Private Hospitals Spend 50 Percent of Operational Costs on Salaries of Medical Staff

A first-of-its-kind analysis of real cost of delivering healthcare in India has found that about 50  percent of the total operational expenditure in private hospitals is spent on the salaries of medical staff including doctors. The analysis, carried out by the Association of Healthcare Providers of India-a body of private hospitals-also says that hospitals spend 28-32 percent on drugs and consumables and maintaining a bed in a super-specialty hospital takes about ₹15,000-25,000 every day. In comparison, says the analysis based on annual reports of hospitals in Delhi and Mumbai, in tertiary care government hospitals, ₹9000-17,000 is spent to maintain a bed every day. The study had been submitted to Arvind Kejriwal led government in Delhi. “We carried out this analysis because there was no report available on how hospitals are running, spending how much on which head and what is the cost of delivering healthcare services to patients,” said Girdhar J Gyani, director-general of AHPI. “It’s important for both government and public to understand that it takes huge amount of expenditure to run super-specialty and secondary care hospitals and things need to be viewed accordingly instead of having unrealistic expectations,” Gyani said.

“One of the main points that has emerged is that even in government hospitals, cost of treatment does not come cheap but as its heavily subsidized, people tend to think that private hospitals are indulged in massive profiteering.” The report stresses that private hospitals pay a lot of emphasis on super-specialist doctors. “Their fee is much higher. Private hospitals also have higher staff to patient ratios. These hospitals cater to varying demands from different categories of patients, without too much of waiting time.” The report has suggested that governments should plan compensation based on risk-based categorization of hospitals or compensation should be linked with clinical outcomes so as to promote culture of safety within the health systems of the country. The association, based on the report has also recommended that public hospitals, even while delivering free health services, must account for actual cost and make it known to patient.

“This is necessary so that populations realize the value of government’s contribution. This will also help populations to understand the rationale behind the cost of services charged by the private hospitals,” reads the report. Those fighting for patients’ rights, however said that the report showed only one part of a picture. “A report prepared by the National Pharmaceutical Pricing Authority sometime back had clearly indicted four Corporate hospitals in the NCR of overcharging against whom complaints were made,” said Jayant Singh of Campaign for Dignified and Affordable Healthcare. “So, the AHPI report should also tell people how much profit big hospitals make despite of all the expenditure.” – New Indian Express

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