Government Should Takeover Private Hospitals

Healthcare Facilities

The fourth phase of the National Lockdown is coming to an end in the next 4 days. The compulsions of the economy means that the government cannot afford to continue the lockdown any longer. The purpose of the lockdown was never to get on top of the virus but to improve our preparedness. As the lockdown is eased, the number of cases is going to increase exponentially. The government hospitals are already exploding at the seams in managing the existing patients. The new patients which will come once the lockdown is eased will have to be managed by the private healthcare sector. The government is trying to impose unreasonable and unrealistic pricing on the private hospitals which is never going to work. In a democratic setup you can force the hospitals to open but you cannot force the people to work productively.

The government cannot create massive healthcare infrastructure to fight Covid-19 in a short period of time. Infact the 60 plus days of lockdown gave a wonderful opportunity to both the central and state governments to tidy up the government healthcare infrastructure, arrange for increased testing, quarantine centres, PPE’s, Ventilators and other weapons to fight this menace. Only time will tell how the governments utilized this period, though the reports are not very encouraging. During this period the government must have worked out an arrangement with the private healthcare sector to share the burden of this pandemic. The government must have taken over the private hospitals with their infrastructure and the staff. The cost of taking over a 100 bedded hospital is much less than creating similar number of beds in the government sector. The project cost in the government sector is much higher than the private sector and so are the salaries except the salaries of the star doctors which in any case are not there with the government.

The logistics would work out as follows :

Number of Nurses for 100 beds – 150 @ Rs. 20,000 per month = Rs. 30 Lacs
Number of Medical Officers for 100 beds – 50 @ Rs. 60,000 pm = Rs. 30 Lacs
Number of Paramedics and other staff – 50 @ Rs. 15,000 pm = Rs. 7.5 Lacs
Number of Physicians & Anaesthetists – 15 @ Rs. 3,00,000 pm = Rs 45 Lacs

Add to this the consumables, medicines, testing cost, electricity, EMI and other expenses and the total expenditure for each month for a 100 bedded hospital with 20 ICU beds would be in the range of Rs. 1.5-2 Crores which would be approximately Rs. 6500 per bed per day. There is no profit for the owners at this rate. The government can decide to either pay this much amount to the owners for each bed that has been taken over by the government (ofcourse since the cost for ICU bed would be higher than this, the beds taken over by the government should be in the ratio of 80:20 for ward beds and ICU beds )

If all the beds of a particular hospital are taken over then the government can ask the star doctors and other specialists of that hospital to take a chill pill for the next 12 months and either go for more study or for a long vacation. Ideally the government should take over 20% of the beds in every hospital in the country. This would give access to the government to almost 1 lac beds in the shortest possible time. The cost would also be the lowest possible at around Rs. 2,000 crores per month. The annual cost would be close to Rs. 24,000 crores which is just a fraction of the special economic package announced by the Finance Minister recently.

Currently the central government and all the state governments together spend about 40,000 crores on health per month so they can easily arrange for another 2,000 crores to acquire 80,000 ward beds and 20,000 ICU beds from the private sector at a no-profit basis. The owners of the private hospitals will be doing patriotic duty by giving away 20% of the beds at no-loss basis. Another argument which is always proffered even by the courts and the public alike is that the private hospitals have been given free or subsidized land so they must give free treatment. Very few hospitals in the country have received subsidized land and even those which have got it have been giving 20% of the beds for free for ages. The cost of land in the total project cost of a hospital is not even 20% and the cost of project in the operational expenses of a hospital is close to 10% which means that the hospitals which got free land should have been giving 2% of the beds for free. However not even a single hospital has got free land in the entire country. In Gurgaon, hospitals like Artemis, Medanta and Fortis were given land at a price of Rs. 2 crore per acre when the market price for institutional land was 5-6 crores per acre. This is not free land and still these hospitals have been giving 20% beds for free to the government sponsored patients.

In nutshell, neither the government has the resources to acquire private hospital beds nor the logic to force unrealistic pricing on the private hospital owners. The governments can keep passing whimsical orders capping the price for tests and beds but nothing will come out of this. We have just seen the plight of the migrants, so expecting that the government is going to do anything for the health of these poor people is expecting too much. The middle classes in any case do not matter as they can be swayed by the media – both mainstream and social to keep them busy with non-issues. Most of the middle class has insurance cover and therefore the cost of covid treatment is not going to be from their pocket so they should not be bothered. Indo China and Indo Pak is already coming back to the news headlines and very soon the Covid news would be completely vanishing from the media. So as the lockdown opens from 1st June, everybody is on their own and must follow the best practices to stay away from the Covid Virus. Wash hands frequently, don’t touch anything and even if your hands touch things then don’t touch your face with the hands. Keep digital wallet and physical sanitizer in your pocket. Physical love should be replaced with Virtual Love – Now is the time to use the emojis.

Kuldeep Chaudhary

Kuldeep Chaudhary has more than 28 years of experience across industries which include Government, Taxation, Insurance, Information Technology and Healthcare. He has more than 20 years of experience in the field of Healthcare and has handled all the verticals of Healthcare which include Healthcare Planning, Marketing, Operations, Purchase, Finance, IT, HR and Strategy. He has deep understanding of the Healthcare Industry in India

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