Findings of study can help patients demand greater transparency on prices

The first ever study of the actual costs of common surgical procedures in hospitals in India has shown a wide and often inexplicable range. Though the hospitals did not share with the researchers what they charged patients, the findings could become the basis for patients to demand greater transparency on why they pay the prices they do.

Researchers Susmita Chatterjee of the Public Health Foundation of India (PHFI), Carol Levin of the Department of Global Health at the University of Washington, Seattle, and Ramanan Laxminarayan of PHFI, Center for Disease Dynamics and Princeton University looked at five representative Indian hospitals for a study published in the open-access peer-reviewed journals PLOS ONE and BMJ Open.

Methodology

The study looked at a 57-bed urban charitable hospital, a 200-bed urban private hospital, a 400-bed semi-urban district hospital, a 655-bed rural private teaching hospital and a 778-bed urban tertiary care teaching hospital, two of them in the north and three in the south, between March 2010 and 2011. The researchers identified 13 common surgical procedures including caesarean, appendectomy, hysterectomy, coronary bypass and amputation, and calculated how much it cost each type of hospital to conduct each procedure on average.

They found that the costs ranged from Rs. 40,000 in the charitable hospital to Rs. 2,500 in the district hospital per caesarean and from Rs. 58,000 in the charitable hospital to Rs. 4,000 in the district hospital for a hysterectomy. “We found that despite having state-of-the-art facilities, the charity hospital had low bed occupancy and was conducting very few procedures in the year, which made each procedure then far more expensive,” Dr. Chatterjee, lead author, told The Hindu.

Case load

The tertiary care hospital had the highest case load (average 1,045 visits per day), and the charitable hospital, the lowest (84). As a result, the charitable hospital’s operating costs for gynaecological procedures were Rs 1.3 crore in the year but it conducted only 319 such procedures, while the private teaching hospital’s costs were Rs 1.2 crore for 2,055 procedures.

Outpatient visit costs ranged from Rs. 94 (district hospital) to Rs. 2,213 (private hospital), while inpatient stay cost was Rs. 345 in the private teaching hospital, Rs. 394 in the district hospital, Rs. 614 in the tertiary care hospital, Rs. 1,959 in the charitable hospital and Rs. 6,996 in the private hospital. Human resource cost was the main component of the total operating cost for the government hospitals, but the materials cost became the main component for all other hospitals when land cost was excluded.

“Ours is a preliminary study and as far as we know, the first of its kind. If a larger study is done, patients can use the findings to question why they are paying a certain amount at a particular type of hospital,” Dr. Chatterjee said.

“There is tremendous variation in the cost of procedures in different hospitals. Some of this is on account of relatively rational reasons like location, experience and qualifications,” said Abhay Shukla, public health expert and coordinator of the Mumbai-based SATHI (Support for Advocacy and Training to Health Initiatives). “But even after you discount for this, there are massive differences that are just not rational. It’s a sellers’ market and there is massive information asymmetry and power asymmetry,” Dr. Shukla said. Both asymmetries could be addressed by the state though standardisation and regulation carried out by a public agency, as well as patient advocates and counsellors, he added.