If two government hospitals had not failed him, Gopendra Singh Parmar wouldn’t have been forced to take his child with dengue to a corporate hospital in Gurgaon where he was charged nearly Rs 16 lakh, a bill he had to mortgage his house to pay. In fact, calculations by TOI show that the treatment would have cost about Rs 5 lakh — less than a third of what Parmar paid — in a government hospital. And if the excess margins are cut out, the bill ought to have been about Rs 6.9 lakh in a private hospital.
After taking his seven-year-old son to the district hospital in Dholpur, which didn’t have platelets, and then to the district hospital in Gwalior, which was overcrowded with three children to a bed, Parmar decided to rush to Delhi. The ambulance driver insisted on taking them to a corporate hospital instead of a government one. After 22 days and mounting expenses in private care, Parmar moved his son to a government hospital, where the child died within two days.
TOI analysed the 53-page bill from the corporate hospital using data from National Pharmaceutical Pricing Authority (NPPA) on hospital procurement prices for drugs and consumables, and rates fixed for diagnostics and blood banks under Central Government Health Scheme (CGHS) and National AIDS Control Organisation (NACO). We are not naming the hospital because this problem isn’t restricted to any particular hospital but represents a wider phenomenon.
Of the total bill, Rs 10.1 lakh (64%) was for medicines, consumables, diagnostics and blood bank. This, calculations based on NPPA, CGHS and NACO data show, would have been just Rs 2.8 lakh if such huge margins had not been charged. Medicines, consumables and the rest would have cost less in a government hospital, which buys generics using bulk procurement. It would have been provided free to the patient in most government hospitals.
Medicines were billed at Rs 6.2 lakh. Even providing for a 15% margin on the procurement price, medicines should have cost only Rs 1.5 lakh. Consumables, which were charged at more than Rs 1 lakh, with a similar margin ought to have cost just Rs 29,000. Lab charges, which amounted to Rs 1.5 lakh, would have been about Rs 48,000 at CGHS rates. That’s Rs 6.4 lakh saved on just these three heads ( see graphic).
Doctors’ charges — accumulated through an average of four visits every day and charges for every procedure — were billed at Rs 1.5 lakh. These are justified by hospitals on the grounds of high salaries for doctors. However, a calculation based on discussions with industry insiders shows that even at an estimated Rs 4 lakh a month as salary for a consultant, these charges are about Rs 75,000 too high. Similarly, ICU and ventilator charges, billed at Rs 3.8 lakh, could have been about Rs 1 lakh lower allowing for a decent margin.
In short, the bill ought to have been about Rs 6.9 lakh in a private hospital not raking in huge profits.
Calculations also show that if the same treatment was provided in a government hospital, it would have cost the government Rs 5 lakh. Though the government pays nurses and other staff better salaries than the private sector, its senior doctors get only about Rs 2.5 lakh a month. Thus, the government could have provided the same treatment at a fraction of the cost and totally free to the patient.
This case study illustrates a key issue: People with dengue, caused in part by the state’s failure to control vector breeding, are further strained by government hospitals not prepared to deal with the surge in patients every year. This forces them to go to private hospitals where they are often subjected to unnecessary treatment and inflated bills. A study published in January showed that dengue was the most common reason for ICU admissions across India post-monsoon.
Hospitals say they charge higher margins to keep facilities running. Dr Giridhar Gyani of Association of Healthcare Providers of India, said, “We have told members they should not charge more than 8% to 15% margin on drugs and consumables.” Hospitals “are forced to charge high margins” as costs have risen due to the increasing staff salaries, cost of technology and marketing spends, he said.
Activists said the government should take a close look at the running costs of hospitals, something doctors claim they are not averse to. “The government ought to do a transparent and detailed costing exercise to settle this question,” said Dr Gyani.economictimes