The new GO 90 instructing government hospitals to spend only 25% of user charges and donations collected annually by the Hospital Development Societies (HDS) on essential drugs, consumables and medicines would likely to hit the hospitals hard as they were already facing a funds crunch. The administration of hospitals, including primary health centres, urban primary health care centres and health sub-centres would now be done by HDS as per the GO.

According to a government hospital superintendent, the limit on utilisation of user charges is not practical to implement as much more than this amount is already being used to buy consumables in case of emergencies. These purchases become necessary when drugs are not made available by the AP Health Medical Housing and Infrastructure Development Corporation, which deals with purchase and sale of consumables in the government sector.

The government has also decided to let the HSD spend up to Rs 5 lakh for repair, maintenance and purchase of equipment. But this amount was not sufficient for even repairs and maintaining equipment, leave alone purchases, according to hospital sources. However, the government has allowed HDS to take loans from banks for infrastructure improvement, including purchase of equipment. But to do this, HDS needs resources and a sustained income to repay the loan. Further, the government has made it clear that it will not be liable for repayment of the loan.