Regulating COVID-19 Treatment Prices – The Big Picture – RSTV IAS UPSC

  • IASbaba
  • July 15, 2020
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The Big Picture- RSTV, UPSC Articles
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Regulating COVID-19 Treatment Prices


TOPIC: General Studies 2

  • COVID-19 – The Pandemic

In news: Amid reports of overcharging by private hospitals for Covid-19 treatment, the Union Health Ministry directed states to engage with the sector to ensure fair and transparent charges for services provided. 

The ministry also asked the states and union territories to facilitate enhanced bed availability and critical care health facilities. The government said that some states have already taken initiatives in this regard. They have reached an agreement with the private sector on reasonable rates and arrangements to provide critical care for in-patient admissions. A non-government body urged the Gautam Buddh Nagar administration to reduce the cost of the coronavirus test and regulate the treatment charge at private facilities. Similar requests have been made across the country.

Background: The perception and fear of being overcharged by private hospitals, especially through ‘unnecessary’ diagnostic tests and treatments, is widespread. Adverse health outcomes are frequently attributed to negligence or malpractice, and violent attacks on medical personnel by distraught relatives were common enough to warrant special legislation. In India, there is an environment of mutual distrust among the government, hospitals, and patients. The novel coronavirus has entered the scene in this backdrop.

The Emerging issue

Bills analysed by IndiaSpend reveal significant variations in how patients are being charged for the use of PPE in hospitals. Some hospitals appear to be using fewer PPE kits per patient than others, or charging less per kit than their peers, leading to lower PPE costs for patients.

In the first part of this investigation, IndiaSpend had reported that the controversially high prices charged by private hospitals in India have been further distorted by the Covid-19 pandemic, and the central government and courts have stepped in to regulate some prices, but not others. PPE is in the unregulated category.


PPE protects healthcare workers from being exposed to the SARS-CoV-2 virus and contracting Covid-19. PPE is needed and worn by not just doctors but also nurses, ward staff, cleaning staff, and many others involved in Covid-19 care. PPE includes different elements such as full-body suits as well as gloves, masks, goggles, face shields, respirators, shoe covers and head covers. A health worker will wear all of these elements, or just some, depending on what level of exposure the worker has to the SARS-CoV-2 virus. The Indian government has issued guidelines for the “rational use” of PPEs, focussing on what kind of PPE health workers should wear based on how much risk they could face.

So, what should the calculation be?

The Federation of Indian Chambers of Commerce and Industry issued a press release on June 4 offering a “rational costing solution” for Covid-19 treatment at private hospitals. Their model says that up to three or four PPE kits are needed per patient per day, depending on whether the patient is in an isolation ward or an ICU.

Now, using Federation of Indian Chambers of Commerce and Industry’s estimate of the maximum number of PPE kits needed per patient per day as a point of reference, it would mean that a patient being billed a flat rate of Rs 10,000 per day for PPE may be paying Rs 2,500 per kit used on them.

The Government’s Guidelines

The central government’s guidelines for the rational use of PPE explain that while some healthcare workers need just a mask and gloves, others, such as those in intensive care units or dealing with dead bodies, need full PPE. In the guidelines, healthcare workers, like ASHA workers, ambulance drivers, those who handle laundry from hospitals, nurses and doctors, have been put into various risk classifications like mild, low, moderate or high risk of contracting Covid-19.

The issue: But the guidelines do not say how many PPE kits should be used in order for that use to be “rational”, and what prices should be charged from patients for these kits.


There is shortage of PPE in public sector – the contradiction between the private sector, apparently flush with PPE and charging patients as much as Rs 10,000 per day for it, and the public sector, which does not charge patients for PPE, but is struggling to meet requirements, in terms of both quantity and quality.

Over the last few months, there have been many reports of protests and complaints from healthcare workers in the public sector, about shortages and shoddy PPE kits.

Solution: Since regulating private hospitals in states is the responsibility of state governments, they should use their respective clinical establishment laws to fix the prices of diagnostics and overall treatment in hospitals.

Maharashtra invokes five laws to cap high private hospital costs

  • The Maharashtra government has come out with three slabs on per-day charges for treatment of COVID-19 patients in private and charitable hospitals and also decided to regulate rates for 80 per cent of the operational bed capacity in these medical facilities.
  • Non-government health care providers in Maharashtra have been asked to accommodate maximum number of patients with 80 per cent of the operational bed capacity to be regulated by rates sanctioned by the government.
  • Healthcare providers may charge their own rates to the remaining 20 percent beds. There will be no difference in quality of treatment in 80 percent and 20 percent categories
  • For Covid-19 patients, there will be three rate slabs on per day basis – Rs 4,000, Rs 7,500 and Rs 9,000 – based on the category of wards they have been admitted in
  • The government has also fixed the cost of nearly 270 procedures and surgeries, including cancer treatments. The package rates will include doctors’ fee. Hospitals can pay more if they want to.
  • Hospitals cannot charge more than Rs 75,000 for normal deliveries and for caesareans, they can only charge Rs 86,250. The price of knee replacements has been capped at Rs 1,60,000 and an angiography cannot cost more than Rs 12,000. An angioplasty cannot be priced at more than Rs 1.2 lakh, the order states in its long list.


The objective of a new national healthcare governance framework should achieve all three. We need a fresh mindset that understands and accepts the legitimate motivations of all the stakeholders: 

  • The patient seeks reliable and affordable care, 
  • Hospital investors desire profits and the government
  • Better health and economic outcomes for society

Connecting the Dots:

  1. Despite the existence of numerous laws, regulations, judgments and administrative orders, our healthcare sector lacks any coherent governance framework. Discuss.

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