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Medical bills likely to rise

K.V. Prasad
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Private healthcare sector to be hit by service tax

Hospitals may pass on burden of tax to patientsSharp rise in price of drugs very likely, to hit patients
Hospitals may pass on burden of tax to patientsSharp rise in price of drugs very likely, to hit patients

The private healthcare sector will be severely hit by the 5 per cent Service Tax on hospitals that have 25 or more beds and also centralised air-conditioner.

“Under the healthcare component, the Union Budget begins on a deceptive note by declaring a Service Tax exemption, but it is only for hospitals with less than 25 beds and with no centralised air-conditioner,” State president of the Indian Medial Association L.P. Thangavelu said.

“This proposal is puzzling. A large section of the private healthcare sector will have to shell out more money on consumables because of the rise in the Central Excise Duty and Service Tax. Ultimately, there is the risk of hospitals passing the burden on to the patients,” he said.

The pharmacy sector would see a sharp rise in prices of drugs and the victims will, once again, be patients.

The Government should not have done so, especially when the nation's healthcare commitment was met largely by the private sector.

The increased allocation for National Rural Health Mission and the proposal for a National Urban Health Mission for the urban poor are good moves.

“We also welcome the announcement of Excise Duty reduction for cancer and HIV drugs. But, this is not enough. Cancer patients need other supportive drugs also. So do HIV patients. The prices of these too have to be reduced,” Dr. Thangavelu said.

While welcoming the Excise Duty exemption for six life-saving drugs, Dr. Thangavel pointed out that there were more number of life-saving drugs that needed to be made more affordable for various sections of people.

“So, why grant exemption only for these drugs,” he asked.

Dr. Thangavelu commended the proposal for new vaccine producing units (including one in Chennai) and modernisation of existing ones in order to ensure vaccine security.

Overall, the budget failed to meet the requirements of the public health sector. “The allocation has been increased from Rs.24,000 crore to Rs.26,760 crore. The increase is only proportionate to the rise in the overall budget outlay. Therefore, it is not a good increase in real terms. It is, actually, negligible.”

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