M J Antony: In the charity queue

OUT OF COURT

After getting land and facilities cheap, private hospitals are demanding customs and excise benefits too.

It is a fact of life that medical care, like education, has turned into crass business. The government has passed regulations to force private hospitals to provide a fraction of their resources to the poor in the country. These rules have most often been ignored, and the government appears to be helpless to enforce them. In recent years, the courts have intervened to inject some philanthropic dose into the medical corporations, but to no avail.

The new twist is that a legal battle is now being fought in the most unlikely place "" the customs house. Hospitals and importers of medical equipment have lined up before the Supreme Court in recent weeks for getting their confiscated goods cleared. The customs department impounded their goods as they were not complying with the rules which compel them to serve the poorer sections of society.

Some of the conditions for customs duty exemptions, claimed by the importers, are that they should give free treatment to 40 per cent of the outdoor patients and all indoor patients of the low-income group whose income is less than Rs 500 a month. The Director General of Health Services has a duty to verify whether the importers are following this rule. Nearly 400 of them are said to be under his watch.

One method devised by the importers to avoid this scrutiny and still claim the exemption is to change their category. The two categories which are given the duty exemption are charitable institutions and those which follow the above norms. Since the norms are not followed, one way is to change the category and wear the gear of a charitable institution. Then the strict norms for treating the low-income group are not applicable.

A few weeks ago, Jaslok Hospital and Research Centre moved the Supreme Court pleading that it should be allowed to move to the charitable category. For the past 15 years, the hospital was satisfied with the other category. However, when its customs duty exemption certificate was cancelled by the DGHS, it was stung by the charitable bug. The authorities did not permit the change, which came as an after-thought. The Bombay High Court and the Supreme Court dismissed the hospital's challenge to the decision of the authorities.

A few months ago, the Supreme Court took a different view in the judgment, Share Medical Centre vs Union of India. In that case, the court asked the authorities to reconsider the medical centre's application for a change of category. The present bench distinguished that case from the latest case involving Jaslok Hospital. Now, more such organisations are waiting for the release of their equipment from the customs godown, invoking intricate questions under the Customs Act. Obviously, it would be vastly more profitable for them in the long run to pay the lawyers instead of giving free treatment to the low-income patients.

The executive authorities have abdicated their duty to implement the rules. The municipal authorities who have given land and infrastructure almost free to these hospitals have been equally remiss. The orders of the courts in the past have also been ignored by everyone concerned. Some ten years ago, the Supreme Court, in the Mediwell & Health Care case, had directed that those who derived benefit from the customs exemption should publish in the newspapers every month the number of patients treated free of charge and their details. If the hospitals defaulted in this, there should be "coercive official action" against them. Even police action was recommended. However, none of these has happened in the past decade.The orders of the Supreme Court have also been ambivalent.

In the Mediwell case, the court allowed duty exemption because some other importers had been given the benefit. So, it said it would be discriminatory to deny the exemption in this case. In the Share Medical Centre case, the authorities were asked to consider its application for change of category. In an earlier case, Unichem Laboratories (2002), the court almost chided the authorities for not allowing change in categorisation. Only in the latest case of Jaslok hospital, the court took a strong stand. Whether it would sustain it would be seen only when it takes up the array of cases before it.

Some high courts like that of Delhi have criticised the misplaced benevolence of the municipal authorities in providing land and facilities at cheap rates to the hospitals without enforcing their corresponding obligations. The Delhi high court last year ordered such beneficiaries to provide free treatment to the poor "" 10 per cent indoor and 25 per cent outdoor patients. But these orders, either of the Supreme Court or the high courts, have made hardly any impact. The public are not even aware of them. In a perverse way, health is wealth for the medical corporates.