What’s driving the demand to nationalise private hospitals to fight Covid-19?

Is it feasible or even desirable?

WrittenBy:Ayan Sharma
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Recently, a public interest litigation was filed in the Bombay High Court seeking a direction to Maharashtra state government, among others, to ensure that “those reliant on the public health system for non-Covid health services” are also able to access these services for Covid care after “enlisting/sequestering private health facilities" by the government.

The petition, filed by the Jan Swasthya Abhiyan, the Indian chapter of the global People’s Health Movement, emerged out of a growing demand for the country to rope in more private healthcare facilities to fight Covid-19. The organisation made this demand in Madhya Pradesh as well, urging the state to take over private hospitals to tackle the pandemic.

Similarly, in April, a Delhi lawyer named Amit Dwivedi petitioned the Supreme Court to nationalise “all healthcare facilities, institutes, companies and entities related to the healthcare sector in India” until the outbreak was contained. The court refused to entertain the plea, saying it didn’t have the authority to order the central government to do so.

It’s a demand that stems from many factors – a shortage of hospital beds, high costs of treatment in private hospitals, and the fact that not all private hospitals currently fall under the government’s healthcare schemes.

This demand has been bolstered by measures taken by a number of states in the past two months. In late March, Uttarakhand announced 25 percent reservation of beds for Covid-19 patients in private hospitals with over 100 beds. Chhattisgarh, Rajasthan and Madhya Pradesh temporarily took over entire private hospitals to treat Covid-19 patients. In Mumbai, nine private hospitals were asked to reserve beds as were three in Delhi. On April 8, the Andhra Pradesh government took over 58 private hospitals to treat coronavirus cases, adding 19,114 beds to the state’s overall pool.

But why does the government need to take over private hospitals during a public health crisis?

Increasing capacity

The reason is simple, said Brinelle D’Souza, a professor at Mumbai’s Tata Institute of Social Sciences and co-convener of the Mumbai chapter of the Jan Swasthya Abhiyan. There’s a lack of capacity in the public sector.

“If you look at Mumbai city alone, there should be 62,000 hospital beds according to the World Health Organization standards,” D’Souza said. “But there are about 42,000 beds available combining both the private and public sectors. So, when you have such a gap in normal-time data, imagine what it’s going to be like in a crisis like this.”

It is likely that the public healthcare infrastructure will be overburdened when the coronavirus crisis accelerates. As the number of patients surges, public hospitals will have to absorb the bulk of them, shrinking the space for other patients. This is why the Jan Swasthya Abhiyan petition urges the Maharashtra government to turn private facilities into Covid-19 care so as “to ensure non-Covid health services aren’t affected” in the public health system.

Such concerns are echoed by Malini Aisola, co-convener of the All India Drug Action Network. As the pandemic continues to spread, she said, India will need critical care facilities, and the private sector is quite strong in this area.

“We do have a dearth of these facilities in the government sector,” Aisola explained. “With the pandemic growing, the capacity isn’t going to be adequate, as the government’s resources will be stretched.”

Aisola pointed out that there have been reports from across India of patients running from one hospital to another in search of treatment.

In Agra last week, for example, an eight-day-old died after being refused treatment by six private hospitals. A private hospital in Mumbai refused to admit a nine-month pregnant woman because she didn’t have a Covid-19 test report. In March, a doctor was refused treatment by four private hospitals over coronavirus fears, before he was finally admitted in a government hospital and put on a ventilator.

Most of these private hospitals turn patients away because of fears of the virus spreading. In April, when a handful of regular patients tested positive for coronavirus at big private hospitals, like Max Hospital in Delhi’s Saket and Pune’s DY Patil Hospital, anxiety spread across the country. For example, many private hospitals in Chennai, Hyderabad and Bengaluru mandated screening of all incoming patients, and also restricted their entry unless it was an emergency. In Bihar, most of the 250 private hospitals empanelled under Ayushman Bharat closed their operations, fearing they would not be able to contain the infection if it spread on their premises.

In view of this, the governments of Delhi and Maharashtra recently warned private hospitals not to turn away patients for any reason. “But the governments will also have to monitor that these directives are followed,” Aisola said.

Going ahead, states need to set up mechanisms to increase the involvement of the private sector to enhance capacities, Aisola added, “but without pinning the financial burden on the patients”.

Treating the poor

A key question in the debate over the government roping in private health facilities is who will bear the cost of Covid-19 treatment.

As things stand, there are different scenarios.

Treatment is free in government hospitals across states. Among private hospitals dedicated to Covid-19 care, those taken over by the local authorities provide free treatment. For example, the Sri Aurobindo Institute of Medical Sciences in Madhya Pradesh’s Indore is one of the largest private hospitals taken over by any state so far. According to Dr Ravi Dosi, a chest specialist at the hospital, they have treated about 800 Covid-19 patients for free so far.

Private hospitals that have not been taken over by the government but have set up Covid-19 wards continue to charge their patients. In Delhi, the government has designated Sir Ganga Ram Hospital, Max Saket and Apollo for Covid care, and their patients pay for treatment unless covered by insurance schemes. Same is the case with private hospitals dedicated to Covid care in Mumbai and other cities.

“Private hospitals have been implicated in denying treatment,” said Aisola. “And when they have been willing to take patients, they have been found to exploit patients by grossly overcharging.”

Though it varies, the cost of 15 days of treatment for Covid-19 in a super-speciality hospital in a metropolitan city can go to Rs 7.5 lakh. For instance, a Kolkata hospital recently billed a low-income family Rs 5.5 lakh for treating an elderly woman for Covid-19. The family had already shelled out Rs 1.9 lakh.

In view of this, the central government and some states have sought to provide relief to low-income patients.

On April 4, the Centre announced that testing and treatment costs for Covid-19 patients will be covered under the Ayushman Bharat scheme. When private hospitals were taken over in Rajasthan, Chhattisgarh and Madhya Pradesh, officials told Scroll that the treatment would be free. The Madhya Pradesh government said it would reimburse private hospitals as per pneumonia treatment charges under the Ayushman Bharat scheme. Chattisgarh said the financial support would be provided from the state disaster management funds. In a notification on April 23, the Bengal government said it would provide free treatment to Covid patients in private hospitals requisitioned by the state. It also promised to reimburse all charges to the hospitals.

In Maharashtra, the worst-affected state in the country with more than 24,000 cases, the government announced 100 percent medical cover at 1,000 hospitals empanelled under the flagship Mahatma Jyotiba Phule Jan Arogya Yojana. Covid-19 patients with ration cards now receive free treatment in these hospitals.

Impeding state efforts

But there are limitations to such efforts.

For example, most of the designated private hospitals in Delhi and Maharashtra – two states which account for nearly 43 percent of India’s coronavirus cases – do not come under the Ayushman Bharat and Jyotiba Phule schemes. So, low-income patients are compelled to head to government hospitals, increasing the burden on them.

Amit Dwivedi, the lawyer who went to the Supreme Court to temporarily nationalise all healthcare facilities in India, said these factors make it an urgent necessity for the government to temporarily take over all private hospitals. The Ayushman Bharat scheme has about 40 crore intended beneficiaries, he pointed out, leaving out nearly 95 crore people in the country.

“Even if we assume a middle- and upper-class population of roughly 15 crore, we’re still left with a huge population of nearly 80 crore with average incomes,” Dwivedi told Newslaundry. “A large number of these people have now been impacted by pay cuts and shutdown of business. How will they pay for critical care treatment in a private hospital when infected by the virus?”

This problem of treatment costs is automatically solved, he added, when the administration takes over a private hospital instead of merely designating it as a Covid-19 treatment hospital.

Brinelle D’Souza argued that limiting the Jyotiba Phule scheme to only ration card holders during a crisis serves a restricted purpose. Mumbai has a large population without ration cards who are economically vulnerable, she said, whereas there are middle-class families that use these cards as identity documents.

“So, what it means is that those who genuinely cannot pay for their treatment will be left out but those who can afford will be covered by the government,” D’Souza said. “That is why the focus should be on the income levels of the targeted beneficiaries.”

She suggested that proofs of income be used as an additional criterion to access the Jyotiba Phule scheme.

“For example, many hawkers and street vendors are part of registered associations. They can furnish individual letters detailing the incomes for respective members,” she said.

Additionally, D’Souza said, the government should ensure that charitable hospitals provide free treatment to low-income groups. “Several big hospitals in Mumbai are charitable in nature which mandate them to reserve 10 percent beds for concessional treatment and another 10 percent for free treatment of the poor. We are demanding that the charity commissioner take over these beds, put them in a centralised pool, and provide them for free to the poor.”

Taking necessary steps

Despite the strict lockdown, the number of confirmed Covid-19 cases and deaths has surged in India. As of 8 am on May 13, the country had reported 74,281 cases and 2,415 deaths. Out of these, 47,480 are active cases.

The lockdown is scheduled to end on May 17, though prime minister Narendra Modi indicated there would be a Lockdown 4.0 with “new rules”. Some experts predict that India’s coronavirus outbreak will hit its peak in July before being contained.

Countries such as Spain and Ireland nationalised all hospitals in March to battle the pandemic. Should India take a cue and do the same?

K Sujatha Rao, former union health secretary, told Newslaundry that the government is technically empowered to do anything in national interest. “Health may be a state subject in the Constitution but in a national emergency situation, the Centre can pass an ordinance and take over all private hospitals,” she said.

But, she warned, there are some complications in an exercise like nationalising all hospitals. “That is why the government prefers to requisition resources in private hospitals, or take them over temporarily. The provisions of the Disaster Management Act and the Epidemic Diseases Act are adequate to do that.” These Acts, and the rules framed under them by different states, allow government bodies at various levels to assume special powers in the event of an epidemic outbreak.

Amit Dwivedi agreed with Rao. He added that Article 21 of the Constitution also guarantees “right to life”.

“The point is, there are sufficient legal provisions to help the common people in this crisis...But the government has to do something,” he said. If not a universal takeover of private hospitals, the Centre should at least bring all private hospitals admitting Covid-19 patients under the Ayushman Bharat scheme, he said. “That will also a fix a lot of the problems.”

Rao advocated the same position. “If I were the current health secretary, I would have done that,” she said. “The poor need help at this moment as many private hospitals have charged exorbitant prices.”

Though a nationwide empanelment of Covid-dedicated private hospitals hasn’t been done yet, another model has recently gained support. Invoking the powers enshrined in the Epidemic Diseases Act, Mumbai’s municipal corporation recently capped the bed and consulting charges in private hospitals to ease the financial burden on Covid-19 patients without any insurance cover. Accordingly, charges now range between Rs 3,000 and Rs 5,000 per day.

D’Souza and Rao both agreed that this model should be replicated across states. “We are dealing with a public health emergency. So, this is a welcome move that other states can also implement,” D’Souza said.

Challenging times

But key stakeholders in the healthcare industry are apprehensive of such a move.

Dr Naresh Trehan, chairman and managing director of the Medanta Hospital in Gurugram, argued that the government capping prices would be a “destructive” move. (Disclosure: Trehan is married to Madhu Trehan, the co-founder and former editor-in-chief of Newslaundry.)

“That is because the cost of treating a Covid patient is nearly double that of a regular patient,” Trehan said. “That is why the hospitals won’t be able to afford that [capping of prices]. The treatment will be free of cost for patients below poverty line. Those under Ayushman Bharat will be covered by the government’s flagship health insurance scheme." Medanta, along with two other private hospitals, Artemis and Fortis, have set up a dedicated Covid-19 hospital in Gurugram.

Additional costs for Covid-19 patients result from the need to use personal protective equipment and maintain a dedicated staff. Dr DS Rana, chairman of Sir Ganga Ram Hospital, said treating a Covid-19 patient, on average, costs around Rs 10,000 more per day.

“A good PPE kit can cost up to Rs 1,500. In a day, a patient needs to be visited multiple times by doctors, nurses and ward boys, all wearing PPE kits. So, that’s how the expenditure goes up,” Rana said. “We need to keep the staff separately and carefully. We have to provide for their food and safety requirements.”

The group’s main hospital in Delhi’s Rajinder Nagar does not currently handle coronavirus patients; it only provides laboratory services to test samples from such patients. Instead, it runs an affiliated facility on Pusa Road entirely dedicated to Covid-19 patients, with 42 beds. Additionally, its City Hospital on Pusa Road will begin operating as a dedicated hospital with 120 beds in a couple of days.

While expenditure is increasing, business at private hospitals has slumped. Ganga Ram, for example, has seen only 40 percent occupancy during the lockdown. The impact has been more severe on smaller hospitals. Shri Ram Trauma and Super Speciality Hospital, a 37-bed hospital in Rajasthan’s Sikar, has seen only 10 percent occupancy during the lockdown period. The district administration has now asked it to keep two normal beds and six ICU beds ready for Covid patients.

Considering the dwindling revenues, Dr Ajay Mishra, the founder and director of Shri Ram Trauma and Super Speciality Hospital, said it will be a challenge to continue such treatment. “Even without any business, we have to pay salaries and other running expenses. Recurring expenditures like PPEs, masks, linen bedsheets and other clothes for dealing with [Covid-19] positive patients will be tough for us to meet,” he said. This way, small hospitals like his will not be able to survive for long, he added.

Both Rana and Mishra hope that the government will provide protective gear at subsidised rates to ease the pressure. According to Trehan, the industry is asking the government for two things to overcome the crisis: the money due to them from different government agencies, and reasonable rates for borrowing money.

“Dues like the Central Government Health Scheme and Ex-Servicemen Contributory Health Scheme, and also dues from public sector undertakings, should be cleared immediately,” he said. “In addition, we are asking for loans from banks at a rate lower than the normal, say 4-5 percent instead of 10-12 per cent.”

Such measures would not cost the government anything or take away from any scheme, Trehan argued, before pointing out that it was anyway a temporary phenomenon. “These are simple demands. If the government fulfils them, the hospital industry will get some relief.”

Responding to the situation

According to a report in the Times of India, in the current pool of dedicated hospitals, the bulk of the capacity remains in the public sector. Only about 10 percent of the beds are in private hospitals, mostly in metro cities.

Currently, the report said, there are around 970 Covid-only hospitals in the country. In addition, there are around 2,300 Covid health centres: either entire hospitals or dedicated blocks with oxygen support for patients with moderate symptoms. About 1.35 lakh beds have been earmarked for Covid-19 patients across the country, out of which nearly 99,000 have oxygen support and the remaining 35,000 are in ICUs.

In addition, there are around 6.45 lakh isolation beds earmarked for suspected cases and asymptomatic or mild patients of Covid-19. A considerable portion of these isolation facilities are in the private sector including hotels, lodges, and apartments, in addition to schools and stadiums.

Citing health ministry data, the report further says that only 1.1 percent of all Covid-19 patients are on ventilators, 3.3 percent on medical oxygen, and 4.8 percent in ICU beds.

CK Mishra, who heads the empowered group formed by the Centre to monitor the availability of hospitals to treat Covid-19 patients, said there needs to be a graded response.

“Currently, our hospitals are not overwhelmed, both in public and private sectors. There is enough space in the country right now,” he said. Out of nearly 1.35 lakh beds available for critical care at the moment, he said, only a tiny fraction – a little over 1,000, probably – has been used for ICU and oxygen support. Isolation beds are not a matter of concern as those are required for cases without any serious condition, he added.

There are many private sector hospitals, Mishra continued, which the government is currently not designating for Covid-19 care because other patients need to be treated as well.

“But to be prepared, all district magistrates and state governments have been told that, as per need, they can requisition any hospital, be it private or public. They will all be a part of the Covid-19 fight,” he said. The government’s strategy to engage the private hospitals is therefore not a uniform one for the entire country. It depends on the severity of the situation and the resultant demand in a state, he said.

A reflection of this strategy could be seen a week ago when the Gurugram administration in Haryana requisitioned 600 beds in six private hospitals after the number of cases crossed 100 in the district. Similarly, the Delhi government has asked the Ganga Ram Hospital to ready and operate its City Hospital. Given the increasing case count, the government designated it as a Covid-only facility in the first week of this month, a spokesperson said.

On treatment of low-income patients, Mishra said they have a system where they know which patient was supposed to go where. “So, we can easily handle that. As far as the poor patients are concerned, there is no problem. They are fully covered [for treatment cost].”

The existing data suggests that despite demand from different quarters, the situation is not worrying. K Sujatha Rao agreed.

“It’s an evolving phenomenon. But as of now, it is very much under control,” she said. “So, going ahead, depending on the severity in different states, increasing beds in private hospitals is an option.”

There is no one-size-fits-all policy for this and responses will vary as per need, she added.

Update: This piece has been updated with a disclosure on Dr Naresh Trehan. Dr Naresh Trehan's quote was used only in part in the article. It has been updated with the full quote for clarity.


This piece is part of a project supported by the Thakur Family Foundation. The Thakur Family Foundation has not exercised any editorial control over the contents of this research.


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