Analysts say some of Delhi government proposals may hit a legal stalemate as they may not fit in well with the Delhi Nursing Homes Registration Nursing Act, 1953 until unless it is suitably amended and even expressed doubts whether it will get nod of Lieutenant Governor.
Private hospitals and nursing homes operating out of Delhi have expressed concerns over the state government's proposals aimed at restricting alleged profiteering and reduce healthcare costs to patients.
A top executive of a leading hospital chain with a large presence in Delhi said private hopsitals may have to "shut shop" if these proposals are implemented.
The executive also added that some of the proposals are contradictory and may not withstand the scrutiny of courts.
"On one hand the proposals say private hospital can't refuse treatment for patient brought into hospital, on the other hand it says hospitals have to waive off 50 percent of the bill in case the patient dies in six hours - ," the executive said on condition of anonymity.
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The executive sounded confident the ambiguous proposals will be struck down by courts.
Two major listed hospital chains Max Healthcare and Fortis Healthcare who have large presence in Delhi declined to comment for the story.
“Most private players are making loses or single digit returns which don’t even cover the cost of capital. Some of the recommendations may adversely impact patient care and quality,” Hindustan Times reported quoting Max Healthcare authorities on Thursday.
"The Delhi government is also coming up with new regulations—cap on gross profit of hospital players, among other restrictions. Max is most vulnerable to these as it is maximum exposed among peers to the Delhi market," said Edelweiss Research said in its post earning report on Max India - the parent of Max Healthcare.
Delhi is the hub of healthcare in North India, housing thousands of private hospitals and nursing homes along with reputed public hospitals such as All India Institute of Medical Sciences (AIIMS), Safdurjung Hospital, Dr. Ram Manohar Lohia Hospital among others.
The Delhi government led by Aam Aadmi Party (AAP) early this week released a draft proposing several regulatory measures to restrict private hospitals and nursing homes from charging mark up prices of non-NLEM medicines and consumables beyond 50 percent from their procurement price.
NLEM refers to National List of Essential Medicines, the prices of which are capped by the Union government under Drug Price Control Order (DPCO).
The proposals of Delhi government also included capping the mark-up of implants to 35 percent and setting up of a sub-committee for capping the prices of investigations charged by private hospitals.
The Delhi government proposals say hospitals shall not refuse treatment to the injured or serious patients brought to them due to any reason whatsoever and no dead body can be detained in the hospital for want of non-payment of dues.
Some of the stringent proposals include to waive off 50 percent of the bill in case the patient dies in six hours and 20 percent in case of death within 24 hours.
Delhi government sought public comments on the draft withing next 30 days, before it gives final shape to the bill.
The Indian drug price regulator - the National Pharmaceutical Pricing Authority (NPPA) in February sought bills from four hospitals in Delhi NCR region and found out the marked up retail prices of certain medicines were up as much as 12-fold from the rates at which they were purchased. NPPA said it couldn't take action as regulating hospitals is beyond its purview and it's time for the government to act.
The latest proposals of Delhi government comes even as the Union government and its policy think tank Niti Aayog are contemplating measures to cap trade margins of drugs and devices.
To be sure Delhi government has taken a lead in public delivery of healthcare through Mohalla (neighborhood) Clinics, free medicines, free diagnosis and treatment for critical surgeries.
Delhi chief minister Arvind Kejriwal called the proposed regulation as “revolutionary”.
“When implemented, it will immensely help people especially middle class. It will substantially reduce healthcare costs and stop exploitation,” Kejriwal said.
But will these proposals see the light of the day?
Analysts say some of Delhi government proposals may hit a legal stalemate as they may not fit in well with the Delhi Nursing Homes Registration Nursing Act, 1953 until unless it is comprehensively overhauled and even expressed doubts whether it will get nod of state's Lieutenant Governor.
Delhi Nursing Homes Registration Nursing Act was designed to provide for registration and cancellation of nursing homes and hospitals in Delhi.
Even Delhi Chief Minister Kejriwal doesn't sound confident."This kind of reform requires a statutory mandate, which could come through substantial modifications to the Delhi Nursing Homes Registration Act 1953, the Act under which these measures are sought to be brought into force," said Campaign for Dignified and Affordable Healthcare, a forum of families of patients and civil society demanding reforms to ensure ethical treatment of patients and regulation of the private healthcare sector.
"Failing that, an entirely new Act would be required in order to accommodate the measures proposed. In the absence of such legal cover, we are afraid the Delhi government's good intentions will be of little or no avail.
The forum also warned Delhi government of the evident difficulty in passing legislation due to the Centre's drive to frustrate any initiative of the state government, it appears to have had no choice other than to go through a route which is unlikely to succeed.
"We would like to sound a note of caution on the legal instrument, namely the Delhi Nursing Homes Registration Nursing Act 1953 sought to be used to pass these measures. It will most likely end up as a matter of legal dispute and impasse," said the All India Drugs Action network (AIDAN), a group of healthcare-focused NGOs.
"AIDAN would like to suggest that a better legal instrumentality would be the Clinical Establishments Act (CEA). Building on the positive provisions of the Central CEA Act and modifying it after considering also some state-level versions would be an important step that can be initiated towards standardization of quality and costs of care in Delhi, one that is also on firmer legal footing,"
AIDAN welcomed the Delhi government proposals.