Private hospitals in India are overcharging for safety gear in the absence of government regulation

Saima Furqan’s 60-year-old uncle was admitted to Sir Ganga Ram Hospital in Delhi with Covid-19 in April. After 30 days in the private hospital, the family was given a 122-page bill and charged Rs 16,14,596. What struck Furqan in the bill is that the family was charged a flat rate of Rs 10,000 per day for the personal protective equipment, commonly known as PPE, worn by medical staff treating her uncle. The family paid Rs 2.9 lakh for PPE alone, which is 18% of their total bill.

“We struggled with this bill,” said Furqan, a public health professional based in Delhi. “My uncle used to work as a driver before he retired and since his retirement, he has tried to run a small trading business but it has not been very successful,”

A surgeon at Sir Ganga Ram Hospital explained how PPE is used in the hospital: “In the ICU, one requires level-3 PPE for all the nursing staff, ICU residents, consultants, specialists coming in for referrals, wardboys and so on,” he told IndiaSpend. Moreover, he said, due to a shortage of medical staff – many having contracted Covid-19 themselves – specialist doctors and others had to go in and out of Covid-19 wards, necessitating frequent changes of PPE.

Furqan’s uncle had also undergone a tracheotomy, an aerosol-generating procedure, with a high risk to medical staff, he pointed out. “I don’t know the per-unit price for PPE,” said the surgeon, who did not want to be identified. “But it should be around Rs 1,500 to Rs 2,000...And these are disposables that have to be discarded once you come out of the ICU.”

Differences across hospitals

Bills analysed by IndiaSpend reveal significant variations in how patients are being charged for the use of PPE in hospitals. Some hospitals appear to be using fewer PPE kits per patient than others, or charging less per kit than their peers, leading to lower PPE costs for patients.

In the first part of this investigation, IndiaSpend had reported that the controversially high prices charged by private hospitals in India have been further distorted by the Covid-19 pandemic, and the central government and courts have stepped in to regulate some prices, but not others. PPE is in the unregulated category.

Take the case of a 74-year-old Mumbai man who was admitted in April to the private Nanavati Hospital with pneumonia and Covid-19. He died 13 days later. The family received a bill of Rs 16,44,714.

Similar to what Furqan noticed in the bill from Sir Ganga Ram Hospital, this patient was charged a flat rate of Rs 8,900 per day for PPE, apart from other daily Covid-19-specific charges such as for biomedical waste disposal. There is no break up of how many units of PPE were used on this patient or the price per unit.

However, another Mumbai bill reads somewhat differently. An elderly husband and wife who both tested positive for Covid-19 were admitted in May 2020 to the private, charitable Karuna Hospital. Here, they were not billed a flat daily rate for PPE, but were billed for what the hospital said it had used. A minimum of two and a maximum of four PPE kits were used per day on these patients. Each PPE kit was billed to these patients at the price of Rs 1,500.

So for a four-day stay in the hospital, the 77-year-old man was charged Rs 3,750 per day for PPE and his 65-year-old wife was charged Rs 6,000 per day, based on the actual number of PPEs used on them.

Private players

PPE protects healthcare workers from being exposed to the SARS-CoV-2 virus and contracting Covid-19. PPE is needed and worn by not just doctors but also nurses, ward staff, cleaning staff, and many others involved in Covid-19 care. PPE includes different elements such as full-body suits as well as gloves, masks, goggles, face shields, respirators, shoe covers and head covers. A health worker will wear all of these elements, or just some, depending on what level of exposure the worker has to the SARS-CoV-2 virus. The Indian government has issued guidelines for the “rational use” of PPEs, focussing on what kind of PPE health workers should wear based on how much risk they could face.

In order to understand the anomalies in private sector billing for PPE, consider the price paid by the public sector in Tamil Nadu. In March, the government of Tamil Nadu was buying PPE kits at Rs 362 each – each including an N95 mask and a triple-layer mask – from suppliers.

With Rs 362 used as a basis for calculation, it would mean that if a hospital bills a patient Rs 10,000 per day for PPE – as in the case of Sir Ganga Ram Hospital – it is charging a patient for 27 PPE kits per day.

However, when hospitals are not transparent about the number of PPE units used on a patient and the per-unit cost of PPE, patients have no way of knowing how much PPE has been used for their care and at what rate they were billed. They cannot gauge if the government’s guidelines on the rational use of PPE are truly being followed.

The Federation of Indian Chambers of Commerce and Industry issued a press release on June 4 offering a “rational costing solution” for Covid-19 treatment at private hospitals. Their model says that up to three or four PPE kits are needed per patient per day, depending on whether the patient is in an isolation ward or an ICU.

Now, using Federation of Indian Chambers of Commerce and Industry’s estimate of the maximum number of PPE kits needed per patient per day as a point of reference, it would mean that a patient being billed a flat rate of Rs 10,000 per day for PPE may be paying Rs 2,500 per kit used on them.

The calculations based on these two reference points – the Tamil Nadu example and the Federation of Indian Chambers of Commerce and Industry model – indicate that the private sector is either billing patients a high price for each unit of PPE or using a large number of PPE kits on a single patient. Either way, patients are dealing with hefty bills with no clear understanding of what they are paying for.

Discrepancies in pricing

“I donated 170 PPE kits to Safdarjung Hospital in Delhi in April. I bought them for Rs 520 per kit,” said Jayant Singh, a data scientist with a pharmaceutical data analysis company based in the national capital. With a greater volume of PPE being produced, the same vendor was now able to sell him the kits at Rs 250 each, he added.

Singh told IndiaSpend he offered the authorities at the government-run Safdarjung Hospital the PPE kits after hearing about the shortages it was facing. According to him, Safdarjung Hospital administrators told him they were buying PPE kits for about Rs 1,200 each but were getting far fewer items in each kit than Singh’s supplier was able to provide.

Clearly, there is a wide variation between the price at which the Tamil Nadu government bought PPE kits – Rs 362, the price which Singh said he bought each kit for – Rs 520, and the price per unit that some private hospitals are charging patients, judging from the analysis of their bills.

“PPE is supposed to be used and billed for rationally. But it seems that private hospitals have found a way to make money out of patients, even during this pandemic,” said Singh, who has been demanding government regulation on private sector healthcare billing since 2017, the year his seven-year-old daughter died of dengue after treatment at Fortis Hospital. His family was billed over Rs 15 lakh for her treatment.

On the current controversies around PPE, he said: “The government should put out an assessment–how much PPE really needs to be used on patients? What should the charges be?”

The central government’s guidelines for the rational use of PPE explain that while some healthcare workers need just a mask and gloves, others, such as those in intensive care units or dealing with dead bodies, need full PPE. In the guidelines, healthcare workers, like ASHA workers, ambulance drivers, those who handle laundry from hospitals, nurses and doctors, have been put into various risk classifications like mild, low, moderate or high risk of contracting Covid-19.

But the guidelines do not say how many PPE kits should be used in order for that use to be “rational”, and what prices should be charged from patients for these kits.

Shortage in public sector

Another critical aspect of the PPE story in India is the contradiction between the private sector, apparently flush with PPE and charging patients as much as Rs 10,000 per day for it, and the public sector, which does not charge patients for PPE, but is struggling to meet requirements, in terms of both quantity and quality.

Over the last few months, there have been many reports of protests and complaints from healthcare workers in the public sector, about shortages and shoddy PPE kits.

On June 3, nurses at the All India Institute of Medical Sciences in Delhi, India’s foremost public sector hospital, organised a sit-in at the hospital to protest against their working conditions during the pandemic. News reports say that at least 300 healthcare workers at AIIMS have tested positive for Covid-19. Shortages and poor quality of PPE at AIIMS have also been highlighted in reports.

“We have written to many authorities during this pandemic about PPE,” said Ranjana Athavale, assistant general secretary of the Nursing and Paramedical Staff Union, Mumbai. “In the first few months, we struggled with shortages. Now there is more PPE available, but only in Covid wards of Brihanmumbai Municipal Corporation hospitals. In non-Covid areas, PPE is being given out only in a very restricted way.”

At press conferences during the Covid-19 pandemic, the health ministry representative has often said that there is no shortage of PPE in the country but has, however, asked hospitals to stop using PPE in an “irrational” manner.

On May 30, the central government said it had provided 9.6 million PPE units and 11.9 million N95 masks to states, union territories and central government institutes. On May 25, the government said more than 300,000 PPE coveralls and N95 masks were being made in the country daily. There were more than 300 PPE manufacturers in the country and nine labs where those who want to make PPE coveralls could send samples to, the government said.

Earlier, on April 8, the Supreme Court had passed an order asking the Union health ministry to ensure that PPE is made available to healthcare workers. Yet, something is amiss on the ground with the supply of PPE kits: Health workers in the private sector have not had to protest about the shortage or poor quality of PPE given to them, as public sector nurses and health workers have done.

Price regulation

In recent years, private healthcare in India has come under scrutiny over high charges. In 2017, the Union health ministry began a probe into the death of Jayant Singh’s daughter. The case triggered media pressure and activism and the government began investigating private healthcare billing practices.

The National Pharmaceutical Pricing Authority, India’s drug price regulator, also capped the prices of some medical devices such as cardiac stents and knee implants between 2017 and 2018. As a component of medical bills, PPE falls into the category of consumables and disposables. These are neither medicines nor medical devices but items used in large quantities during the treatment of a patient in a hospital, like gloves or syringes, and then discarded.

In 2018, an analysis by the National Pharmaceutical Pricing Authority estimated that the private sector was making profits of up to 1,737% on some consumables billed to patients. For example, a device used in intravenous lines was being bought by hospitals for as little as Rs 5.77 but sold to customers at Rs 106, a hike of 1,737%.

Drugs, diagnostics and devices constituted 56% of some private hospital bills analysed by the government. Room rates and the cost of procedures, which are the more visible aspects of a bill, were only 23% of these bills, as IndiaSpend had reported in March 2018.

The National Pharmaceutical Pricing Authority had said at the time that this analysis showed that private healthcare billing of some items was “exorbitant and clearly a case of unethical profiteering in a failed market system”.

During the ongoing Covid-19 pandemic in India, the government has capped the prices of some items needed by healthcare workers, such as hand sanitisers and surgical masks, as reported in part one of this investigation. However, N95 masks and PPE kits have not been brought under price regulation.

Bhupendra Singh, former chairperson of the National Pharmaceutical Pricing Authority, told IndiaSpend that the central government can regulate the prices of drugs and consumables like PPEs, sanitisers, gloves and masks. But since regulating private hospitals in states is the responsibility of state governments, they should use their respective clinical establishment laws to fix the prices of diagnostics and overall treatment in hospitals.

At a hearing in May 2020 on a petition demanding “cost related regulations” for treatment of Covid-19 patients in private/corporate hospitals, the Supreme Court asked why private hospitals that had received free land from governments to construct hospitals, should not be required to treat Covid-19 patients free of cost. The Centre, in its reply in June 2020, said it had no legal powers to ask private hospitals to give free treatment, and this matter was in the domain of states. The matter is still being heard in the Supreme Court.

This article first appeared on IndiaSpend, a data-driven and public-interest journalism non-profit.