Who Owns Our Hospitals?

December 30, 2018

By – Prakash Satyavageeswaran
(Indian Institute of Management Udaipur)

Dr. Neeraj Nagpal, Convenor,Medicos  Legal  Action  Group, talks about the slow death of the neighborhood hospitals due to increasing corporatization in the sector. Standards set by the government, he points out, make it difficult for individual doctors or even small hospitals to comply and operate. This favors the large corporate hospitals.

However, the new trend in the recent months seem to indicate that the Indian corporate hospitals are also being taken over by foreign entities. Dr. Nagpal points to the merger of Radiant Life and Max Healthcare, Fortis  shares  sale  to  IHH  Healthcare  Behrard, and Manipal – Temasek-TPG  Capital  combine  takeover  of  Medanta. In addition, Prof. DVR Seshadri at ISB points to the majority holding of Dubai based Abraaj group in Care Hospitals and the investments of Parkway Pantai in Continental Hospitals.

The high standards set for hospitals is making it increasingly difficult for small standalone hospitals to operate. This can create a vacuum in the much needed affordable care segment in rural areas where such hospitals are shutting down. Mr. Nagarajan D, consultant with expertise in the medical industry, suggests that a rapid rethink is necessary to ensure that there is support and encouragement for small hospitals and large single doctor clinics, especially given the lack of facilities in most parts of rural India.

The new trend of foreign investors picking up controlling stakes in large corporate hospitals is a worrying trend. There is a need to discuss what this means for affordable healthcare in India. Whose interests would be uppermost in the minds of the investors; that of the patients or the shareholders who are looking to maximize returns?

One response to “Who Owns Our Hospitals?”

  1. Avatar for ARNAZ DALAL Thulasiraj Ravilla says:

    The question to ponder over is about the emerging “high” standards and regulations around it. Are the makers of such standards, driven by a manipulative thought process of excluding other providers or to truly enhance patient safety and outcomes. I raise this because this is not an uncommon strategy.

    A related but a different example… In every Govt. Hospital that engages in drafting tenders for procurement, there will be a specialist who (for whatever reason) would put in a specification which would qualify only a specific manufacturer. In one instance it was the height to which the slit-lamp table an be raised to (the differences were in the order of a couple of mm).

    Today pretty much all standards are around “inputs” (staffing, building layout, etc.) and processes. The major concerns are..
    1. Very little or no focus on outcomes or the association between so called “high” standards around inputs and the outcomes.
    2. The whole thought process around “standards and regulations” is only around what is done (errors in commission) and nothing on what doesn’t get done by adopting these standards and regulations” (errors of omission).

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