Cancellation of hospital licences will not fix India's healthcare problem

Photo: Reuters
Recent incidents of expensive healthcare and medical negligence have brought the focus back on poor healthcare facilities in the country. In one case a family was handed over a huge bill while in the other an infant was wrongly declared dead. Do these incidents point to the shortcomings of our healthcare system and policy making? Will it help to discipline private healthcare providers through punitive action like cancelling their licences? The writer takes a look at the policy challenges and how the situation can be changed. Two recent events in Delhi have highlighted the poor state of private healthcare in India. A family which lost a child to dengue was handed a bill of over 18 lakhs—-a humongous sum even by the standards of upper middle class India. And another family had to suffer the ignominy of receiving a child in a plastic bag only to discover that the infant was still alive. Much handwringing has followed on social media with the governments moving with alacrity to secure their populist bases.

For any reasoned discussion, the two cases must be separated. In the Fortis case, the parents allege that they were billed excessively with the physicians deliberately prescribing expensive drugs even when its generic versions were available. They further allege that there were treated callously despite the huge cost of treatment with the hospital threatening to dump them if they were not willing to meet their daily costs. It is noticeable that the aggrieved party has private healthcare insurance and yet, faced harassment once their policy limits ran out. Three points follow.

First, private hospitals must realize that they are belying the promises they have made to their patients. Considering the sorry state of government hospitals, patients are forced into private healthcare out of a lack of choice and not preference. Even viewing the hospital’s actions in the most sympathetic light, there is a clear lack of communication starting from the actual health status of the girl child. And much as the hospital may pretend otherwise, the lack of ethical care, and respect for any semblance of conflict of interest is routine in India with physicians typically accepting payments and favors from drug companies and other suppliers which would be absolutely proscribed in more advanced countries. If people are so ready to believe that even the most tawdry of charges against the hospital and its physician, there is a strong reason for it.

Second, for all its socialist pretensions, Indian remains one of the few major countries in the world with a largely privatized health care: over 80 percent of health care spending is out of pocket. As frequently pointed out, this is a disruptive practice which has tremendously deleterious impact on private finances especially for the poor. In a hugely influential paper published in the 1960s titled "Uncertainty and the welfare economics of medical care", Kenneth Arrow had summarized that the response to health care problems can’t only be the free market. For two reasons. First, health care is expensive and is beyond the means of most even in rich countries. Second, healthcare is exceedingly complicated and people navigating it suffer from what he called *asymmetrical information* and patients have little opportunity for comparative shopping. If faced with a life threatening illness, people rush to the nearest medical center and not the one with the highest quality or the cheapest cost.

Therefore, government has an important role in healthcare but its exact contours remain a matter of immense contestation. Should it be merely a regulator of healthcare or its financer or its provider: or an uneasy combination of all three? It is easy enough to argue that the Indian government should invest more in health care but apart from the fiscal challenges, there is a serious issue of elite capture where precious rupees are diverted towards tertiary care benefiting only the select few instead of public health which is the state’s primary responsibility. Every government is obsessed with opening more AIIMS while public health remain neglected: India still struggles with matters as routine as hospital deliveries and immunizations. The plight of the upper middle class patients draw disproportionate eyeballs but India ignores rural health which affects far more citizens than the urban elite able to access private treatment.

Third, in the interim, India needs policy and managerial innovations such as the US Emergency Medical Treatment & Labor Act (EMTALA) & iterations of catastrophic high deductible plan (CDHPs). EMTALA obliges hospitals to stabilize their patients irrespective of their ability to pay recognizing that healthcare is not just another business where the ability to access care should not only be a function of personal financial resources. The hospitals which provide uncompensated care can be reimbursed from a pool of money specifically set aside for that purpose. It reconciles both the obligation to provide healthcare in emergency cases and the recognition that it is unfair—-especially in instances of smaller facilities—-to provide care without any expectation of recompense. On similar lines, CDHPs facilitate lower premiums as long as the insured take care of routine treatment while insurance alleviates catastrophic illnesses. None of these solutions are perfect and often result in their own specific policy challenges but may take care of hospitals routinely turning away emergency patients who have no apparent ability to pay their dues.

The second case is far more grating. At the minimum, a premature baby was declared dead simply the physicians taking care of him were too callous; at its worst, he was discarded because the cost of keeping him alive would have been beyond the means of that family. Even if one accepts that the physicians made a genuine error, it is an mistake simply unforgivable. No wonder the Delhi government which never misses an opportunity for grand standing has secured its populist bases by canceling the license of the guilty hospital.

Nevertheless, the decision to rescind the license of the Max hospital is the kind of immediate judgment which make sensible policy making immensely difficult. It may satisfy the demand for instant justice but consider the cost in terms of the health care infrastructure sacrificed and the innocents penalized. Is it fair to punish an entire hospital and all its employees for the mistake of the few? And if this was the criterion adopted, how many government hospitals in India would survive? A BRD Medical college where children die routinely because of the lack of most basic of facilities would have been shuttered eons ago. It is hard to believe that this represents more than a government interested on ephemeral virtue signaling than serious reform.

In an ideal world, the aggrieved party could have gone to the courts and sued the hospital for compensatory as well as punitory damages. But as anyone even vaguely familiar with the state of Indian judicial system would argue, that is simply not an option available to the vast majority who simply can’t either afford the time or resources needed to navigate the Indian court system. Even consumer courts which were expressly set aside as an alternative are horribly clogged. Therefore, a plausible alternative would have been to impose heavy penalties on the offending hospital and to make sure its corporate owners paid the price. And the victimized patient was compensated adequately and affirmatively. A strengthening of the regulatory framework which offers patients redressal and hospitals exemplary punishment is the need of the hour

Finally, modern healthcare systems are moving away from the old paternalistic model where physicians prescribed and patients accessed. A more evolved model accepts that patients directly participate and control in their health care. The US Affordable Care Act ( Obamacare) with its mandate of patient centered care drawing on some of the best practices in Europe and Canada is a good example. It is noticeable that in both the extant cases, there is a marked refusal to communicate with patients and their family members who are treated as incidental to the entire care reprocess. In the age of internet and social media where both information and outrage is instantly available, Indian physicians appear ruefully unprepared for this new era relying on their own outdated models. And if that sorry state of affairs continues, then they should be prepared for much greater degree of scrutiny and ultimately regulations.

Health policy challenges in India are too complex for any instantaneous judgments and public retributions. Unfortunately, healthcare grabs headlines in India only by its acts of omissions. From Delhi to Gorakhpur, the government has to elucidate its proper role in health care, and the ones vested with the responsibility of securing the health status of ordinary Indians have to recognize their own responsibilities. Rohit Pradhan is a public health researcher. He writes on politics and policy. He tweets as @retributions

Disclaimer: Views expressed are personal. They do not reflect the view/s of Business Standard.

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel