Private Hospital administrator has a Difficult Pill to Swallow

Should the government dial back its recent policies on healthcare delivery? How can the burden on hospital administration be eased without compromising the patients?

Dr  Ashish Banerji, Head Hospital Administration for Symbiosis University Hospital, and Associate Professor at Symbiosis Institute of Health Sciences


The Indian private healthcare sector is undergoing momentous changes, and the pace of change is accelerating. Nearly 80 % of healthcare is delivered through private providers in India. Out of these only 5% hospital beds are managed by the corporate hospitals rest are managed by small hospitals or nursing homes. But today private healthcare has become synonymous with corporate healthcare delivery, which in the collective consciousness of the Indian people, is equivalent to profiteering hospitals. This is not entirely true. One needs to look at the larger picture and the truth is that it is very difficult to have a private practice in healthcare in India.

Roadblocks Galore

Hardly a day goes by without some news about a case against a hospital, or some violence against a doctor or hospital. In the past occupational health hazard for healthcare providers was limited to cross-infections, stress, NCD or depression. And all of them still exist. But now doctors and nurses are also afraid of violence and humiliation at the hands of some anti-social elements. Besides these the government, both the Central as well as State government, has taken steps which are not pro doctors, and hinder the delivery of healthcare in some ways.

In addition axillary government bodies like The National Pharmaceutical Pricing Authority (NPPA) have now focused their time and effort to control healthcare delivery either by capping prices of stents used in cardiology, orthopedic implant prices, and the prices of various drugs. This is all for the benefit of patients. The interventions by government (Central and States) and by courts, have had major impacts on pricing of healthcare delivery and have impacted administrators and clinical consultants equally.

What does all this mean for the patient at large? To ascertain the effects of these two sweeping changes, I scanned media reports for relevant stories and spoke to leading hospital administrators all over India, encompassing the four major regions: North, South, East and West. While some of the inputs were similar, others were widely divergent.

Noted Incidents

Two incidents, which shook up the entire private hospital industry in India, need mention. The first one took place on 27 February 2017, when a patient called Sanjay Roy died soon after he was shifted from Kolkata’s most prestigious hospital (Apollo Gleneagles) to a Government hospital called SSKM. His wife cleared bills over Rs Seven lacs at Apollo, but SSKM hospital doctors said that no surgery had been done at Apollo to arrest his intra-abdominal bleeding.

An FIR was lodged against the hospital for extortion. Just a few days before this, the CM of West Bengal Mamata Banerjee had lashed out at leading private hospitals where the press was present. She also stated that West Bengal Clinical Establishment Act has to be modified and lent more teeth. “The West Bengal Health Regulatory Commission will have representatives of private hospitals, health department, consumer affairs department, doctors and police representatives,” said the Chief Minister.

A few days later Dr. Rupali Basu, Vice President and CEO (East) of Apollo Hospitals, resigned. A few weeks later, Dr. Pratap Reddy’s daughter, Ms. Preetha Reddy, came to Kolkata, met the CM of West Bengal, and told the press: “We need to be more caring so far as emergency is concerned. When it comes to treatment of patients we need to improve the quality of care.”

The second incident culminated on 05 June 2017 when 6 doctors of Artemis hospital Gurgaon were booked for medical negligence, because Mrs. Rajni Makkar (48) who had been operated on twice, died in August 2016, after being on a ventilator for 45 days. The list included the three treating doctors, the CEO, Medical Director and Medical Superintendent of the hospital. The police had sent the medical documents to Haryana’s most well-known medical institute: PGIMS Rohtak. A case was filed in nearest police station under 304 A of IPC (causing death by negligence), based on the recommendation of PGIMS doctors.

What stands out about both these incidents is that the top medical and administrative authorities were not spared when it came to death of patients and allegations are made pertaining to negligence or lack of appropriate treatment. The top management cannot absolve themselves by saying that consultants are left to treat patients in the way that they deem fit, or that the consultants are not on the payroll of the hospital.

Reality Check

It may be noted that most private hospitals have contracts with consultants on a “fee for services” basis, wherein the Consultant only gets paid for services rendered. These include seeing patients in OPD, ward visits made, and payment for surgeries or procedures. The Consultant is not on the payroll of the hospital. To make matters more complicated, some hospitals do not have laid down charges for surgeries or procedures, and Consultants have the “freedom” to charge what they can, often after talking to patients/relatives. While all hospitals discourage this, the system exists, due to the dependence of hospitals on Consultants to “bring cases”. However, even when these “Visiting Consultants” get involved in medical negligence cases, the top management of the hospital is held responsible, and may be indicted, or even placed in custody.

There is a dangerous tendency to avoid admitting and treating extremely critical cases like bad road traffic injuries with a component of head injury, due to fears of violence, litigation etc.

This makes the whole field of hospital administration very risky and stressful, and youngsters do not opt for a career in hospital administration. They prefer to go for “softer options” like joining one of the “Big Four” companies: Deloitte & Touche, PwC, Ernst & Young, and KPMG.

Price Cap

All administrators agree that patients are deriving huge benefits by the new prices, which are 70- 80 per cent lower than the earlier prices and the transparency rules (like displaying stent prices) are welcome. While some hospitals have passed on the full benefit to the patients, others have not. Some hospitals have tried to compensate by increasing other charges like Cath lab charges and fees of cardiologist in order to recoup the major losses.

The Cath Lab story

Many administrators pointed out that running a Cath Lab is extremely expensive, and the annual maintenance contract (AMC) of a Cath lab is above Rs 35 lacs per annum. Salaries of staff such as Cath Lab technicians and specially trained nursing staff have to be paid at par. A large inventory of drugs, guide wires, balloons and stents has to be maintained.

Besides many large hospitals have “full timers” in Cardiology, and their “minimum assured amount” is always in excess of Rs 5-6 lacs per month. While patients should (and often do) get the full benefit of the reduced stent prices, hospitals also need to make the two ends meet and avoid losses. In this scenario, the availability of centers that can run a Cath Lab service will reduce drastically and the service will not be as easily accessible as it is today.

On-the-other hand

There are daily news reports about certain high-end stents being withdrawn from the Indian market, due to the capping of prices, and this is a major cause of concern. Stents come in a wide variety of shapes and sizes, and there is no “one size fits all” concept. Hospitals and patients need a wide range of stents to meet the needs of different blockages. If the best stents are no longer available in Indian hospitals, patients will be forced to go abroad for Angioplasty. While this may solve the problem for those who can afford it, it does not address the issue of Primary Angioplasty in Myocardial Infarction (PAMI). If a patient reaches on time, emergency Angioplasty (PAMI) is done within 90 minutes of onset of heart attack, and the blood supply is restored before the heart muscle (myocardium) dies. Many hospitals offer this facility, with teams being available 24/7, but the withdrawal of best stents will obviously impact this treatment modality.

A few days ago, media reports stated: “Due to low commercial sales, Abbott will stop selling the first-generation Absorb Bioresorbable Vascular Scaffold.” On 13 September, an article in Economic Times stated: “the US firm (Abbott) has also moved an application to NPPA to withdraw its metallic drug-eluting stent ‘XIENCE Alpine’ from India…”  All agree that this will result in more stent companies withdrawing their best stents from India. Is this fair to the public? Are there any restrictions on other very high priced items like cars, watches, jewelry, etc.?

The Ministry of Health needs to find ways to ensure that the highest quality stents are available in India.

Capping the price of procedures

There are discussions going on about capping prices of hospital procedures, and insurance companies have been leading the way. Hospitals in Pune are in a cold war with GIPSA companies since 01 April 2017, and people with Insurance policies of GIPSA companies are facing huge problems. Hospitals state that the rates being quoted are far too low, and the GIPSA companies are refusing to relent. This stale mate has lasted for almost six months, and no resolution is in sight.

Concerns of Specialists

Is there any capping on prices charged by professionals like Chartered Accounts, Lawyers, Architects etc.? Super-specialist doctors have to go through a minimum of 11-12 years of rigorous academic training. This includes 5.5 years of MBBS + Internship, 3 years for basic degree specialty, and 3 more years of super-specialty training. At each level, the student/doctor must pass through very tough competitive exams. Even after these years, which include sleepless nights of duties combined with studies, a super-specialist doctor keeps learning new techniques, keeps abreast of latest developments in his field through journals, and attends conferences (often abroad).


  • Do any of the other non-medical professionals go through all this?
  • Does anyone attack a lawyer if he loses a case in court?
  • Does anyone raise objections when top lawyers charge Rs 10 lacs for a single appearance in court?


The changing medical scenario in India, coupled with the Government’s tough stance on regulation, is discouraging many youngsters from entering the medical field, as a career option. To make matters worse, doctors are also actively discouraging their children from following in their footsteps. This will only lead to shortage of doctors in a country that is already plagued by low doctor patient ratio.

Another concern

The last issue is about court rulings on discharging patients who don’t clear their bills, and allowing relatives to take dead bodies from hospitals without paying the bills. Although it would seem “inhuman” and “cruel”, (language used by the Courts) to insist on payment of bills before discharging a patient who has availed of treatment, or releasing a body, one needs to look at the other side of the story.

All administrators I spoke to stated that they are releasing dead bodies without insisting on clearance of bills. Now should the hospitals insist on pre-payment for the patients, because patients and relatives are abusing the rules to stop making payments if the patient becomes very critical? This non-payment of bills affects hospitals very adversely, because the bills are used for payment to vendors who supply medicines (like expensive antibiotics), consultants (who may be visiting and not on payroll), apart from salaries of nurses, technicians etc, and utilities. This is a significant loss for the hospital, because the amounts are always in excess of a few lacs. As the word spreads, people may resort to this tactic more and more often.

Is this fair? Can hotels or airlines be asked to not take payment of bills if the passenger or traveller does not want to pay? It is unthinkable!

While all hospitals have systems in place to collect interim bill payments, relatives are always informed about outstanding bills. Yet they refuse to pay, knowing that the courts will support them. Should the hospitals then stop taking in critically ill patients?

In conclusion, all progressive and patient friendly measures are welcome, and are an important component of development for any country. However, for healthcare delivery two of the stake-holders are the hospitals and the doctors, and their inputs seems to be drowned by vote-bank policies. The Indian Medical Association (IMA) was on the streets of Kolkata and Bangalore, in response to such regulation and government policies. It is my considered opinion (based on interactions with administrators, doctors and students) that the entire field of medicine and health administration is gradually becoming more and more unpopular as a career option. For any country, this is sad, but for a country like India, it is all the more so. We need to look for a solution.

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