Why Clinical Establishment Act remains on paper at large?

Earlier this week K Sujatha Rao, former Union Health Secretary narrated a experience about her sister who was hospitalised in an upmarket corporate hospital in Hyderabad diagnosed with sleep apnea and suspected pulmonary hypertension.

"My sisters 3 day hospital bill in a little known corporate hospital shows Over billing by 100%. 1 thyroxin tablet that costs Re 1 has been billed as Rs 120!  CT Scan is 20,000!," Rao tweeted.

Rao questioned in the same tweet on why "govt.refuses to enforce the CEA (Clinical Establishment Act) and wants to partner with such unethical partners."

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Telangana is yet to implement Central government's Clinical Establishment Act, and Hyderabad is one of India's largest hub of private healthcare .

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Just last month Indian drug price regulator — the National Pharmaceutical Pricing Agency (NPPA) has reviewed the bills of four major private hospitals in Delhi, followed by several cases of overpricing of medical bills, and found hospitals have been making profits up to 1737 percent on drugs, consumables, medical devices and diagnostics.

One of they bill they studied was related to Fortis hospital which was earlier embroiled in a controversy in December last year over the high prices they charged the family of a seven-year-old girl who was suffering from dengue.

Fortis have billed the family nearly Rs 16 lakh. The child finally succumbed to the disease.

Incidentally Delhi and Haryana that forms the bulk of National Capital Region too haven't implemented  Clinical Establishment Act. Delhi has the highest number of registered clinical establishments for any city in the country.

Only 10 states and six Union territories have implemented the Central Clinical Establishment Act.

The states that have implemented included Sikkim, Mizoram, Himachal Pradesh, Arunachal Pradesh, Bihar, Uttar Pradesh, Uttarakhand, Assam, Jharkhand, and Rajasthan, while UTs comprised Puducherry, Chandigarh, Dadra and Nagar Haveli, Daman and Diu, Lakshadweep, Andaman and Nicobar Islands.

The list excludes some of the large states such Maharashtra, West Bengal, Gujarat and all South Indian states where large chunk of country's healthcare infrastructure is located.

To be sure - states which are not part of the Central's Clinical Establishment Act have there own state specific Clinical Establishment Acts like for example West Bengal, Telangana and Karnataka, among others. Some like Maharastra are in the process of formulating their own clinical establishment act.

Also let's not assume that everything is fair and transparent in states that have implemented the Act.

So what is Clinical Establishment Act and why is it important?

The Central government enacted the Clinical Establishments (Registration and Regulation) Act in 2010 with an aim to ensure the delivery of a minimum standard of services by clinical establishments across India.

Under this all types of clinical establishments that include hospitals, clincs, and diagnostic centres, with exception of those run by the armed forces, fall within the ambit of this Act.

The need for such a legislative act was sparked off by wide variation in healthcare delivery across providers, resulting not only in compromised patient safety but also concerns about transparency and accountability in healthcare costs.

The Act seeks to ensure that the operative functioning of healthcare delivery systems in states is in compliance with prescribed, transparent guidelines and keep any form of regulatory malpractices in check be it related to drug pricing, licensing provisions or procurement, for instance.

In case of any discrepancy, the law allows patients or their kin to lodge complaints upon which action will be taken against the establishment.

The penalty for contravention ranges from Rs 10,000 for the first offence, which goes up for every subsequent offence, to a maximum of Rs 5 lakh. Willful disobedience or withholding of information can attract a fine of a maximum of Rs 5 lakh. The provisions apply to government departments too.

The Act also talks about maintaining data or electronic medical records related to patients.

The Centre has been urging all the states and union territories to adopt and implement the Clinical Establishment Act that aims to bring a uniform regulation across the country, against a bunch of conflicting state specific regulations.

Why most states unwilling to adopt Centre Clinical Establishment Act

Though most states accept in principle about adopting Clinical Establishment Act but they drag feet when it comes to implementing it for several reasons.

One - healthcare is a state subject and states are not ready to give up their authority on framing laws  and second -  the pressure from private healthcare providers - who deliver the bulk of the healthcare and are politically influential .

The push back from private healthcare is so enormous that Karnataka government has to pass a watered down changes to Karnataka Private Medical Establishments Act, 2007 that aims to regulate private sector health practice. Karnataka government removed its original proposal to include jail terms of upto three years for establishments and doctors for medical negligence.

What are thorny issues for private healthcare ​providers about Clinical Establishment Act?

As part of Clinical Establishment Act - most of the states will have prescribe rates of procedures and services. But healthcare economists say - the "one size fits all" pricing approach not be as simple as it sounds.

"There is no reference point that defines a fair price," said Rao in an opinion published on Scroll.

"Comparison with government hospitals is problematic as several cost components are subsidised, such as land or building. In the absence of a price range based on acceptable methodology, the cost of, say, a CT scan can vary from hospital to hospital and be dependent on factors like utilisation levels, source of financing such as an interest bearing loan as opposed to a donation, and so on. Likewise, how does one price a specialist’s consultation in an imperfect market?," Rao questions.

Rao urges governments to urgently pay attention on bringing in reforms, protocols and systems for price fixation.

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