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Health Scheme will Kill Small and Medium Hospitals: Medics’ Body

India’s largest body of doctors claimed that the Center’s proposed National Health Protection Scheme that seeks to reimburse hospitals for cashless services to patients may eliminate small and medium hospitals through unrealistic reimbursement rates. The reimbursement rates proposed under the NHPS are very low and will make it impractical to provide quality services, the Indian Medical Association (IMA) said, releasing figures from its own costing exercise that IMA officials say are closer to reality. The NHPS, to be implemented either through insurance companies or non-profit trusts, will pay up to ₹5 lakh per year for hospitalisation costs to over 10 crore poor and vulnerable households across India. Empanelled hospitals will be reimbursed for medical and surgical services. The IMA has shared its costing exercise with the Union health ministry, iterating its demand for an upward revision of reimbursement rates. “The government appears to have fixed the costs arbitrarily without any scientific costing,” IMA national president Ravi Wankhedkar said in a statement.

The NHPS rates are significantly lower than the figures that the IMA has cited. The NHPS has, for instance, proposed ₹9000 for a Caesarean section, ₹20,000 for a hysterectomy, and ₹80,000 for a knee replacement. But the IMA said its costing exercise conducted last month in Tamil Nadu has calculated the costs as ₹57,000 for a Caesarean section, ₹54,000 for a hysterectomy, and ₹144,000 for a knee replacement. “These are the costs incurred – we haven’t taken into account profits for hospitals or food charges for patients,” A.K. Ravikumar, a surgeon in Coimbatore who led the exercise, told The Telegraph. “But we have taken into account the government prescribed quality standards for hospitals and minimum wages.”

The IMA said it expects small and medium hospitals in towns and rural areas to be part of the NHPS which aims to provide economically vulnerable sections of the population – or about 40 percent of India’s population – protection from hospitalisation costs. But this well-intentioned initiative of the government may end up eliminating small and medium hospitals, the IMA said, arguing that hospitals with less than 50 beds would not be able to provide desirable quality of healthcare services at the NHPS reimbursement rates. “It will be unfair to ask hospitals to provide services below their survival cost,” said Wankhedkar. The IMA, a body of about 280,000 doctors, had cautioned last month that the proposed reimbursement rates might put patients at risk. “No hospital can work on these rates without seriously compromising patient safety,” Wankhedkar and IMA secretary Raminder Tandon had said in a joint statement. “In the garb of cutting costs, the government is exposing people to danger in the hospitals.”

Ravikumar said the IMA’s concerns were primarily focused on small and medium hospitals because some large hospitals with chains or franchises may be able to absorb the unrealistic reimbursement rates by using commercial rates in large cities to subsidise their NHPS services. However, a body of large hospitals has also expressed similar concerns. The Association of Healthcare Providers of India had earlier this year independently told the health ministry that the NHPS reimbursement rates were lower than the actual costs large tertiary-care hospitals incur. Senior health officials have said earlier they are confident that the NHPS would be able to empanel hospitals across the country but added that they were open to consultations about reimbursement rates. An alliance of doctors campaigning for ethics in healthcare has independently submitted a proposal for a rate calculator to the government that takes into account land costs, infrastructure, consumables and doctors’ fees to estimate the rates of various medical procedures. – The Telegraph India