Indian hospitals deal with over 950 compliances in a year, reveals report

TeamLease Regtech, a Regulatory Technology (Regtech) solutions company, has released its report titled ‘Simplifying Compliance Management for Hospitals.’ The report presents a peak into the complexities that have plagued the hospitals in the country. The report analyses the extant regulatory framework, discusses challenges and recommends action items to mitigate those complications.

A typical single-entity 50-bed hospital with a diagnostic centre, radiology, pathology lab, and pharmacy with a corporate office in a single state needs to deal with 623 unique compliances. Of these, 421 (67.5 per cent) are at the union level, 192 (31 per cent) are at the state level, and 10 (1.5 per cent) are at the municipal level. The annual compliance obligations rise to 967 once the frequency of compliances is factored in. The hospital must also obtain 100 licenses, permissions, and approvals under 58 acts.

Rishi Agrawal, CEO, TeamLease RegTech, says, “The healthcare sector is a critical part of our daily lives with over a billion consultations performed every year across the country. The sector employs ~8 million people and the demand for healthcare professionals is expected to double by the end of the decade. The sector needs to expand and grow significantly to cater to the growing population. The country will have over 158 million people (15 per cent of the population) over the age of 65 by 2035. However, the complexities of compliance have restrained growth. Even a small hospital needs to deal with at least 967 instances of compliance every year. These compliances include at least 53 different types of licenses, permissions and registrations. Without proper processes in place to ensure smooth compliance functioning, senior management cannot help but deal with the aftermath of ad-hoc, manual compliance operations. Transforming compliance operations by leveraging digital compliance solutions is the need of the hour. This report explores the underlying complexities that affect employer compliance in hospitals.”

Hospitals must adhere to various regulatory requirements to ensure compliance with the Narcotic Drugs and Psychotropic Substances Act, 1985, and the Maharashtra Narcotic Drugs and Psychotropic Substances Rules, 1985. This includes making annual disclosures to the licensing authority regarding the purchase and consumption of manufactured drugs and maintaining detailed accounts of drugs received, used, and held in stock. Under the Pharmacy Act 1948, and the Pharmacy Practice Regulations, 2015, hospitals are required to maintain patient records for five years, along with proper documentation of compounding, labelling, dispensing of drugs, and prescription records. Additionally, hospitals must document and maintain records of drugs administered to patients and inform authorities about any cases of communicable diseases. The Pre-Conception and Pre-Natal Diagnostic Techniques (Prohibition of Sex Selection) Act, 1994, mandates that hospitals preserve the names of individuals who have received genetic counselling for two years.

The report reveals that a hospital must obtain 100 licenses across Union, State, and Municipal/ Local levels. Labour compliances account for ~31 per cent, while industry-specific obligations make up more than 27 per cent of the unique obligations. Once the frequency of these compliances is factored in, it is revealed that such a hospital must cater to up to 967 obligations in a year. These obligations rise exponentially as soon as the business increases its scale of operations and expands its geographical footprint. Tracking and managing all applicable regulatory obligations can be exceedingly difficult when done with Excel sheets that are dependent on people and done on an ad-hoc basis. The report concludes with recommendations for compliance reforms that can further improve the ease of doing business and provide a new-age solution for compliance management for employers.