Delhi government proposes 50% profit cap on medicines at private hospitals

Once advisory is notified, private hospitals flouting it will face punitive measures.

Delhi Health Minister Satyendra Kumar Jain announces a price capping policy for private hospitals, at a press conference at Delhi Sachivalaya on May 28, 2018.

The private hospitals in Delhi should be allowed only up to a 50% profit margin over the procurement price of medicines and other consumables, the Delhi government proposed on Monday.

At a press conference, Delhi Health Minister Satyendar Jain announced that the government would put a draft advisory in the public domain for 30 days, seeking comments and objections. After that, it would notify the advisory and amend the Delhi Nursing Homes Act in order to introduce punitive measures, including cancellation of licence, against those who don’t follow it.

Mr. Jain said that in December 2017, the government formed a nine-member committee to look into “complaints of overcharging” and other issues at private hospitals and the panel's report recommended various measures, which comprise the advisory.

The draft advisory said hospitals and nursing homes would have to cap their markups on medicines and consumables that are not in the National List of Essential Medicines at 50% of the procurement prices or charge the maximum retail price, whichever was lowest. For implants, the cap proposed was 35%.

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‘Dignity of the dead’

The government also proposed a 50% waiver on the total bill if a patient died within six hours of admission to a hospital’s emergency or casualty wards. Similarly, if a patient died within 24 hours of admission, then 20% of the bill should be proposed, the draft advisory said.

Hospitals would not be allowed to refuse releasing a deceased patient’s body if the bill had not been paid. Mr. Jain said this was to ensure the “dignity of the dead”.

The government proposed increased transparency for the packages sold by hospitals. In case a patient required additional procedures after being admitted for one surgery, the second surgery should have a 50% discount, the draft proposed.