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NITI Aayog releases study on ‘Not-for-Profit’ hospital model

The NITI Aayog on Tuesday released a comprehensive study on the not-for-profit hospital model in the country and called it a step towards closing the information gap on such institutions.

Niti Aayog Member (Health) V K Paul said investment in the expansion of the health sector in private domain has been relatively low and the recent stimulus announced by the government provides the country an opportunity to change this situation.

“There has been relatively low investment in the expansion of the health sector in the private domain. The stimulus announced yesterday provides us an opportunity to change this situation. The report on the not-for-profit sector is a small step in that direction,” said Dr Paul.

According to an official statement, the report provides insight into the operation model of not-for-profit hospitals.

As per the Niti Aayog’s report, the not-for-profit hospitals account for only 1.1% of treated ailments as of June 2018.

The report further revealed that for-profit hospitals account for 55.3% of in-patients, while not-for-profit hospitals account for only 2.7% of in-patients in the country.

“The cumulative cost of care at not-for-profit hospitals is lesser than for-profit hospitals by about one-fourth in the in-patient department. This is reckoned by the package component of cost, which is approximately 20% lower, the doctor’s or surgeon’s charges, which are approximately 36% lower and the major aspect being the bed charges, which are approximately 44% lower than the for-profit hospitals,” the report added.

The cumulative cost of OPD care in not-for-profit hospitals is about one-third lesser than in private for-profit hospitals. The NSS 75th round data revealed that the not-for-profit hospitals provide medicines to patients at about 26% lesser than the for-profit hospitals, while the doctor’s fees are approximately 18% lower in not-for-profit hospitals.

Further, the government think tank also proposed short-term and long-term policy interventions, such as 100% exemption for donations under section 80G, develop criteria to identify such hospitals, create a national level portal/directory of these hospitals, ranking them through a performance index, and promoting top hospitals for practising philanthropy, among others.

It said the Centre can consider the provision of working capital loans with lower interest rates, which would be more financially viable for the not-for-profit hospitals and would assist inadequate cash flows during times of need.

It also highlighted the need to use the expertise of these hospitals in managing human resources with limited finance in remote areas.

For complete report pls click: Not-for-profit hospital, model in India, NITI Aayog

MB Bureau