'Exorbitant' coronavirus treatment prices slashed as state govts step up

While treatment in the private sector and in ICU can run into lakhs of rupees, the Indian public sector offers treatment largely for free, absorbing all these costs

After scores of media reports across languages and court petitions pointing out the high prices of COVID-19 treatment in India, at least 10 state governments have stepped in to cap these rates. Maharashtra was one of the first states to do this in May 2020. The process is still under way as other states are exploring ways to cap the prices of healthcare during the pandemic.

Various aspects of the pandemic’s impact on healthcare have been explored in IndiaSpend’s ‘The Price of COVID’ series. Several issues highlighted in the series have now been somewhat regulated by state governments: Cost of RT-PCR tests has fallen by almost half, hospitalisation costs have been fixed and the supply of investigational drugs such as remdesivir are being regulated. However, several items, including personal protective equipment (PPE), N95 masks and investigational drugs like tocilizumab, continue to be unregulated.

In this report, we analyse the ways in which state governments have stepped in to bring down the costs of COVID-19 treatment in private facilities. Private hospitals, for their part, are finding the government rates untenable and want to charge more. Patient groups say that private hospitals are still flouting the new regulated prices.

India now has more than 1.8 million cases of COVID-19 and all those who might still need hospitalisation could benefit from this evolving price regulation.

Prices cut by more than half

While treatment in the private sector and in intensive care units (ICU) can run into lakhs of rupees, the Indian public sector offers treatment largely for free, absorbing all these costs.

For example, Delhi’s Saroj Super Specialty Hospital said in early June that it would charge up to Rs 1 lakh per day for a COVID-19 patient in the ICU with ventilator support. Their cheapest package, for a two- or three-bed shared room, was Rs 40,000 and their minimum bill, no matter the length of stay, was Rs 3 lakh per patient. Max Hospital in Patparganj in east Delhi had set their COVID-19 rates at Rs 72,500 a day for ICU with ventilator support and Rs 25,000 for an “economy room”, their cheapest, according to a rate card published on June 12.

A week later, the central government stepped in for Delhi. It recommended COVID-19 treatment rates between Rs 8,000 and Rs 18,000 per day including PPE costs even for ICU with ventilator support.

Max Hospital and Fortis Hospital in late July confirmed to IndiaSpend they had brought their prices in line with the regulated prices for Delhi: The cost for ICU with ventilator support was Rs 18,000 per day, ICU without ventilation Rs 15,000, and routine ward with or without oxygen Rs 10,000.

IndiaSpend studied circulars issued by 10 states, and found that most states that have regulated prices have fixed the price for treatment in ICU. Also, the rates vary from state to state. Karnataka has set the ceiling of ICU with ventilator support at Rs 25,000, which is the highest among the 10 states we analysed, while Rs 4,000 per day set by Rajasthan is the lowest.

For moderately ill patients who do not need ICU care but may need isolation, the highest price for treatment is again in Karnataka at Rs 12,000 per day. The lowest is in Chhattisgarh at Rs 2,500 per day.

These rates include only a fixed number of things and patients could still be charged extra for PPEs, daily doctor visits and other investigations, scans and procedures, our analysis of government circulars showed. Also some of these costs are what patients would pay themselves and some are what insurance companies would cover.

“Every state has framed these price caps differently,” said Chhaya Pachauli, a health activist from Rajasthan. “In Telangana, the cost of drugs is included in the government’s capped rates, but the cost of PPEs is not. In Rajasthan, it is the opposite. But whatever prices states are fixing, the actual cost to patients would still be much higher. There are lots of exclusions and the hospitals are going to make enough money anyway,” she said.

Private hospitals are unhappy and have already approached high courts opposing any government regulation of COVID-19 treatment prices. The Breach Candy Hospital in Mumbai said it may have to shut down if the Maharashtra government insisted that it reserve 80% beds to treat COVID-19 patients at the capped prices.

Capped Prices For COVID-19 Treatment
State	Severe	Very severe
	ICU without ventilator	ICU with ventilator
Maharashtra	Rs 7,500	Rs 9,000
Telangana	Rs 7,500	Rs 9,000
Delhi	Rs 13,000 to Rs 15,000	Rs 15,000 to Rs 18,000
Uttar Pradesh	Rs 13,000 to Rs 15,000	Rs 15,000 to Rs 18,000
Tamil Nadu	Rs 15,000
Andhra Pradesh	Rs 5,480 to Rs 6,280	Rs 9,580 to Rs 10,380
Karnataka	Rs 8,500 to Rs 15,000	Rs 10,000 to Rs 25,000
Kerala	Rs 6,500	Rs 11,500
Rajasthan		Rs 4,000
Chhattisgarh	Rs 3,750	Rs 6,750

Source: Circulars or letters issued by governments of Maharashtra, Telangana, NCT Delhi, Uttar Pradesh, Tamil Nadu, Andhra Pradesh, Karnataka, Kerala, Rajasthan and Chhattisgarh

‘Prices were exorbitant’

In the government circulars for capping prices which IndiaSpend studied, many admitted that the prices of hospitalisation were “exorbitant”. State governments have acknowledged that people had struggled to access and afford healthcare.

The Tamil Nadu government admitted that they were aware of complaints about private hospitals charging “exorbitant amounts of money” and that there was an “urgent need to fix rates”. The Telangana government also said there were “a number of public grievances regarding exorbitant rates” and thus decided to fix the prices. The Maharashtra government said that those not covered by health insurance “were being charged exorbitantly, causing hardship”.

At least four states (Tamil Nadu, Kerala, Karnataka and Andhra Pradesh) set up committees, some including representatives from the private healthcare sector, to finalise the capped prices. For Delhi, the central government itself set up a committee which recommended the price caps.

‘Knee-jerk reaction’

One thing that stood out during IndiaSpend’s analysis of the prices was the lack of a clear rationale behind the price regulation by the states. “The states are certainly not following any standards while fixing prices and seem to be doing this based on vague consultations,” said Pachauli.

“Rate-fixing was a knee-jerk reaction from governments over the alleged overcharging by a very small section of hospitals, mainly by ‘for profit’ and so-called ‘charitable hospitals,’” said Ravi Wankhedkar of the World Medical Association. “Yes, they did take advantage of the fear among patients and the perception that government hospitals are of bad quality. But private hospitals would not run up losses due to the new government rates. They have enough surplus and could cross-subsidise their costs.”

At least four state governments have also asked private hospitals designated to handle COVID-19 cases to reserve a percentage of their beds for COVID-19 patients. Delhi hospitals were asked to reserve 60% of their beds, in Karnataka 50%, in Tamil Nadu 25% and 20% in Goa. The hospitals can use the remaining beds for COVID or non-COVID care, and/or charge their own prices, but it varies by state.

In March, the Indian Council of Medical Research (ICMR) issued an advisory Rs 4,500 as the price of the RT-PCR test, which they call the “gold standard” for diagnosis of COVID-19. A petition in the Supreme Court challenged it. The court asked why the tests could not be free. The Indian government told the court that Rs 4,500 was a reasonable price and the court agreed.

A few weeks later, at least eight state governments went on to slash the price of the RT-PCR test by nearly half; the lowest being Rs 2,200 in Maharashtra and Rajasthan and the highest Rs 3,000 in Tamil Nadu. People in other states are still paying Rs 4,500 for the same in private labs or hospitals.

While on paper, these price caps appear to have brought some regulation and security to COVID-19 patients in distress, in practice this is working out differently. On July 25, 20 civil society organisations wrote to the Delhi government with details of how despite the price caps, private hospitals were still overcharging patients in creative ways.

The hospitals were not informing patients that rates have been regulated, the letter noted, adding that the patients were still being charged for doctor’s consultation, medicines, protective gear for health workers, etc., which are some of the “components of care that are included in the package rates fixed by the Delhi government”.

(Bhuyan is a special correspondent at IndiaSpend.)

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