A Bitter Pill for India’s Healthcare

The principal agenda - among many, for any country, whether developing, developed, or under-
developed, is to ensure a populace that is healthy, and that lives long and productive lives. Most
successful nations in the matter of delivering healthcare are those that have put in place
mechanisms that have struck a balance between state responsibility and private sector
involvement, usually tilting toward the former1.

Medical service can be defined as a health care service intended to influence a person's health,
directly or indirectly, through procedures executed by medically educated personnel. It is
however difficult to distinguish clearly between diverse activities within medical services (Oravo
& Tuominen, 2002).

The Indian Healthcare System

The Constitution of India has laid a special emphasis on health, given its federal nature. The
powers have been divided between Union government and State governments. Articles 39, 41,
and 47 of the Directive Principles of State Policy stipulate the basic responsibility of the state
towards promotion of health and living standards of its people2. The ministries in the states were
made totally responsible for health policy and administration with the introduction of provincial
autonomy under the Government of India Act, 1935(Shankar Rao, 1992:20). All health activities
of the nation were classified in three lists - Federal, Concurrent and Provincial. According to this
division, the responsibilities of Central Government include:
a) International health and post quarantine,
b) Inter-state quarantine,
c) Medical research,
d) Higher medical education,
e) Administration of central agencies, and
f) Medical and health administration of the areas directly administered by the Centre.

The States were given responsibility for all health and medical activities (GOI Act, 1935). In
India, health (or healthcare delivery more appropriately) therefore emerges clearly as a state
subject.

Figure 1 illustrates a contrast of India’s healthcare spending (both public and private) with some
of the leading countries from both developing and developed block of nations. It is astounding
to note that India’s performance is not enviable as the country’s total healthcare expenditure as a
percentage of its GDP is among the lowest among the countries it is often compared to. It is
therefore shocking that a nation of 1.3 billion, with up to 90% working in the unregulated

1
Dipankar De Sarkar, 'No debate on healthcare in India', 13/01/2017,
http://www.livemint.com/Opinion/Lk9Nkx8vZllFVH0BytH5AL/No-debate-on-healthcare-in-India.html, accessed on
10/03/2017
2
B P C Bose, 'Hospital Administration - A Comparative Study of the Government and Corporate Hospitals in
Hyderabad, Andhra Pradesh' (Acharya Nagarjuna University, 2013), http://hdl.handle.net/10603/30995 (accessed
on 14/03/2017)
informal sector of the economy, has not occupied itself in debating how much the government
plans to spend on what, and how it plans to raise the money it needs to execute specifically those
projects that it wants implemented with greater efficiency.

As per the latest data available from the World Health Organization (WHO), India’s total
expenditure on health was 4.7 % of its GDP3 (in 2014). As we can see from Figure 1, as opposed
to the practices in the other countries share of private healthcare expenses as a percentage of total
healthcare expenditure was the highest at 71% in 2013.
F IGURE 1

Healthcare Expenditure in India vis-a-vis Global

90%
80%
70% Brazil
60% China
50% India
40% Russia
30% Sri Lanka
20% UK
10% USA
0% Global
Total Healthcare Public Healthcare Private Healthcare
Expenditure as % of GDP Expenditure as % of Total Expenditure as % of Total
Healthcare Expenditure Healthcare Expenditure

SOURCE: WHO, 2013

The principal source of public financing is general tax (both direct and indirect taxes) and non-
tax revenues (e.g. service charges, fees, grants, rent, etc.) made up of central funding from the
Ministry of Finance as well as revenues raised by the state governments. However, out of pocket
expenditure by individual households constitutes 60–80% of total health expenditure across the
states4.

The healthcare market, by industry convention, is broadly segmented into five segments. These
include –
1. Healthcare delivery/Hospitals (comprising of hospitals and diagnostic centres)
2. Pharmaceutical
3. Diagnostics
4. Medical equipment and supplies

3
Global Health Observatory, http://www.who.int/countries/ind/en/, accessed on 10/03/2017
4
Antonio Duran, Kamal Gulati, Arunachalam Gunasekar, Shakti Kumar Gupta, Parmeshwar
Kumar, Chandrakant Lahariya, Angel Rajan Singh., 'A case study on the All India Institute of Medical Sciences, New
Delhi'
 5. Telemedicine
6. Medical insurance

This article largely focuses on the healthcare delivery market (comprising of hospitals and
diagnostic centres) in the country. A significant component of the healthcare delivery market is
the health worker. Health workers include both main and marginal workers. Back in 2001, of all
health workers, 8,19,475 were doctors (adding together allopathic, ayurvedic, homeopathic and
unani), 630,406 were nurses and midwives, 24,403 were dental practitioners, 231,438 were
pharmacists, 12,640 were traditional and faith healers, and 351,178 were health workers in other
categories which includes laboratory technicians, opticians, dieticians and others5.

A study by WHO, titled ‘The Health Workforce in India’, published in June 2016 6, has revealed
that the density of all doctors (8,19,475) — combined for Allopathic, Ayurvedic, Homoeopathic
and Unani — in India in 2001 was around 80 doctors per lakh population (as against 130 in
China), which translated into around 0.8 doctor per 1000 persons in the country. The report
further stated that, ignoring those who did not have a bonafide medical qualification, the number
actually dropped to just 36 doctors per lakh population in India – which is around 0.3 doctors
per 1000 persons! Furthermore, when it came to dentists, the situation was even more
unenviable. The density of dentists in India was abysmally low at just 2.4 per lakh population in
2001, with 58 districts having no dentists at all – that would work out to just 0.0024 dentists per
1000 persons. As per latest available data from the WHO7, as of 2014, India had 0.725 doctors
per 1000 persons in the country, which was a drop from the density of physician data (0.8
doctors per 1000 persons) in 2001. Pakistan, which was curved out as a separate country from
within British India in 1947, has fared better than India in terms physician density, with 0.806
doctors per 1000 persons in 2014.

It is further noted that many individuals claiming to be physicians in India do not have the
requisite professional qualifications. Nearly 31.4% of those who called themselves allopathic
doctors in 2001 were educated up to only secondary school level, and as many as 57.3% did not
have a medical qualification8. Further, lack of medical qualification is unduly concentrated in
rural areas. This gets established from the fact that while 58.4% of allopathic doctors in urban
areas had a medical qualification, only 18.8% of those in rural areas had such a qualification.

Another key component of the Indian healthcare delivery market is the healthcare delivery
facility. As on 31.3.2016 the status of public health facilities functioning in the Country was as
under9:
 There were 1, 55,069 sub centres (SCs),
 There were 25,354 primary health centres (PHCs) out of which only 9291 PHCs were
operational as 24X7 facilities

5
Sudhir Anand and Victoria Fan, 'The health workforce in India', (World Health Organization 2016)
6
Samarth Bansal, 'WHO report sounds alarm on ‘doctors’ in India', 18/07/2016,
http://www.thehindu.com/data/WHO-report-sounds-alarm-on-%E2%80%98doctors%E2%80%99-in-
India/article14495884.ece, accessed on 10/03/2017
7
http://www.who.int/gho/health_workforce/physicians_density/en/, 10/03/2017
8
Sudhir Anand and Victoria Fan, 'The health workforce in India', (World Health Organization 2016)
9
As per the Rural Health Statistics (RHS) 2016
  There were 5,510 community health centres (CHCs),
 There were 1065 sub-divisional hospitals (SDHs) and 773 districts hospitals (DH)
 There was a shortfall of 35,110 SCs (20%), 6,572 PHCs (22%) and 2,220 CHCs (30%)
across the country.

Tertiary Care in India and the Private Sector

Indian healthcare system is also unique in a sense that, for an enormously diverse population set,
there is healthcare offering at almost every level, right from the expensive tertiary branded
hospitals, to alternate medicines for the masses, such as Ayurveda, Siddha, Yunani and the likes.
The public health care system in the country is a three-tier structure comprising of primary,
secondary and tertiary facilities.

Over the years, the private health sector has emerged as a major service provider (nearly 80% of
total outpatient and 60% of total inpatient care). Tertiary hospitals in major cities are, in many
cases, run by business establishments which use corporate and business strategies to create
demand and attract those with real demand for healthcare or the critically vulnerable at
snowballing costs. Standards in some of them are justly world class, but given the
commodification of healthcare it has not been possible to standardize the quality, accountability
and fairness in care through norms for accreditation, transparency in fees, medical audit,
responsible record keeping, credible grievance redressal and more10. Furthermore, a review of
the existing tertiary health care mechanism in the private sector reveals that11:
 Physicians are increasingly emerging as operational managers in private hospitals.
 As private health care organizations restructure for cost efficiency, physicians are being
increasingly required to take on more responsibilities to meet the priorities of the
organization, and not necessarily the priorities of the patient.
 Physician’s role is increasingly being viewed as facilitator and guarantor of the provision
of quality of care and is thus pivotal in the meeting of organizational goals and
objectives. Needless to mention here, that organizational goals and objectives need not
always be in the best interest of the patient or the customer.
 Physicians now have colossal responsibility to ensure quality, safety, innovation,
efficiency and financial performance at the unit level besides ensuring that staff is
prepared and capable of delivering the complex patient care that is required. Such
relentless demand involved in executing this wide-ranging scope of responsibility often
takes its toll on the physicians.

Ethics of Healthcare and Consumer Protection

The Government of India has set up several regulatory bodies for monitoring the standard of
professional education and for maintaining a code of ethics in the country. Foremost among
these bodies is the Medical Council of India (MCI). The Medical Council of India requires that

10
http://hdl.handle.net/10603/97196
11
A.Lingaiah, 'Physicians and Strategic Decision Making Processes in Hospitals', (Birla Institute of Technology and
Science Pilani, 2015
every new graduate should be given a copy of the code at the time of registration, and should
agree to abide by it. The code12 declares,
“I pledge to consecrate my life to the service of humanity. I will not use my medical knowledge
contrary to the laws of humanity. I will maintain the utmost respect for human life from the
time of conception.”

This twelve page document, the code, covers:

 The character and responsibility of the physician;
 Advertising by the physician;
 Professional services rendered;
 Duties of the physicians to their patients and the profession at large, to each other and to
the public.
In all medical colleges, the students on graduation are required to take a pledge to the
Hippocratic oath. The MCI is empowered to take disciplinary action in case the code of ethics so
prescribed is not adhered to by physicians. The retribution awarded depends upon the level of
misconduct. It may be as punitive as removal, altogether or for a stated period, from the register
the name of the registered practitioner who has been convicted.

Increasingly, there are being brought to notice cases of allegations on malpractices by the private
players in healthcare delivery market. These include –
 Several hospitals asking for PAN cards and fixed deposit (FD) document of patients.
 Some hospitals are overcharging patients, leading to exaggerated bills.
 Certain practices, such as fee-splitting, over-prescription of medicines and drugs,
inadequate sterilization procedures, and employing untrained personnel, have increased

Concerns over such allegations further deepen when CEOs and leaders at these institutions of
tertiary care declare publicly their objectives, through statements13 such as –
 Their job is not just to manage a hospital but to run a company.
 Raise the bar higher for the business and make the business bigger.
 It is not enough to be a best-managed hospital in the whole world, but also have
financials that be the best in the world.

It therefore becomes important to understand how the legal system in the country and under what
circumstances, would regard a medical practitioner as rendering ‘service' under section 2( 1)( 0)
of the Consumer Protection Act,1986 and whether the services rendered at a hospital/nursing
home could also be regarded as 'service. It is pertinent in this context to refer to the Indian
Medical Association v V.P. Shanta and Others case14. In the given case, the Honourable Supreme
Court of India had laid down the following criteria:
i. Service rendered to a patient by. a medical practitioner (except where the doctor rendered
service free of charge to every patient or under a contract of personal service), by way of

12
http://www.who.int/ethics/regions/en/searo_ethics.pdf?ua=1
13
Samhita Chakraborty, 'A president by profession, a designer by passion and a fashionista at heart - Rupali Basu is
all that and more', 21/12/2014, https://www.telegraphindia.com/1141221/jsp/t2/story_4457.jsp#.WMJwJ2997IV,
accessed on 10/03/2017
14
[(1999) 5 SCC 651] Date of Decision~13/11/1995
 consultation, diagnosis and treatment, both medical and surgical, would fall within the
ambit of 'service' as defined in section 2(1)(0).
ii. The apex court observed that merely because medical practitioners belong to medical
profession and are subject to the disciplinary control of the Medical Council of India and
/ or state Medical Councils would not exclude the services rendered by them from the
ambit of the Act.
iii. A 'contract of personal service' was to be distinguished from a 'contact for personal
services' (as only contract of personal service are expressly excluded from definition of
service in section 2(1)(0). In the absence of relationship of master and servant between
the patient and the medical practitioner; the service rendered by a medical practitioner to
the patient would be under a 'contract for personal services and thus, is not outside
section 2(1)(0).
iv. The expression 'contract of personal service' in section 2.(1)(0) of the Act could not be
confined to contract for employment of domestic servants only and the expression would
include the employment of a medical officer for the purpose of rendering medical service
to the employer. However, such service would be would be outside the purview of
section 2(1)( 0).
v. Service rendered free of charge by a medical practitioner attached to a hospital/nursing
home or a medical officer employed in a hospital/nursing home where such service were
rendered free of charge to everybody would not be 'service' as defined in section 2(1)(0).
The payment of a token amount only for registration purpose at the hospital/nursing
home would not alter the position.
vi. Similarly, service rendered at a non-Government hospital/nursing home where no charge
whatsoever was made from any person availing of the service and all patients (rich and
poor) were given free service was outside the purview of tile expression 'service.' The
payment of a token amount only for registration purpose only at such a hospital/nursing
home would not alter the position.
vii. Service rendered at a non-Government hospital/nursing home where charges were
required to be paid by all persons availing of such services fell within the purview of the
expression 'service' as defined in section2(1)(o).
viii. Service rendered at a non-Government hospital/nursing home where charges were
required to be paid by persons who were in a position to pay and persons who could not
afford to pay were rendered service free of charge would fall within 'service' as defined in
section 2(1)(0). Free service rendered to those who could not pay would also be 'service'
and the recipient a 'consumer' under the Act.
ix. Service rendered at a government hospital/health centre/dispensary where no charge
whatsoever was made from any person availing of the services and all patients (rich and
poor) were given free service was outside the purview of the expression 'service' as
defined in section 2(1)(0) of the Act The payment of a token amount for registration
purpose only at the hospital/nursing home would not alter the position.
x. Service rendered at a Government hospital/health centre/dispensary where services were
rendered to some persons on payment of charges and also rendered free of charge to other
persons would fall within 'service' as defined in section 2(1)(0). Free Service to those
who could not pay would also be 'service' and the recipient a 'consumer' under the Act.
Though Governmental hospitals may not be commercial in the sense of private doctors
and hospitals, still Government hospitals could not be treated differently and in such a
 case the persons belonging to 'poor class' received free services would be the
beneficiaries of the services hired/ availed of by the 'paying class.'
xi. Service rendered by a medical practitioner or hospital/nursing home could not be
regarded a service rendered free of charge if the person availing of the service had taken
an insurance policy for medical care where under the charge for consultation, diagnosis
and medical treatment were borne by the insurance company. It would fall within
'services" as defined in section 2(1)(0).
xii. Similarly, where, a part of the condition of services', the employer bore the expenses of
medical treatment of an employee and his family members dependent on him the service
rendered to such an employee and his family members by a medical practitioner or a
hospital/nursing home would constitute 'service' under the Act.

In another two cases, ‘Mis. Cosmopolitan Hospitals and another (appellants) vs. Vasantha P Nair
(respondents)’ and ‘Vinitha Ashok (complainant) vs. Lakshmi Hospital and Others (opposite
parties)’, filed with the State Commission, the defendants (private doctors) had claimed that
these cases could not be tried under the COPRA. They had argued that the services rendered to
the patients were in the nature of personal services not commercial transactions and, hence, did
not fall under the purview of the Act. They had also argued that the aggrieved party cannot be
considered 'consumers' of the services and, therefore, cannot file a complaint of medical
negligence. The State Commission rejected the claim of the defendants and they appealed to the
National Commission. The National Commission had ruled that the judgement of the State
Commission was appropriate, and assigned the reason15:
'According to the act, service is defined broadly and applies to every situation where there is a
'contract for service' in which the renderer of service is independent of any supervision or control
of the person who demands service. In the case of medical service, the patient is not in a
position to exercise any control over the work of the doctor. This is a case of a principal-agent
relationship, where the principal (i.e. the patient) authorizes the doctor (i.e. the agent) to act on
his behalf so that in essence, the principal is hiring professional help for something of which he
has no knowledge. Personal service, on the other hand, involves the 'contract of services' which
implies a master-servant relationship whereby the master directs the servant to perform
services of a certain kind in a certain manner (i.e. master supervises the Tenderer of services).
Therefore, professional services and technical services, such as those of surgeons, lawyers,
accountants, engineering contractors, etc., are covered under consumer protection act.'

However, given the current state of affairs with tertiary healthcare in the country, one would get
a sense that the State exists primarily for disciplining labour and the common citizens, and not
disciplining capital that funds the development of tertiary healthcare facilities. Sadly, very few
(state) governments have been of the view that healthcare service need not be seen only as a

15
https://oup.silverchair-
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265.pdf?Expires=1489776233&Signature=gp-
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commercial proposition; that it needs to be recognized that it is a service which should be
delivered with humility and human touch.

Consumers at large, especially consumer of healthcare delivery services, have often been found
to be uninformed about the product and services they buy simply because many products are so
complex that only an expert can be knowledgeable about the product or the service. Besides, the
service provider may not often voluntarily share this knowledge with the consumers. In addition,
it may be too expensive, cumbersome and impractical for consumers to conduct the research
needed to learn enough about a particular product or a service to make an informed purchase
decision. Critics have also pointed out that consumer markets are not competitive in the real
sense, but are instead either monopolies or oligopolies, in which sellers can manipulate price and
supply. Healthcare delivery services market certainly appears to be an oligopoly as on date in the
country. It can thus be reasoned that market forces in the healthcare delivery services market
cannot be rationally expected to deal with all consumer concerns for safety, and freedom from
risk.

According to the ‘due care’ theory manufacturers’ or a sellers’ duties to consumers is based on
the notion that consumers and sellers do not meet as equals and that the consumers’ interests are
particularly vulnerable to being harmed by the manufacturer who has knowledge and expertise
that the buyer or the consumer lacks. Because of the advantage, manufacturers have a duty to
take special care to ensure that consumers’ interests are not harmed by the products that they
offered them. The ‘due care’ theory holds that the manufacturer or the seller violates this duty
and is negligent when there is a failure to exercise the due care. However the manufacturer or the
seller may explicitly disclaim such responsibility and buyers may agree to such disclaimer.
Consumers of healthcare delivery services must therefore be protected through a combination of
legal structures of government and through voluntary initiatives of responsible businessmen and
investors.

A third theory on the duties of the manufacturer and seller would extend the manufacturer’s or
sellers’ duties beyond those imposed by contractual relationships and beyond those imposed by
the duty to exercise due care in preventing harm to the consumer or the buyer. This third theory –
‘social costs view of the manufacturer’s duties to consumers’ – holds that the manufacturer or
the seller should pay the costs of any harm in the product or service, even if the manufacturer or
seller or the service provider exercised all due care in designing, making and marketing the
product or the service, and had also taken all reasonable precautions to warm buyers or users or
consumers of every foreseen danger16. It is argued that this theory, founded on utilitarian point of
view, ultimately leads to more efficient use of society’s resources.

Need for a Bitter Pill

So far there are few instances of state governments in India having put in place some kind of
regulatory mechanism for verifying and prescribing the charges for treatment in private hospitals
and also to examine complaints of medical negligence and over-billing. Seen from a ‘contract
view’ of an enterprises’ duties to its customers, putting in place a regulatory mechanism in the

16
Manuel G. Velasquez, Business Ethics-Concepts and Cases (Pearson Education Inc, 2012)
context of healthcare delivery services gains significant importance, given that moral duties of
the enterprise to its customers is to –
 Comply with express and implied claims of reliability, service life, maintainability and
safety.
 Disclosure, in the sense that the seller has the duty to inform the buyer of any
characteristics of the product or the service that could affect the buyer’s decision to
purchase the product or the service.
 Not to misrepresent a product or a service deliberately intended to deceive the buyer into
thinking something about the product or the service, which the seller knows is false.
 Not to coerce a customer, by taking advantage of a buyer’s fear or emotional stress to
extract consent to an agreement that the buyer would not make if the buyer were thinking
rationally. The seller has a duty to refrain from exploiting emotional states that my induce
buyers to act irrationally against their best interests, Sellers also have the duty not to take
advantage of gullibility, immaturity, ignorance or any other factors that reduces or
eliminates the buyer’s ability to make free rational choices.

In the given context, it is perhaps pertinent to remind ourselves of the regulatory mechanism
being put in place by the Government of India in another hitherto unregulated industry in the
country – the real estate industry. The Real Estate Regulation & Development Act 2016 17
(RERA), which shall be implemented in the country by May 2017, lays down the broad
parameters for functioning of the real estate sector. Land, like health, being a State subject,
RERA requires States and Union Territories to come up with governing rules. RERA, once
implemented, is expected to increase transparency, which in turn is likely win buyer confidence.
The benefits of the Act would be that the real estate buyer shall be ensured of a dedicated
governing body, timely project completion, complete information on the project and amenities
pledged. Real estate developers as well as intermediaries shall now have to recalibrate the way
they do business in order to be RERA compliant. Hence, it is only in keeping to argue in favour
of a similar regulatory mechanism to be put in place towards ensuring effective consumer
protection and disciplining the healthcare delivery services industry in India.

Thankfully, things seem to be changing, for the better for the healthcare delivery services market
in India. The West Bengal Clinical Establishments (Registration, Regulation and Transparency)
Bill, 2017 seems like a step in the desired direction.

West Bengal Clinical Establishments (Registration, Regulation and

Transparency) Bill, 2017- A Bitter Pill?

Very recently that the Government of West Bengal has attempted to bring in reforms in the
state’s healthcare system by passing a new bill - the West Bengal Clinical Establishments
(Registration, Regulation and Transparency) Bill, 2017. The bill aims to regulate the private

17
India Real Estate July - December 2016 (Knight Frank India Pvt. Ltd)
hospitals in the State and bring in transparency in the manner in which they operate. Highlights
of this bill include18:

Clinical establishments in the State should now be required to:

 Treat accident, acid attack and rape victims even if they cannot pay for treatment
immediately. The hospital would have the right to recover the cost of treatment "in due
course".
 Release the body of a patient even if the bill for treatment has not been paid.
 Maintain grievance cells for patients and their kin to accept complaints about treatment,
billing and staff behaviour.
 Set up a help desk each to ensure proper communication with patients.
 Implement the e-prescription system, maintain medical records electronically and provide
a copy each of all medical records and treatment details at the time of a patient's
discharge.
 Follow fixed rates and charges, including the package rates for investigation, bed
charges, operating theatre procedures, intensive care, ventilation, implants, consultation
and similar tests and procedures. Any additional treatment or procedure shall not attract
additional charges over and above the fixed rates and charges, including the package
rates.
 Provide proper estimate of cost of treatment not covered in fixed rates and charges,
including the package rates. The final bill cannot exceed the estimate by more than a
percentage fixed by the government.
 Attempt to set up fair-price medicine shops and diagnostic centres if it has more than 100
beds.
 Provide completely free treatment to 20 percent of the patients in the outpatient
departments and 10 percent of admitted patients if the hospital has taken land or other aid
from the government.

If the private hospitals violate these norms, then there shall be provision of -
 Penalty up to Rs. 50,000 being slapped if the violation results in minor deficiencies that
do not pose imminent danger to people's health and safety and can be rectified within a
reasonable time.
 Penalty up to Rs. 10 lakh if the violation results in major deficiencies.
 Penalty of Rs. 50,000 for any other violation the first time and Rs. 1 lakh for subsequent
cases.

If lapse or negligence on the part of the hospital or health care delivery facility results in injury
or death, in such cases the hospital shall pay the victim or his legal representative -
 Up to Rs. 3 lakh for simple injury,
 Up to Rs. 5 lakh for grievous injury and
 At least Rs. 10 lakh for death.

18
The Telegraph, 'Consequences of hospital bill', 03/03/2017,
https://www.telegraphindia.com/1170303/jsp/calcutta/story_138694.jsp#.WMJwym997IV, accessed on
10/03/2017
Furthermore, the compensation for an injury has to be paid within six months of the incident. In
the event of death, interim relief must be paid to the next of kin within 30 days. Rationale for
stiff penalty for injury or death due to negligence being that such penalties are likely to drive
hospitals to treat patients more attentively.

The said bill has also proposed setting up of a Clinical Establishment Regulatory Commission, a
supervisory body with enough grit to ensure that –
 Hospitals follow norms,
 Treatment will not be delayed or denied in an emergency because of money,
 Clearer communication between hospitals and patients,
 Forum for redress of complaints in every clinical establishment,
 More accurate estimates of treatment cost and more transparent billing.

Radical Innovations in Healthcare Delivery Model is the Need of

the Hour
While India, since achieving independence, has been endeavoring to achieve quality and
universal healthcare, efforts towards the same has been met with limited success. Need of the
hour for the country, thus, is an all-encompassing healthcare model that should be able to attain
the goal of improving access to quality and universal healthcare.

Doran Teague 19 (1971) had indicated that any new model for the delivery of social services
within a health care system threatens the status of hospital social workers who hold positions of
power and influence acquired over many years of bureaucratic struggle. This perhaps provides an
explanation as to why the country has met with limited success in achieving quality and
universal healthcare for its citizens. Perhaps justifying this logic has been the recent insistence of
majority investors and promoters of two private hospitals in Kolkata20, in the aftermath of the
State Government’s declaration of the West Bengal Clinical Establishments (Registration,
Regulation and Transparency) Bill 2017, that if the Bengal government takes an ‘antagonistic’
stand towards private health care, they would either pull out of the state or put on hold all
expansion plans in the state. Even the Indian Medical Association (the pan India body of
physicians) has expressed similar concerns with regards to the Bill. The said Bill aims at setting
up a commission that will decide the charges for treatment in private hospitals and look into
complaints of medical negligence and over-billing. It can be therefore inferred that any step
taken by the State to regulate private healthcare delivery services is likely to be perceived as
government's hostility thereby incentivizing some private healthcare delivery facilities to exit the
state of Bengal.

Teague had further contended, which perhaps appears very right in the light of emerging
developments that the present healthcare delivery system is dated and that radical reform is the
need of the hour. This is perhaps only in keeping with the shareholder’s wealth maximization
philosophy which is the prime driver for all commercial enterprises – including private

19
Doran Teague, 'Social Service Enterprises: A New Health Care Model', Social Work Vol. 16, No. 3 (July 1971), pp.
66-74 (Oxford University Press, 1971); https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1285083/; (accessed 9
March 2017)
20
https://www.telegraphindia.com/1170307/jsp/frontpage/story_139423.jsp#.WL5SiW-GPIU
enterprises that deliver healthcare delivery services. A keen student or follower of the capitalist
model of doing business would know that portfolio management is the art and science of making
decisions about investment mix and policy, matching investments to objectives, asset allocation
for individuals and institutions, and balancing risk against performance. According to the present
model, healthcare delivery is reduced to just another mode of investment for the capitalist in their
portfolio of investments. In such a model, shareholder’s wealth maximization philosophy reigns
over any altruistic inclinations. While this philosophy (of shareholder’s wealth maximization) is
apt for most businesses and human enterprises, it may not serve justly the elementary objectives
of an enterprise like healthcare. There is therefore the need to look beyond such philosophy, if
mankind is to do justice to something so critical like healthcare – where the sole goal is to
influence a person's health positively, directly or indirectly, through procedures executed by
medically educated and trained human beings21.

According to Teague a ‘consumer-relevant and cost-effective model’ may be construed as a

potentially viable solution. Based on present experience, we can conclude that such a model
cannot be driven by a philosophy where healthcare delivery shall be viewed as just another mode
of investment for the capitalist in their portfolio of investments. It is therefore important to
identify whether actually any such altruistic model for non-public healthcare delivery business
exists, and if such models do exist, can those be examined and adopted as a sustainable business
model. In this context, the author has chosen to highlight the case of a private healthcare delivery
services facility in the state of West Bengal that was created out of purely altruistic leaning. The
author also looks at Belgium’s public-private partnership model for health care delivery that
preserves many of the attributes that every human being deserves - universal coverage,
comprehensive coverage of physician services, hospital care, and prescription drugs, free choice
of primary physicians and specialists, and acceptable waiting periods for non-emergency
services.

The Humanity Hospital – A tale of dedication, commitment, vision,

ambition and great determination

In the year 1996, the Humanity Hospital started its operation in a small village named Hanspukur
in West Bengal. The hospital now offers free medical treatment to thousands of patients every
year and is gradually expanding its reaches to the remotest corner of the region where still there
are citizens who lack access to affordable, quality and universal healthcare. We had earlier in the
article indicated that India had 0.725 doctor per 1000 persons in the country in 2014; this being
sharply in contrast to the world median for physician density being 2.5 22 physicians per 1000
individuals.

The said health care delivery facility is a charitable hospital operating under the umbrella of
Humanity Trust, registered under Indian Trust Act in the year 1993, I.T. Act in the year 1994 and
F.C.R. Act in the year 1995 23. The founder of this hospital, Subhashini Mistry, had lost her
husband, a poor labourer , due to gastro enteritis in the 1970s. Soon after his death, she had

21
Oravo & Tuominen, 2002
22
WHO World Health Statistics 2015
23
http://post.jagran.com/meet-subhasini-mistry-a-woman-who-built-a-hospital-by-selling-vegetables-1437485355
resolved that she would not let anyone else face the kind of troubles she had to face due to lack
of healthcare. Over the next two decades she labored as a housemaid, a manual labourer and a
vegetable seller, and saved 20,000 rupees. She also educated one of her sons and got him to be a
physician with aid from philanthropists. Mistry then led the residents of Hanspukur to pool in
more money and established a trust called ‘Humanity Trust’, and also bought around half an acre
of land in 1992 and established a hospital in a small hut. She would subsequently donate her one
acre land for the hospital, and the villagers too donated money to build a thatched shed that
would serve as a dispensary for the financially underprivileged. While some villagers contributed
in cash, some did in kind – providing bamboos, palm leaves, truckloads of earth, wooden planks
and the likes. The poorest of them offered their labour. Thus a 20 feet by 20 feet temporary shed
was erected in 1993 – which would serve as the hospital. A group of trustees – including doctors,
eminent local citizens and serving IPS officers eventually got attracted to this altruistic project
and guided the hospital. The hospital has now expanded to include gynecology, cardiology,
ENT, urology, oncology, diabetology and surgery. The facility now has 3 acres of land and the
hospital has expanded to 9,000 sq. feet spread over two floors. Through all this growth, Mistry
has always been clear about her goal – this was a hospital for the poor, and was not a business.

Subhashini Mistry could have kept her life time of hard earned savings to herself, and might
have lived in a better house and had more mortal possessions. But she says24:
“What’s the use of material things like bangles and saris. We can’t take them with us when we
die. But the happy faces of the cured poor people have given me such joy and meaning in this
life. I really saw the divide in hospitals, up close and personal. There are government hospitals
which provide medical facilities but compared to population the numbers are less so definitely
charitable hospitals comes as a hope. As a hospital we are not only for poor but for all. We have
upgraded our infrastructure/facilities so that we can provide medical services to all class of
people at very reasonable price. However for poor people services are always free”

The case of the Humanity hospital drives home the point that healthcare delivery operations need
not always be a wealth generating proposition, and need not be viewed as a viable component of
an investment portfolio for them to be set up. There are promoters who are driven more by
altruism than wealth creation; and such promoters should be encouraged and incentivized to
promote private ventures in healthcare delivery.

The Belgian Model for Healthcare Delivery

Belgium runs a public-private partnership based healthcare delivery model. The key
characteristics of this model include25:
 It preserves many of the attributes that every human being deserves - universal coverage,
comprehensive coverage of physician services, hospital care, and prescription drugs, free
choice of primary physicians and specialists, and acceptable waiting periods for non-
emergency services26.

24
https://www.healthcareexecutive.in/cover-story-unsung-heroes-healthcare-12
25
https://www.theguardian.com/healthcare-network/2011/may/11/european-healthcare-services-belgium-
france-germany-sweden
26
https://www.brookings.edu/events/the-belgian-health-care-system/
  The Belgian Ministry of Health also recognizes homoeopathy, acupuncture, osteopathy
and chiropractic care as reimbursable alternative treatments, subject to the practitioner
being a qualified doctor.
 Affordable healthcare insurance is an integral part of the Belgian social security system,
and is a must for every citizen
 Hospitals and general practitioner clinics are private and typically managed by
universities, religious organizations or insurance companies. Citizens have a choice of a
social welfare hospital and a religious hospital.
 While social welfare hospitals are highly regulated and will treat patients regardless of
the patient's ability to pay, the religious hospital tend to have a more middle class
atmosphere and are generally associated with 'better' treatment

The Way Forward

The private health sector in India, no doubt, has made some remarkable advances but has done so
at the cost of the public sector. Attempts control it, however, may turn out to be just another
occasion for bureaucratic delays and venality. A superior solution might be to impose greater
social accountability on private providers, making a certain proportion of private services
available to the poor, with no strings attached.