Large margins, even in PPE, cause private hospital bills to skyrocket

What is inflated in private hospitals is very similar to what was inflated on the bills in the days before Covid: huge margins on diagnostics, consumables, and medications. What's new are inflated charges and separate charges for biological waste disposal, as if hospitals didn't have hazardous biological waste disposal practices before Covid happened.

With many patients admitted for 10-15 days, costs add up and bills of Rs 4 lakh to Rs 16 lakh have grabbed the headlines.

In the case of consumables and medicines, the modus operandi is what the (NPPA) exposed in 2018: get at a fraction of the maximum retail price (MRP) but charge patients the MRP. As the government did nothing to address the problem, it continues.

Common investigations such as a liver or kidney function test, which costs Rs 400-800 at best in independent laboratories, are billed Rs 3,000-3,500. Similarly, procalcitonin, a test to detect bacterial infections, costs Rs 1,100-3,600 in an independent laboratory, but can cost an inpatient from R 5,500 to more than Rs 9,500. The pattern is valid for tests, large or small. With each patient needing 3-5 covid tests, hospitals are charging the maximum allowable, 4,500 rupees, although it has become apparent that the actual cost could be less than half.

In the case of medicines, a revealing example is meropenem, a high-end antibiotic. Hospitals purchase it for Rs 500-900 per gram and the MRP is charged at Rs 3,330 per gram for a patient who requires two to three grams in one day, adding thousands to the bill each day. Just like NPPA discovered in 2018, margins taken by the hospital on medications can be as high as 500% and on consumables even higher than 1,000% in some cases.

While this is business as usual, Covid has added some new elements. “In the name of isolation, patients are charged for a first-class single room or even for a luxury single room. Chest CT is being stressed. Despite being stable, many are placed in ICUs where charges are significantly higher. Rational or standard guidelines are not followed on how many times patients need to be evaluated or to have them repeat the tests when they enter, even if they already have the test result. When a patient racked up a bill of Rs 80,000 within eight hours of admission, it was a surprise even by private hospital standards, said a senior consultant at a leading Mumbai hospital.

Hospitals are also charging patients Rs 2,200 or more for each personal protective equipment kit (PPE) and other protective clothing, such as coveralls and masks. “Good quality could cost Rs 800-Rs 1,200 to a hospital. With rational use, and if the cost of the PPE is distributed among the many admitted patients, it would add up to approximately three PPE per patient, which the hospitals are charging in MRP, ”said a senior consultant at a private multi-specialty hospital.

A hospital bill that TOI analyzed had charges for care and hygiene, Covid biomedical waste disposal, and a Covid RMO (Resident Medical Officer) totaling nearly Rs 3,500 per day.

The Indian Medical Device Industry Association (AiMed) has written to the health ministry multiple times since 2018 seeking to regulate hospital margins on medical devices and consumables. Such irrational MRPs should not be allowed. The government should monitor and regulate it, as hospital acquisitions depend on who is willing to print the highest MRP while giving them the lowest price, said Rajiv Nath, coordinator of AiMed.

The NPPA also recommended rationalization of margins to avoid exploitation of patients admitted to private hospitals. This had also been recommended by a committee from the pharmaceutical department in 2016. Niti Aayog was to investigate the matter, but so far has done little.