The study of the National Pharmaceutical Price Authority (NPPA) that analysed patient bills from four prominent private hospitals is the newest evidence of overcharging and exploitation and patients and health groups asserted that the unethical practices of private hospitals are a direct outcome of the regulatory vacuum, which allows them to monetise the vulnerability of patients.

Gopendra Singh Parmar, father of late Sourya Pratap who was treated for dengue at Medanta – the Medicity, Gurgaon said that more than 45 per cent of his bill of Rs.16 lakhs was for medicines and consumables on which the hospital appears to have taken huge margins. Just lab charges accounted for another 9.5 per cent of the bill. “The Government must frame rules to contain the rates charged by hospitals to make them affordable. Otherwise families will continue to be forced to sell their assets, beg and borrow in their desperation to treat loved ones, just as in my case,” he said.

Regarding existing regulation to control the prices of essential medicines through the Drug Prices Control Order (DPCO) 2013, Dr Mira Shiva, Co-convenor of the All India Drug Action Network (Aidan) pointed out several deficiencies.

“The NPPA findings that non-scheduled medicines make up around 25 per cent of the combined bill costs is hardly surprising given that almost 90 per cent of the pharmaceutical market remains outside price control. Hospitals are easily able to use this to their advantage by choosing to prescribe more expensive medicines. In its report, the NPPA has acknowledged that the market-based formula for fixing ceiling prices leaves room for huge trade margins. The central flaw of the DPCO, 2013 is the deeply flawed market-based pricing mechanism that legitimises profiteering and high prices. Aidan has consistently advocated for expansion of the scope of the DPCO to cover all essential and life saving medicines and to reinstate a method of cost-based pricing that provides reasonable profits to companies,” she said.

“The report has observed that a large share of the total costs comes from in-house diagnostic services. There is a grave problem of absence of regulation of the rates of diagnostics because of which, according to national surveys, diagnostics account for an increasing share of out-of-pocket expenditure in both in-patient and out-patient care. The problem is being compounded in large private hospitals because they prey on patients by charging higher than market rates as well as adding on convenience fees,” remarked Dr. Dinesh Abrol, National Working Group on Patent Laws.

“Moreover, the testing and diagnostics industry is fuelled through a model of cut practice, commissions and irrational, unnecessary prescription. Exploitation is aggravated and enabled by healthcare conglomerates formed by integrating pharmacy, diagnostic centre and hospital businesses. The government should strengthen free diagnostics schemes, put in place national regulated prices and a system of prescription audit for diagnostics. In parallel, it should break the emerging monopolies of the conglomerates which contribute to driving up costs of healthcare,” Dr Abrol added.

Prasanna Saligram, Janaarogya Andolana Karnataka, reiterated the consequences of absence of regulation as a result of which “healthcare providers are free to practise what is termed “supplier induced demand” and indulge in over-medicalisation since there is an inherent information asymmetry between the provider and the patient.”

Sulakshana Nandi, Joint National Convenor, Jan Swasthya Abhiyan, highlighted the blatant violation of patients rights. “In case of both private insurance and government-sponsored health insurance schemes like RSBY that are supposed to be ‘cashless’, private hospitals regularly extract illegal payments from patients in order to make profits. This expenditure is impoverishing for many families,” she said.

“Patients are commonly exploited in less obvious ways. Hospitals may have protocols that ban patients from buying medicines and consumables from outside the hospital pharmacy, refuse to display their rates or refuse to provide detailed bills,” she said.

KM Gopakumar of Aidan said, "The government should act decisively to put an end to pushing peoples' health over the edge and forcing families into economic ruin for the sake of protecting profits. Towards this end, the government should immediately take measures to impose strict price controls, especially on medicines, devices and diagnostic services related to healthcare as well as on the treatment procedures".

“The Central government has the policy space to take the lead in regulating healthcare charges and should put in place an institutional mechanism, backed by necessary legislation, to oversee the price regulation of all aspects of healthcare and all over India in a systematic manner to make them affordable,” added Malini Aisola of Aidan.

“I appreciate the NPPA conducting such a detailed and thorough analysis and identifying the systematic loot process of private hospitals. I expect the government to take cognizance of the NPPA findings and create new policy and regulations that will deter the healthcare mafia from fleecing patients and can prevent criminal collusion between pharmaceutical companies and hospitals/doctors. It is high time that the government takes severe action against those found guilty and punishes them,” said Jayant Singh, whose daughter late Adya Singh was admitted to Fortis hospital, Gurgaon and charged in excess of Rs.16 lakhs.