The Delhi government has recently released a proposal to cap hospital’s profit on drugs and devices.
This will lead to major concerns in provision of healthcare.
What is the decision of the Delhi government?
Many cases were charged by the patients against the private hospitals for billing exorbitant prices.
To address this, an expert committee was formed to reduce the out of pocket expenditure of patients and improve overall access to healthcare.
National Pharmaceutical Pricing Authority (NPPA) also reported that private hospitals’ profit-margins on various medicines and other consumables were between 350% - 1,740%.
Therefore, to reduce the health burden of patients, the Delhi government released this proposal to cap 50% of private hospitals profits.
What are the concerns with this proposal?
The reports and recommendations have failed to include the high capital and operational expenditure of private hospitals when calculating their profits.
Land costs of private hospitals were not considered which are comparatively higher than the government hospitals as they are present in all major cities and in easily accessible locations.
The net profit margins reported by the private medical institutions themselves are nowhere near the numbers reported by NPPA.
Therefore to maintain their current profit levels, private hospitals could end up increasing the cost on rooms and surgeries.
There is already a huge shortage of hospitals and doctors in Delhi where only 2.7 beds are available for 1000 people, the WHO recommended beds being min 5.
Therefore, capping hospitals will do more harm than good to the public and hence it has to be let go for better healthcare measures.
