India’s top cardiac surgeon said differentiated pricing of healthcare services for the rich and the poor is the only way the industry can function effectively, even as the government clamps down on high-cost stents and knee implants.
A majority of hospitals in India cross-subsidise the poor by overcharging the rich in return for “personalised”, “priority” services, Dr Devi Shetty, chairman of Bengaluru-based Narayana Hrudayalaya, told BloombergQuint.
That comes as a debate rages about how much private hospitals should charge for their services. Parents of a seven-year-old girl, who died of dengue at a Fortis Group hospital in Gurugram, were charged up to 1,700 percent markup on medical equipment and drugs.
Conceding that such isolated incidents invited restrictions on the healthcare industry, Shetty said, “We charge the rich and subsidise the poor.”
That’s the only way a country like India can offer healthcare to the masses. The government can fix any price, but then it should be paying for what it actually costs, which they are not doing.Dr Devi Shetty, Cardiologist & Chairman, Narayana Hrudayalaya
Removing the concept of cross-subsidy will result in poor people paying more and the rich paying less, he cautioned, “We just want 40 percent of the people to pay a premium price for occupying single rooms with all the luxuries.”
“In the process, most private hospitals in Karnataka offer 20 percent of services to government scheme patients, and charge only 30-40 percent of what it costs to do the operation. They write off 60 percent,” he said, explaining the business model of Narayana Hrudayalaya and other private hospitals.
He further added, “The middle ground is for the government to fix an MRP which is “fair to patients, manufacturers and hospitals.”
(The story has been published in arrangement with BloombergQuint.)
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