The delicate balancing of health-care costs

As we adapt to the dynamic landscape of healthcare in India, cost considerations are increasingly impacting all aspects of service delivery and patient care. With widening health disparities and unequal access to health services, the need for equitable and sustainable health policies has never been more urgent. The ongoing debate on pricing of health services is not just a bureaucratic exercise; it fundamentally shapes how healthcare is perceived, accessed, and delivered across India. In this globalized era, we are seeing different responses to similar challenges across the world, shaped by different cultural, economic, and systemic factors. Learning from these international examples can help us refine our strategies to manage healthcare costs more effectively.

Private hospitals are not only hubs of specialized care but also hubs of innovation. Take for example the large hospital groups accredited by the Joint Commission International (JCI) and NABH (National Accreditation Board for Hospitals). These hospital groups have adopted cutting-edge technologies to significantly improve patient outcomes, especially in complex procedures. These institutions have invested heavily in top-notch infrastructure and advanced technologies to enable seamless integration of telehealth and telemedicine, thereby expanding access and building patient trust.

Price Cap, Quality and Innovation

As the Supreme Court considers standardizing fees for government and private-sector medical procedures, we must consider the appeal of affordability. But imposing uniform price caps can seriously undermine the quality of care. A study by Health Care Management Review found that hospitals under financial pressure from price caps report a 15% increase in patient dissatisfaction. Moreover, such caps can significantly slow the development of new treatments and technologies, especially in areas such as cancer research and robotic surgery, where significant investment is essential. Could value-based pricing, which reflects health outcomes rather than volume of services, be the solution?

The broader economic impact of health care pricing policies goes far beyond the health care sector itself. Fee standardization, if done properly, can mitigate healthcare disparities, but care must be taken not to destabilize the financial health of healthcare providers. Economists recommend dynamic pricing models that adjust and provide fair solutions based on the complexity of care and the patient’s economic situation. For example, Thailand’s tiered pricing system, which takes into account a patient’s income level and medical need, successfully balances cost and care and could serve as a model for India’s diverse economic situation.

Legal and Regulatory Challenges

Legal reforms are needed to effectively manage healthcare costs. Tailoring the approach to local demographics and economic conditions will ensure standardisation of fees and quality care. States such as Rajasthan and Tamil Nadu have already pointed out the shortcomings of fee fixation provisions and have advocated for a stronger legal framework to navigate these issues.

Technology is revolutionizing healthcare, with artificial intelligence making diagnoses faster and more accurate and electronic medical records improving care coordination. For example, Karnataka’s telemedicine initiative has reduced hospital visits by 40%, proving that technology not only makes healthcare more accessible but also more cost-effective, especially in remote areas. This integration reduces the strain on healthcare facilities and provides timely care directly to patients’ homes.

Additionally, innovations such as mobile health apps and wearable devices are essential for managing chronic diseases outside of hospitals, significantly reducing costs and improving patient outcomes. As we advance these technologies, ensuring their reach across all demographics will be key. Investing in infrastructure for broader internet access and improving digital literacy will enable more people to benefit from these advancements, setting the stage for India to lead the world in healthcare innovation.

A recent survey of healthcare professionals across India found a consensus on the need for flexible pricing strategies that reflect the complexities of medical procedures and patient care requirements. Engagement of all stakeholders, including private healthcare providers, is essential to understand the nuanced trends and develop effective and sustainable policies.

The role of data in policy making

In today’s big data era, healthcare policy decisions must increasingly rely on data-driven insights. Data analytics can shed light on patient outcomes, treatment effectiveness, and cost-efficiency to inform more nuanced pricing frameworks. Moreover, predictive analytics can forecast the long-term impact of fee fixation on healthcare innovation, allowing policymakers to adjust regulations to foster innovation and accessibility.

Striking a balance between healthcare access, innovation and affordability is a delicate but essential task. We recommend conducting pilot projects in selected districts to measure the impact of fee caps on healthcare quality and innovation, allocating government subsidies to support research and development in private hospitals, and establishing public-private partnerships to integrate cutting-edge technologies in public hospitals to ensure widespread access to advanced healthcare solutions.

As India aspires to be a global healthcare leader, it is crucial to foster an environment that encourages innovation while ensuring equitable access to quality healthcare. As reiterated by Dr. Vinod K. Paul, Member, NITI Aayog, it is time to prioritise the wellbeing of every individual. “Affordable healthcare is not only a necessity for our country, it is also a priority. We are committed to leveraging innovation and technology to reduce the cost of healthcare for all our citizens.”

Dr K. Madan Gopal is Advisor, Department of Public Health, National Health Systems Resource Centre, Ministry of Health and Family Welfare, Government of India. The views expressed here are personal.