Letters: Pricing problem

With reference to “A punitive overdose” (December 12), the balanced and well-researched editorial sadly stops short of discussing one of the core reasons that make expensive the “‘five star’ private hospitals which automatically exclude the lower middle class and poor people”.
 
The villain in this crucial matter is the pricing strategy followed by the manufacturers of medicines, implants and other hospital consumables — which, to say the least, is atrocious! The MRPs printed on most of these products are often between 1.5 to 10 times higher than what the hospitals have to actually pay. This huge gap — discounts between 35 and 90 per cent — allows (i) manufacturers to offer big incentives to doctors by way of commissions and foreign junkets and (ii) hospitals to exploit the patients. Even a cursory look at a hospital bill makes it clear that the room rent and even the consultants’ fees are only a fraction of the total amount — with medicines, consumables and prosthetics etc. accounting for the rest. There have been many investigative reports on the matter but no practical solution has been found other than capping prices of some medicines and stents.

 
It is a given that (i) the government alone cannot run a universal health care system in the country (ii) better qualified doctors prefer to work for the private sector and (iii) the private sector cannot purchase land at commercial market rates and afford to run a hospital. So, that leaves us with only two factors that need monitoring and strict control. First, the provision of a certain percentage of free beds to the poor, and secondly, pricing of medicines, consumables and prosthetics by the hospitals. All of them need to add decent margins, but these should not be exorbitant.

 

A dialogue with the manufacturers — at least the domestic ones — to stamp reasonable MRPs should also help. The joker in the pack would, of course, be the thousands of small and unorganised manufacturers of consumables that account for a bulk of the suppliers to even the biggest of hospitals. Krishan Kalra   Gurugram
Letters can be mailed, faxed or e-mailed to:
The Editor, Business Standard
Nehru House, 4 Bahadur Shah Zafar Marg
New Delhi 110 002
Fax: (011) 23720201  ·  E-mail: letters@bsmail.in
All letters must have a postal address and telephone number