‘’Government schemes have non-viable package rates for almost all surgeries under their list’’

How many hospitals come under KPHF and on average how many scheme patients do they cater to in a month?

Dr Prashant B Katakol

All the hospitals and several medical college hospitals are on KPHF platform to put united efforts to resolve the current crisis. They amount to more than 90 per cent of the surgeries performed in the state on a day-to-day basis under the schemes, today.

Please explain the dilemma faced by KPHF in dealing with the scheme patients?

This can be explained by a short story.

There were 10 tailors (hospitals) in a city. The government donated a hanky (BPL, Yeshasvini, RSBY cards) to a poor man and the poor man came to a tailor requesting him to stitch a pair of trousers (perform surgery) for him. The tailor realised that this poor man has only the hanky and no more cloth with him, but he needs trousers to wear (needs surgery for survival). The tailor thought that he has nine people coming to him with enough cloth (cash paying patients) to stitch trousers for them and he saves 15 per cent of the cloths from them and so he can stitch trousers for this poor man with the saved cloth from others, though, this poor man has come with an impractical demand. The tailor did stitch the trousers for the poor man from the cloth he saved from his rich clients. The government witnesses this and concluded that a hanky is sufficient for stitching full trousers. It then starts doling out hankies to the entire population directing them to get trousers stitched out of the hankies issued to them. Over a period of time all the tailors in the city started having more than 80 per cent of their clients coming with the hanky, demanding trousers to be stitched for them. The tailors are now in a situation in which they are not able to stitch trousers for anyone because the government has decided to give hankies to 100 per cent population, and directing them to get trousers stitched.

Problems with the schemes:

• All three schemes have non-viable package rates for almost all surgeries under their list.
• The package rates are same for patients with co-morbid conditions such as an elderly person with associated heart or renal disease and a patient with no co-morbid conditions such as a youth.
• The entire responsibility of the patient is that of the hospital once it accepts the patient for treatment and no payment is sanctioned for any kind of complications arising subsequently, even when they are one arising from the nature of the disease itself and not doctor or treatment induced .Which doctor or hospital can handle any patient if such a condition is put-forth to him, prior to taking up the treatment?
• How can any hospital offer all OPD evaluation, OPD medicines and OPD investigations free, from his side, without being compensated for the same? The trust wants us to pay only package rates, if and when we undertake surgeries.

For example, if a hospital performs 100 free MRI s on OPD basis, more than 85 per cent to 90 per cent will have medical diseases and hospital has to spend for it from its coffers and the Trust does not compensate. From their side, hospital would have spent Rs 3500 per MRI amounting to Rs 3.5 lakhs. If it has 10-15 patients who need surgery, ultimately only fraction of them agree to subject themselves for surgery. The entire package amount of all the surgeries performed among these patients will be grossly less than what has been spent by the hospital on OPD investigations alone!

• There is no control over the beneficiary population, the number of BPL and Yeshasvini card holders has spiralled out of control and the government, is very much aware of how many bogus BPL cards are issued to population of Karnataka.
• Over the last 11 years in Yeshasvini scheme and over the last three years in Arogyasri scheme, the package rates have either remained the same or have been further reduced with time.(CABG package rates have been reduced, spinal fusion surgery package rates have been reduced unilaterally by the government). RSBY scheme releases only Rs 10000 per person per surgery with a maximum of Rs 30000 for the entire family. The scheme expects all complicated heart, brain, spine, urological surgeries to be performed within Rs 10000!
• The cost of running private healthcare establishment has gone up several times in the last 10 years with consumer price index also increasing from Rs 100 to Rs 241 according to governments own publications.
• Though this scheme is a voluntary one, in which, hospitals can decide whether to join the scheme or not, with more than 90 per cent of their clientèle insured under the schemes, do we really have a choice? It is suicidal both ways.
• There is no control over the list of beneficiaries which has spiralled out of control and there is rampant misuse of the schemes with the rich and even government servants aremisusing it.
• The non-viability of the package rates combined with uncontrolled number of beneficiaries is posing serious threat to the survival of private healthcare industry.
• This problem is now going to be multi-fold with the Governments plan to extend the schemes to cover 100 per cent population, to include APL population, without proper thought process or planning.

Could you give examples of tariff costs that are unreasonable for hospitals to comply?

There are numerous glaring examples:

• Cardiothoracic surgery – Eg. Aortic Valve Replacement costs Rs 1,33,000 and Yeshasvini offers Rs 75,000 only.
• Neurosurgery – Aneurysm coiling procedure- Package rate is Rs 50,000 irrespective of number of coils used for the patient. This includes entire pre op investigations such as angiogram, CT scan, surgery, medicines, entire hospital stay, medicines at discharge, travel charge of the patient, and continued care for one year.

Angiogram costs Rs 9000 in a government hospital such as Jayadeva Hospital for general ward, CT scan cost a minimum of Rs 3000 for plain and contrast CT consumables for the procedure which needs to be purchased by the hospitals are as follows

• Microcatheter – Rs 36800
• Microwire – Rs 18500
• Detachable coils – (Rs 32000+ per coil) three coils on average, sometimes more. Rs 96000
• Guiding catheter Rs 8500
• Total cost of purchase for the hospital – Rs 1,59,800
• Cost of pre operative investigations – Rs 12000
• Plus other consumables and this is excluding professional fees or establishment/ running cost in the calculation. How is Rs 50,000 sufficient for the procedure?

• Urology
  Case 1: (Under Vajpayee Arogyasri Scheme)
  Procedure code: 901
  Procedure name: Open Pyelolithotomy
  Package amount: Rs 10,000
  Total calculated expenses – Rs 31,500

• Investigation charges Rs 5,000 (Including both pre-op and post-op)
• Drugs: approximately Rs 7,000

The package amount is crossed at getting pre op investigations and purchasing drugs for the patient! What about expenses below?

• OT charges (Minimum)
• Anesthesia
• Surgeon charges
• Assistant charges
• Hospital stay for one week @ Rs 500 per day
• Food and transport charge

Case 2: (Under Yeshasvini scheme)
Procedure code: URO-14
Procedure name: Adrenelectomy (Open)
Package amount: Rs 15,000

It is a supra major operation

• Cost of drugs: Rs 8,000
• Anaesthesia charges: Rs 3000 Within the remaining Rs 4000, all the below charges are to be covered!
• Surgeon charges
• Assistant charges
• Operative room/ equipment utility
• Hospital stay for one week

Total incurred expenses: Rs 34,000

In this case hospital will incur a loss of Rs 19,000

What demands will KPHF put forward to the government?

• Population below poverty line- 20-23 per cent of population- Hospitals need viable package rates.
• Mid income but vulnerable segment of population- 55 per cent- let the government fix maximum cap on the rates, but pay only part of it, allowing the rest of the amount to be collected from the beneficiaries to add up to the capped limit.
• Well to do population- 25-27 per cent- Not to govern the pricing, or, fix a base price and allow any amount to be collected above the base price from the beneficiaries.

Critical assessment of existing health insurance models in India , report released by Planning Commission of India, states, “The recent growth of insurance schemes in India, in many ways, marks a new phase in India’s quest to provide healthcare to all. The key design features of health insurance scheme, revenue collection, pooling of funds and purchasing care need government intervention in order for the schemes to be equitable, efficient and effective. In terms of revenue collection, general taxation is the main source of funds for both health insurance schemes and direct public provision of care. Government must revisit the decision to bear dual financial burden of funding the network of public hospitals and national insurance. The risk pool for most schemes comprises the BPL population with least ability to pay leading to segmentation of the society. If the same schemes are extended to other populations of the society, the pools will become bigger and more financially unsustainable unless the beneficiary contribution is increased as in the case of rich subsidising the poor in typical health insurance. The benefit package and package rates are the tools of purchasing care that government can use not only to control costs but also to monitor public expenditure on health, but these two need coordinated effort by different schemes to optimise benefit for the beneficiaries.”

What will happen if the tariffs are not revised?

The economy of a hospital includes provisions for the establishment costs, the running cost, cost of replenishment of equipment which have a finite life span, continued investment on Human training towards advances in medical science and on latest technology to be inducted into their healthcare units to be relevant in the context of current standards existing across the globe.

If the entire population is to be included into the healthcare model which was proposed for the poor minimum population of the state, then the private healthcare industry will degenerate into what the state government health set ups have become.

What are your suggestions for the government to benefit both the patients and the hospital?

Sustainable quality healthcare for all should be the theme. What is good for politics is not good as a policy. What is good for policy is not good for politics. The government can certainly strike a balance between the two if it puts honest efforts. We as a forum are ready to play any constructive role in partnering the government to resolve the issue.

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