Medical debt a major cause of poverty in India

R Kumar
President, Society for Prevention of Ethical and Affordable HealthCare

About 55 million Indians were pushed into poverty in a single year due to patient- care costs, as per a study by the Public Health Foundation of India. Why? Lack of affordable hospitals, missing doctors, ill-equipped health professionals, fake and expensive drugs, antibiotic resistance, childhood malnutrition, neglect of women’s health and paucity of funds; all have been affecting the Indian health sector. The rising cost of treatment, especially in corporate hospitals, is making the life of the citizens difficult. People dread falling sick for fear of falling into a debt trap.

In many situations, the cost of medicines, devices, tests and interventions is so high and unessential that it is a sheer wastage of resources. Leveraging doctors’ online communities through micro-sites of the pharmaceuticals is a new mode of deceit by these companies. Mercifully, a significant share of India’s population seems to avoid the formal medical system, lest they face a debilitating financial burden. Many families opt to go for any treatment even when a member faces a life-threatening disease — a staggering 39 per cent do not receive any medical attention before death. Rich persons may identify a relatively minor indisposition as ailment and go for treatment, while the poor might perceive an ailment only when it is work-disabling or life threatening. 

Will the Ayushman Bharat (AB) scheme assuage the anxieties of the Indian people? The fact is that the public hospitals are crumbling under excessive patient load, coupled with lack of resources. Even the public health budget remains pegged around one per cent of the GDP, in spite of promises to raise it to 2.5 per cent. People are forced to bank on corporate hospitals, though the ability of most patients to pay is limited. 

Earlier, medical debt was a narrative of the American patient-care, but now developing countries like India are deeply immersed into it. One of the major reasons why India’s poor incur debt is the cost of healthcare, which has risen disproportionate to incomes. Another is wasting lifetime earnings or selling assets to pay for end-of-life situations, where chances of survival are minimal. Less than 15 per cent of the population in India today has any kind of healthcare cover, be it community insurance, employers’ expenditure and social insurance etc. 

Former President Pranab Mukherjee drew attention to the healthcare emergency India faces — as 80 per cent of the costs are paid out of pocket and healthcare debts plunge four to six crore Indians into poverty every year. The causes of poverty are obvious across the globe: Loss of income with the death of the earning member and the high cost of treatment before death. Americans borrowed an estimated $88 billion to cover healthcare costs in 2018; many had to go for bankruptcy eventually. More than 36 per cent have no insurance of any kind, many more have skimpier health  insurance plans. These plans may require patients to pay thousands of dollars before insurance kicks in.  Even the insured often can’t afford to pay their medical bills in the US. Many physicians indulge in unethical practices to supplement the dwindling earnings from profession. 

Will India’s AB be able to save the people from poverty? “It is like a leaking bucket. Though a lot of effort is being put to bring people out of poverty due to health expenses,” said Dr Indu Bhushan, CEO of the National Health Authority.

But do the corporate hospitals really fleece the patients? Decades ago, healthcare was only provided by the government and hospitals run by trusts with the aim of charity. It was with the establishment of corporates like Apollo that healthcare started paying attention to profit margins. Corporate hospitals are built with large capital investments, which means higher cost of treatments. While there is some truth in the allegations of arbitrary overbilling, the hospitals’ version of high capital cost is also true. Surprisingly, these hospitals are battling poor financial health. Four of India’s large publicly traded hospital chains — Apollo, Narayan Health, Fortis and Max India — have cumulatively lost Rs 6,300 crore in the last two years. Recent reports suggest transfer of ownership of Fortis, Max, Medanta and others to foreign hands. Will this augur well for affordability to the native patients?

The costs are rising and hospital chains are losing their grasp over pricing, with healthcare costs being capped due to political reasons. There is a need to fix fair prices of medical services. Comparison with government hospitals is problematic as several cost components are subsidised in the public sector, such as land or buildings. Thus, without addressing the issue of pricing, the AB scheme — announced in the Union Budget in February with a promise to provide Rs 5 lakh a year to each of 100 million targeted families for secondary and tertiary care hospitalisation — seems premature and will become unsustainable over the years. Private hospitals are looking for profits and not charity. If one can set targets for profit in your IT firm or law firm, why should it be any different for the medical industry? 

The governments have been pushing pharma companies, medical device makers and hospitals to cut prices through various policy interventions. One of the biggest was the cut in the price of stents and knee implants in 2017 by over 70 per cent. However, over-regulation can lead to the death of these elite institutions of patient-care, which were designed to cater to the rich segments of society. We hope the government continues to make policies to make private patient-care affordable, even as it makes adequate arrangements for the common man in the public hospitals. Can a five-star hotel with a luxury price tag survive if millions of poor hungry barge into it?

It is also necessary that preventive health gets focus, so that hospitals are not burdened with an overwhelming load of patients, suffering from diseases like diabetes, coronary problems, 

stroke and kidney failure in an advanced stage. Aggressive and expensive care of patients may be reserved for the ‘likely to survive’ patients and not for those who are in ‘end of life’ situations. Those ‘unlikely to survive’ should be shifted to palliative healthcare. The realistic expectations will prevent the torture of the dying and debt trap of the families of the deceased.