Business Today

Need to heal healthcare in 2018

After capping prices of stents, concerns are that the government may now be moving towards expanding the ambit of price caps to other consumables in healthcare.

twitter-logo E Kumar Sharma   New Delhi     Last Updated: February 1, 2018  | 18:27 IST
Need to heal healthcare in 2018


The just concluded year saw hospitals coming under the spotlight. Children deaths in Gorakhpur at a government hospital raised questions over the quality of medical services in the country. Private healthcare services too were under scrutiny with a license of a leading hospital revoked and allegations of overcharging against another, both in Delhi. There is also a debate within healthcare providers over the move to cap prices of some medical devices. Two leading doctors and founders of major hospital chains - Dr Devi Shetty of Narayana Health and Dr Ajai Kumar of HealthCare Global - share their thoughts on areas in healthcare that may need focus in the new year.   


Hospital beds:
  "We are woefully short on number of beds. The World Health Organisation  says the country needs 5 beds per 1000 people but we have only 1 bed per 1050," says Dr Devi Shetty, founder, Chairman and Executive Director of Narayana Health. He and many within Indian healthcare, see the need to view this in the context of lack of adequate efforts to improve the conditions of government hospitals and to finally increase the government spending on healthcare, which has stood at little over 1 per cent of GDP.

Those associated with government healthcare, without wanting to be quoted, say it is time government hospitals are not made handlers of mainly the terminally ill patients sent from the private sector. The one yardstick to measure progress in this space, they suggest, is when politicians and bureaucrats begin to feel comfortable sending their kith and kin to government hospitals.

"The government hospitals have the numbers but that does not seem to help. The government is the largest owner of hospital beds with over 14 lakh beds as against about 7 lakh beds in the private sector. Today, 80 per cent of the secondary care and over 90 per cent of the tertiary care is provided by the private sector," says Dr Devi Shetty.

Health parameters:
Dr B S Ajai Kumar, chairman and CEO of HealthCare Global Enterprises (HCG), a leading chain of cancer care hospitals headquartered out of Bangalore, says, "Look at the infant and maternal mortality rates, some of the states in India are below the sub-Saharan region.

But, instead of focusing more on increasing spending on public health, the government is putting additional burden on the private healthcare providers, leaving them with no option for cross-subsidy so that they can provide greater access to healthcare and also invest in new research and technology."

CPS Recognition:
Dr Devi Shetty however sees signs of hope in the central government's positive measures this year was recognizing the College of Physicians and Surgeons (CPS) of Maharashtra by giving an approval to their diploma courses. This can convert some 2 lakh MBBS doctors into post graduates. His take is that the best performing state in India in terms of lowest maternal mortality is Kerala at 62 per one lakh live births, for Karnataka, it is 123.

But for Maharashtra, it is 68 and quite close to Kerala. Typically, as the size of a state gets bigger, maternal mortality numbers also go up. In a small state, that is overcrowded, everyone lives closer to a hospital. But how did Maharashtra achieve this is because they recognized the CPS 10 years ago. This means MBBS doctors getting specialist diploma degree from this college. In short, what India needs is policy changes that can lead to deregulation of medical, nursing and paramedical education.

Medical specialists:
  What Dr Devi Shetty says on medical education is crucially linked to the concerns on specialists talent. "The shortage of medical specialists in government hospitals is over 80 per cent. In 2011, a high level expert, chosen by the ministry of health, studied the requirement of medical specialists in government hospitals, and recommended that the government needs to have 1,88,000 medical specialists.

Today, there are less than 20,000 medical specialists," he says. Just to reduce maternal mortality in the country, we need 2 lakh gynecologists and equal number of anaesthetists and pediatricians and almost the same number of radiologists. In each of these specialities, we have less than 50,000 today.  

In fact, just after the developments in Ghorakhpur, Dr K Srinath Reddy, president of the Public Health Foundation of India and the former head, department of cardiology at the All India Institute of Medical Devices (AIIMS), told Business Today, "With the advent of private hospitals (read corporate hospitals) the nature of private practice of doctors has undergone a major shift. It has moved from personal clinics (earlier just at their home in the evenings) to engagement with corporate hospitals, where many of the doctors also practice."

This, he felt, had "diminished the interest  of doctors (who are also linked to private hospitals) from maintaining good services in government hospitals." On the talent issue, he reminded: "Please remember that most doctors , even in many private hospitals, are those who were trained in government hospitals or in the hospitals attached to the government medical colleges."

Therefore, if the quality of training goes down in government hospitals, it will sooner or later also get reflected in the clinical outcomes of private hospitals. "The government hospitals are the training grounds and a nursery and should be treated as precious education and training resource apart from ensuring that they be the responsible providers of medical care," adds the doctor.

National Medical Commission:  The creation of a National Medical Commission, cleared by the cabinet, is another development that Dr Devi Shetty feels needs to be watched because depending on the composition of the commission members, there could be huge implications for the sector. The commission is to replace the current  medical education regulator - the Medical Council of India.

It is to provide  for the constitution of autonomous board that would look at medical education apart from the assessment and accreditation of medical institutions and also the registration of the medical practitioners in the country..

Affordable healthcare:  Heart surgery today costs say around Rs 1.5 lakh and say theoretically you reduce this cost to Rs 40,000. Still, Dr Devi Shetty says, half the country's population cannot afford this. Therefore, the solution lies in government stepping in and improving its services and with its scale and size become the major healthcare providers of the nation.

Dr Ajai Kumar feels talk on affordable healthcare cannot ignore the current realities. Today, he says, "private healthcare providers are addressing about 75 to 80 per cent healthcare needs of the country.Most of the private healthcare providers do not give dividends and tend to plough back resources into technology and talent."

Which is one reason, why, he says, they have been able to emerge as value-based healthcare providers and gives the example of MRI scan, which costs between $ 1500 to $ 2000 in the US is made available in India for around $ 100 with the same equipment. Sustaining this, could become a challenge and that seems the new concern if business models are to be completely reworked.

Cost break up: For the sake of argument, Dr Devi Shetty says, consider a 100 bed charitable hospital and if a patient were to spend 24 hours there, what would be the electricity cost per day per bed? This is a basic secondary care hospital in Delhi, it will be about Rs 600 in Bangalore and about Rs 1,100 in Delhi. He says industries today pay around Rs 5 per unit.

Where as hospitals pay between Rs 8 to Rs 12 per unit. That is because hospitals are clubbed with entertainment industry - movie theatres and shopping malls. Therefore, in a sense, when private sector bills a patient, a significant portion - between 10 to 20 per cent goes to the government in terms of various taxes and charges.

Take the case of some costly equipment. The country today for instance, needs over a few 1000 linear accelerators for treating cancer. If you spend several crores to import this equipment, you need to pay over Rs 1 crore in import duty to the government each time you import one.

Overcharging:
"Nobody knows how much it costs to offer safe healthcare and therefore to say what is expensive and cheap is not easy", says Dr Devi Shetty. If we actually study and arrive at what is the cost of a safe hernia or heart operation, the government hospitals will emerge as the most expensive ones in the world because you are unable to control the cost of healthcare in government hospitals, he says.

The solution, in his view, is to look at the input costs for all the hospitals because patients pay that. For the government, the source of revenue should only be linked to the profits of a hospital.                

With government opting to put a cap on the prices of medical devices and now, many within the industry, that Business Today spoke to, felt there could be increasing move towards caping the prices of medical services. For instance, in Karnataka, there are already concerns among some players that there are efforts on to cap treatment prices. Some analysts also feel that given that in just 12 months from now we get into the election year, what if the government were to announce a universal health coverage scheme or some measures that add a social dimension to the operations of the private healthcare providers to service the low income segment.

After capping prices of stents, concerns are that the government may now be moving towards expanding the ambit of price caps to other consumables in healthcare such as implants and sutures. While making medical devices and consumables, where hospitals tend to have a mark-up, may be the right direction to take, analysts and those within the industry, say nothing is being done from the government side to increase public expenditure on healthcare and on dealing with poor quality issues or trying to address concerns over players not wanting to launch latest products into the market.

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