of total hospital bed capacity, and not for all COVID designated beds is arbitrary and incomprehensible,” the letter said. “It creates inequities in that someone who cannot afford the scheduled charges would be forced to pay a higher cost of treatment only because of unavailability of beds to which price caps apply. The order therefore creates an unconstitutional distinction between two classes of similarly situated patients and treats them unequally by arbitrarily conferring privileges to one group and liability on the other.” The letter added that this classification had not been done on the basis of a scientific rationale,  and would not help in protecting COVID-19 patients from “financial ruin.”

On 25 July, over a month after the DHGS price-capping order, civil-society groups and health organisations including AIDAN wrote another letter to Vardhan, Kejriwal and Jain, stating that private hospitals were not complying with the 20 June order. “Several complaints have come to light regarding refusal of various hospitals to adhere to the government treatment caps,” the letter said. The organisations expressed concern on the “lack of efforts by the Delhi government to enforce the order.”

 The letter went on to describe 11 kinds of violations by private hospitals. “Private hospitals are not informing patients regarding the government rates at the time of admission and/or actively misleading patients about the treatment rate caps imposed by the government in order to charge them as per hospital rates,” the letter said. It added that in many instances, the signature of a family member is being taken against the hospital’s own package rates “by deceit” without providing any information about the subsidised government rates, “in order to lock the family into paying hospital rates.” The letter further noted that hospitals were not providing information about the exact availability and occupancy of rate-capped beds. “Patients are often being admitted to the non-capped beds even when government fixed rate beds are available,” the letter said. 

The 20 signatories of the letter asked the government to take action against the non-compliant hospitals. “The government must conduct an enquiry and ensure that formal action is taken against hospitals in the form of a show cause notice, penalty etc,” they wrote. They recommended the formation of a committee to conduct monthly audits of the bills of all private hospitals providing COVID-19 treatment. They further asked for the establishment of a government procedure to address patient complaints. “The government must institute a formal grievance redressal mechanism for timely redressal of complaints against private hospitals,” the letter said.

The civil-society organisations also noted in the letter that the “quality of care deteriorated” when patients insisted on being charged as per the subsidised government rates. They pointed to “differential care to patients paying hospital rates versus the government fixed rates.” Agarwal told me that this was also the case with EWS patients. According to him, healthcare service providers and doctors are absent when an EWS patient needs them, but become readily available to patients with the capability to pay up.

Agarwal credited the ruling Aam Aadmi Party for an improvement in the occupancy of EWS beds but he pointed out that strangely, the same has not been reflected during the COVID-19 pandemic. “Earlier, the situation was that 65-70 percent EWS beds were occupied,” he said. “After the Aam Aadmi Party came to power, they deputed nodal officers, because of which the occupancy increased to 85-90 percent. But since the lockdown has started due to Corona, those beds became vacant. Even today, more than 90 percent beds, both COVID and non-COVID, which are earmarked for EWS, are vacant.”  He added, “The government is extremely sympathetic to private hospitals.”

When asked about the government’s attempts at regulation, Agarwal said, “All that is full-fledged drama. They take those actions to appear popular. Delhi government has not made any law to ensure right to public health. When a case comes up in court, they say they don’t have money. The central government said that during one of my cases. They wash their hands off saying it is a state subject.”

According to public health activists, there is significant corporate influence on healthcare policymaking in India. I spoke to Yogesh Jain, a Chhattisgarh-based paediatrician and co-founder of Jan Swasthya Sahyog, a public-health initiative. Jain said he was present at a recent video-conference meeting with Kiran Mazumdar Shaw, managing director of Biocon, a biopharmaceutical company, Naresh Trehan, the managing director of the Medanta super specialty hospital and Sangita Reddy, the joint managing director of Apollo Hospitals. “The minister with independent charge in the PMO had called a meeting of health experts about a month ago to see how they should manage post-COVID,” Jain told me in June, referring to Jitendra Singh. “Out of 11 people, there were several honchos from the private system. These are the people who will decide on the health system in the post-COVID era.” Jain continued,  “I kept on saying that this is an opportunity to get the public healthcare system back. That’s what its primacy should have been. But that did not cut much ice.”

Jain further pointed out that even the Delhi health minister Satyendra Jain, who had tested positive for COVID-19 received treatment at a private hospital. “In a state like Delhi, where they have been making noises that the public system in education and health is of world standards, and their own senior-most person in-charge of health has let the cat out of the bag,” Jain said.

In response to the inaccessibility of private healthcare to the less privileged during the pandemic, public health experts have suggested that the government take over private hospitals to regulate costs. On 26 March, Chhattisgarh issued an order to take over all private hospitals in the state for the duration of the pandemic, only to withdraw it hours later. “They made the right noises in the beginning,” Jain said. “But they have not taken over more than a couple of hospitals in the entire state.” Jain explained how the takeover model might have worked. “The attempt was that they would use the infrastructure and the people who were in a private hospital and use that as a place where they would get equipment from other public hospitals and private hospitals in one single hospital,” he said. “And the staffing and the entire care of who is to be admitted and who is to be discharged will be done by the public system.” According to him, this has only been implemented in a “piecemeal way.”

Jain said that there is little resolve on the part of the Indian state to allot a higher budget in favour of strengthening public health infrastructure. “Ideologically, the parties in power have never been sure that the public system can deliver,” he told me. He noted that the health expenditure in the budget continues to be a little over one percent of the gross domestic product.

Agarwal referred to the Draft National Health Policy of 2015 which deliberated on whether to pass a health-rights bill, making health a fundamental right, in a manner akin to the right to education. The draft had proposed that, “the Centre shall enact, after due discussion and on the request of three or more states a National Health Rights Act, which will ensure health as a
fundamental right, whose denial will be justiciable.”

“That was dropped,” Agarwal said. “It was not there in the final policy of 2017.” He continued, “The government’s agenda is to favour private entities. It is more than clear that the government wants to give in to the private lobby and to get rid of their own burden. They know if they make it a right, they will have to deal with the burden.”

In the field of health, the reasons for inequities in access to treatment and care are collectively known as the social determinants of health, or SDH. The World Health Organisation describes it as “the conditions in which people are born, grow, live, work and age and the wider set of forces and systems shaping the conditions of daily life.” A High Level Expert Group, constituted in October 2010 by the Planning Commission of India, had featured a standalone chapter on SDH in its report on Universal Health Coverage for India. In addition to reforms of the healthcare system, the report noted, “Universal Health Coverage will only be possible if there is accompanying action on social determinants like food and nutrition security, social security, water and sanitation, work and income security as well as social inclusion and equity across gender, caste and religious categories.” The report recommended reforms in the public distribution system and the Integrated Child Development Services, among other government welfare initiatives, as steps that would improve the health of the poor.

According to health activists, the idea of the public sector gaining primacy in healthcare in India is still a long shot. Commenting on doctors gravitating towards employment at private hospitals over the government counterparts, Jain said, “This has happened overtime. The best doctors in Delhi were always in the public system.” He added, “It is over the last 30 years, since globalisation has happened and the medical industrial complex has become the dominant form of providing healthcare, some more skilled people, because they could get more money in the private system and also some amount of respect, they went over there.”

However, he pins the blame on the government for allowing corporate interests to exert undue influence. “The thing that I dislike the most is the public system fawning over the private system,” Jain said. He continued, “Rather than to make the private sector be accountable to do their duty in such a health crisis, the state has made several provisions for them to increasingly make larger profits from this crisis.” He noted that private labs had been allowed to charge excessively for tests, and private hospitals for medical care. “Price capping has been done by some states, not all, and even these caps allow much profiteering still,” he said. “Even though it may have had a salutary effect on reducing it.” Jain added that allowing government functionaries to be admitted in private hospitals and paying for them has resulted in undermining the public system.

Agarwal described India’s healthcare system as a business functioning within the circle of bureaucrats, politicians, and businessmen. Referring to EWS patients who sought his help to secure admissions in Delhi hospitals, he added, “They have to run to the chief minister, to non-governmental organisations and have to put out advertisements to raise funds.”