Private Hospitals’ Con Job? A Better Room Means Costlier Treatment

Did you know that your room category you choose decides the cost of your medical treatment in private hospitals?

Pay more for the same treatment, including the same doctors and the same Operation Theatre, if you are opt for a better room category in a private hospital. Though not illegal, is this not a moral hazard? (Photo: iStock, Altered by Lijumol Joseph/The Quint)

Do you know that your private hospital is fleecing you based on which room you choose to hire?

It’s understandable to be charged more for a bed and bed services in a semi-private or private room, but you are probably also being charged extra for things like surgery, the operation theatre (OT), the anaesthetist’s fee, etc. You are paying at least 25% more for medical treatment that is totally unrelated to the kind of room you have hired.

32-year-old Sushil Kumar (name changed) visited one of Delhi’s biggest private hospitals, Apollo Hospital, to undergo surgery for a broken arm. Since his medical insurance had lapsed, his family members asked for the budget of the operation. They were given budgets for three different room categories, general ward, semi-private room and private room.

Total charge for the operation and a 2-night stay in the general ward was Rs 1.50 lakh, in semi-private room was Rs 1.82 lakh, and for the private room was Rs 2.21lakh. But the break-up shocked Kumar and his family.

Room charges were different, but what surprised me was that I was paying extra for the same medical treatment. When I asked the cashier, he said as per the pricing policy of the hospital, the room decides the treatment charges. When I asked him why, he couldn’t justify the policy. 

Sushil Kumar, Patient

Here is the break-up Kumar was given for surgery on his broken arm, to be operated on by the same doctor, irrespective of the room he opted for.

(Illustration: The Quint)

Kumar’s family wasn’t given any explanation for the extra charges levied for the same services. The Quint emailed Apollo Hospital and waited for their reply for 48 hours, but none came. We will update the piece if a reply is received.

What Does the Law say?

Unfortunately, the government has failed to regulate the pricing of private hospitals, in spite of being fully aware of the fact that the people are burdened with overcharging. Though, The Clinical Establishments (Registration and Regulation) Act, 2010, of Government of India does flag the issue of high costs in private hospitals. It says:

Patient safety is compromised here (private hospitals) and financing and service delivery are not transparent and accountable, making delivery of healthcare prejudiced against the poor. High cost of healthcare in private sector raises the issue of affordability and also of equity.

But the Act doesn’t regulate the private hospital’s pricing policy. As per the Act, the private hospitals are supposed to maintain transparency on their billing.

Details of charges and facilities available are supposed to be prominently displayed at a conspicuous place in each medical establishment.

According to a survey conducted by Brookings India, as much as 75% of outpatient care and around 55% of inpatient care in the country was given by private hospitals in 2014.

The question remains: Why is the government not cracking the whip on soaring costs at private hospitals? Why is the government going slow on the private hospitals’ unjustified overcharging despite being fully aware that a large section of people depend on the private healthcare sector?

Treatment Charges Don’t Vary With Room Type In Private Hospitals in USA

The United States of America’s healthcare system is dominated by private hospitals. But unlike the pricing policies of private hospitals in India, which is an utter travesty, in the US, the treatment cost does not vary with the room you pick. The Quint contacted Mount Sinai Hospital in New York to find out their pricing policy.

We charge extra only for the rooms, which could be either private or semi-private. Doctor’s fees, surgery fees or Operation Theatre fees don’t vary with the room a patient opts for. These charges remain consistent, and the room type do not determine them. 

Mount Sinai Hospital

Clearly, the private hospitals in India are going a step ahead in their profit-making business.

Not just Indian Law but international law too doesn’t talk much about the evils of overpricing in private hospitals, although the Obama administration did initiate the Affordable Care Act, 2010 to assist US citizens in overcoming the prohibitive costs of the private healthcare sector.

The US healthcare system is expensive, the most expensive in the world. That is due to many factors including the quality of our care, the general cost of things in America, the sheer amount of folks employed by healthcare system, and general fraud, waste, and abuse. The Affordable Care Act controls both consumer and industry costs. This includes cost controlling measures that affect low-income and high-income consumers, hospitals, drug makers, medical device makers, public health insurance, private health insurance, and more. 

Affordable Care Act, 2010

But recently, Obamacare was repealed by the new President of America, Donald Trump, raising worries about the sustainability of the system.

Apollo Hospital Got Land at Re 1 per Month

As per the lease agreement (dated 16 March 1994) entered into between the Government of National Capital Territory of Delhi and Indraprastha Apollo Hospital, the hospital agreed to run on ‘no profit no loss’ basis. Based on this conformity made by the hospital, the Delhi government agreed on:

[...] a total sum of Rs 38.66 crore (to construct hospital building) along with 15 acres of prime land on Delhi-Mathura road was leased out at the rate of Rupee 1 per month to Indraprastha Apollo Hospital. 

The agreement also pointed out that the hospital was to provide free medical and other facilities to at least 1/3 rd of the total number of beds in the hospital, which was to be reserved for poor patients.

In 2009, a Public Interest Litigation (PIL) was filed in the High Court by All India Lawyers Union against the Government of Delhi and Apollo Hospital seeking free medical treatment in this hospital based on the lease agreement of March 1994. The Court, in its order, said:

1) The hospital is to maintain records about free treatment and paid treatment, which shall be open to inspection at all time by the DGHS, and the Delhi government.

2) In the court’s opinion, this is a fit case for imposing exemplary cost on IMCL [Apollo Hospital] which has contested the matter and raised several frivolous objections to avoid its responsibility to give free treatment to the citizens as envisaged under the agreement.

How the Government Can Regulate Private Hospitals

According to experts in the healthcare system, private hospitals are inherently profit-making institutions. Hence, the government should encourage more public hospitals.

The government should initiate medical insurance facility to curtail the private medical insurance and private hospital nexus. Moreover, the government can easily control private hospital and their pricing policy because licences to run the organisation are issued by the former. 

Dr Bobby John, Healthcare Expert

Not just one, but all private hospitals get some concessions from the government to build up their organisations in exchange for providing reasonable and quality medical treatment to citizens. But due to the lack of government surveillance and stringent laws, the private hospital industry in India is booming.

Now, the question is: Who will bell the cat? Will the government step forward to curb the despotism of private hospitals?