SDG3: Loopholes in NITI Aayog’s PPP Model for commercialization of district government hospitals in India

Niti Aayog claims to have accommodated ‘international best practices, and similar PPP arrangements that are operative in the states of Gujarat and Karnataka’ but it seems the think tank ignored the crucial provisions of a model right under its nose - Free EWS Beds Scheme in Private Hospitals of Delhi. These provisions were introduced through a decade long legal battle after the private hospitals, reportedly in connivance with authorities, refused to provide free health facilities to poor patients. The difference is that Delhi authorities had only provided land to private partners, the NITI Aayog is asking the authorities throughout the country to provide them fully operational district hospitals for commercialization for period of minimum 60 years.

National Institution for Transforming India (NITI) Aayog has prepared a draft ‘Concession Agreement’ for handing over the district hospitals throughout the country to private medical colleges for commercial operation on lease for a minimum 60 years’ period. The think tank of the Central Government has invited suggestions by January 10 which will follow a consultation of stakeholders on January 21 to finalize the document.

An analysis of the bulky 248-page document shows that the draft is more focused on theoretical and technical aspects but seems least concerned with the problems of implementation on the ground. As no references are provided in the document, it is difficult to ascertain which ‘international best practices’ are being referred to but the draft seems to have learnt no lessons from problems faced in implementation of a similar scheme in Delhi -  Free EWS Beds Scheme in Private Hospitals.  

It is pertinent to mention that the intervention of Delhi High Court was sought through a Public Interest Litigation (PIL) in 2002 after all the authorities in Delhi including the office of the Lieutenant Governor (LG) failed to make the private hospitals to provide free treatment to the poor patients which was a condition in their land agreement. These hospitals were allotted lands at prime locations in Delhi on the pretext of providing free health facilities to poor patients but later on refused to entertain such patients on very funny reasons such as ‘free bed in a hospital means free bed but not the free consumables' (medicines, syringes etc.). Interestingly, on the basis of such funny grounds the private hospitals had challenged the decision of the Delhi High Court in the Supreme Court in 2007 but were flayed there. Furthermore, even after direct monitoring by the Delhi High Court, they have innovated several mechanisms to maximize their profits by compromising the interests of fee patients. 

The draft ‘Concession Agreement’ of Niti Aayog would have been better, if they had learnt some lessons from existing EWS Beds Scheme in Delhi. In brief some loopholes of the draft could be highlighted as under:

Who is a Free Patient?

The draft leaves it on local authorities to decide who is free patient and who is not. These authorities have been asked to issue authorization certificates for free patients. This was a major loophole in the original scheme of Delhi which was misused as a ground by private hospitals in Delhi to turn away poor patients. In its decision 2007, the Delhi High Court allowed three certificates under Fee EWS Beds Scheme in private hospitals – BPL Card, Income Certificate issued by the competent authority, Self-Declaration Certificate and authorization certificate by the State government. However, several private hospitals in Delhi demand residence proof from poor patients but they buckle if pressurized by local MLAs, government officials or media. However, the word EWS is used in the document but only in reference to the reservation of seats for students in the private medical colleges.

Will free patients get free consumables?

This issue had been a bone of contention in Delhi for over two decades. Even after the order of the Delhi High Court, several hospitals in Delhi refused to provide consumables. These hospitals argued that free bed means ‘free bed and free consultancy’ but not the free consumables. The issue was so contentious that the incumbent Delhi government decided to construct a dispensary outside a private hospital to provide consumables to free patients. The draft of NITI Aayog does not include the term ' free consumables’ for free patients. Thus they have committed the same mistake in 2020 which was done by Delhi authorities between 1970s to 1990s. 

Will ICU Beds be equipped with Ventilators or not?

In yet another mechanism to dodge authorities, the private hospitals in Delhi have divided their ICU beds into two categories – With Ventilator (WV) and Without Ventilator (WWV). They provide only 10 percent of total free ICU beds with ventilators. For example, if a hospital has 600 beds, it provides 60 beds (10 percent) under free bed category out of these 60 beds six beds (10 percent) are marked for ICU out which only one bed will be equipped with ventilator. Thus they avoid admitting serious patients and increase their profits. 

The NITI Aayog draft is silent on this issue. If private partners are liable to provide free services what is the logic behind charging Rs 10 from each patient? In its judgement, the Delhi High Court had said ‘free means free’.  

What if private hospital utilizes ‘regulated beds’ as 'market beds'?

In case of Delhi, the Delhi High Court had ordered the private hospitals to pay to the public partner (government authorities) for utilizing the free beds as market beds. Several private hospitals in Delhi are facing court cases for dues amounting to about Rs 600 crore for utilizing free beds for paid patients. Niti Aayog has not provided any mechanism to deal with such situations.

Insurance Scheme

This is another benefit for private partners. If the free bed patient is covered under any insurance scheme of the government such as Ayushman Bharat etc., private partner will be paid. As the government is planning to provide Ayushman Bharat card to every poor of the country, who will be real beneficiary for 60 years of commercialization of district hospital/s.

Market Rate @ 12 months

The rising medical expenditure has made the life of middle class very tough. However, the think tank of the country has proposed to squeeze middle class as much as they could.  As per the proposal the market rates will be charges from non-free category patients with a provision of upward revision on every 12 months.

No logical explanation for 300 + 20 percent

It looks good, it private partners can but the draft does not provide any logical explanation for its calculation of minimum 300 + 20 percent free beds. An example has also been cited for this calculation of an imaginary hospital having 900 beds. The number of free beds in such a hospital will be 300 + 120 (20 percent of 900-300) i.e. 420 beds.

This calculation raises a doubt because in Delhi initially private hospitals had promised 70 percent free beds to get land on prime locations. When it came to implementation, they refused to implement even 10 percent freed beds citing huge financial losses. What if the private hospitals promise moon and start crying after getting possession? Despite provision in agreement, authorities in Delhi could never take over management of any hospital. Besides, the provision of providing rights of ‘other commercial activities’ is also liable to be misused by private partners. 

Draft motivated by compulsion not the vision

In reality, the very preamble of the draft lacks a vision. The argument ‘practically not possible for the Central/ State governments to bridge the gaps in the medical education with their limited resources and finances’ highlights the highest level of compulsion as the only motivation behind this initiative. 

NITI Aayog needs to seriously consider the view that it is going to decide the fate of over 700 operational district hospitals in the country which is a huge asset amounting to thousands of crores. The experts in the think tank needs to be driven with vision not the compulsion. They should realize that they have been entrusted to shape the health sector of India for almost all the years remaining with 21st Century. Furthermore, the document would provide a foundation to 'Good Health and Well Being' in India which has been adopted as SDG3 (Sustainable Development Goal) by the United Nations. 

(Disclaimer: The opinions expressed are the personal views of the author. The facts and opinions appearing in the article do not reflect the views of Devdiscourse and Devdiscourse does not claim any responsibility for the same.)