Why are Private Hospitals worried about Price Transparency?

A recent landmark decision by the Supreme Court has jolted the Indian healthcare industry, shining a spotlight on the contentious issue of price transparency in hospitals. This ruling, aimed at rectifying long-standing grievances over price inconsistencies and soaring medical expenses, has thrust hospitals, particularly private ones, into a precarious position. The origins of this dilemma traced back to the Clinical Establishments Act of 2010, crafted to regulate clinical facilities, uphold healthcare standards, and tackle escalating medical costs. Despite being codified in law, the Act's mandate to standardize medical procedure rates languished without implementation for over a decade. The Supreme Court's intervention follows a Public Interest Litigation (PIL) filed by the Veterans Forum for Transparency in Public Life, shedding light on governmental laxity in enforcing the Act's provisions. Scrutiny revealed glaring disparities in treatment expenses between public and private hospitals, prompting the court to question the absence of specified standard rates, as mandated by law.

The implications of the Supreme Court's decree are profound, particularly for private hospitals accustomed to setting their pricing structures. The court's admonition to enforce Central Government Health Scheme (CGHS) rates, notably lower than prevailing private hospital charges, has instilled unease within the healthcare sector. Financial experts caution that mandating CGHS rates could precipitate a substantial revenue decline for hospitals, imperilling their financial sustainability. Opponents argue that uniform rates fail to accommodate differences in operational expenses, infrastructure, and expertise levels among hospitals. They contend that premier hospitals with advanced technology and esteemed medical professionals naturally incur higher costs, warranting higher service charges. Imposing standardized rates, they argue, risks compromising healthcare quality and stifling sectoral innovation.

Conversely, advocates of price transparency assert its necessity in ensuring fair healthcare access and shielding consumers from exploitation. They argue that exorbitant medical expenses have long burdened patients, exacerbating financial hardship and dissuading many from seeking timely treatment. By mandating price transparency and rate standardization, the court aims to curb arbitrary pricing practices and enhance affordability. Nonetheless, the future of India's healthcare industry remains uncertain. The Supreme Court's directive has ignited debates and lobbying endeavours from various stakeholders, including hospital conglomerates, medical practitioners, and consumer advocacy groups. While the court's intent to catalyze government action on rate standardization is evident, the practical ramifications and feasibility of such measures necessitate thorough deliberation and negotiation.

References:

1.?Indian Express - SC asks Centre to fix hospital treatment charges for entire country

2.?Money Control - The Supreme Court’s push to fix medical rates is unjustified and counterproductive

3.?Image by pch.vector on Freepik