The delicate balancing of health-care costs

Access, innovation, and affordability need to be kept in mind while shaping equitable and sustainable health-care policies

Published - June 04, 2024 12:50 am IST

‘Imposing one-size-fits-all price caps could severely undermine health-care quality’

‘Imposing one-size-fits-all price caps could severely undermine health-care quality’ | Photo Credit: Getty Images

As we navigate the dynamic landscape of Indian health care, cost considerations are increasingly influencing every aspect of service delivery and patient care. With rising health disparities and uneven access to medical services, the need for equitable and sustainable health-care policies has never been more urgent than now. Ongoing discussions about setting rates for medical services are not just bureaucratic exercises. They fundamentally shape how we perceive, access, and deliver health care across India. In this globalised era, we see a variety of responses to similar challenges worldwide, shaped by differing cultural, economic, and systemic factors. By learning from these international examples, we can refine our strategies to manage health-care costs more effectively.

Private hospitals are not only centres of specialised care but also innovation hubs. Take the examples of the Joint Commission International (JCI) and NABH (National Accreditation Board for Hospitals)-accredited big hospital groups, which have embraced cutting-edge technologies to significantly enhance patient outcomes, especially in complex procedures. These institutions invest heavily in top-tier infrastructure and advanced technologies, enabling them to seamlessly integrate telemedicine and remote care, thus broadening access and building patient trust.

Price caps, quality and innovation

As the Supreme Court deliberates on standardising medical procedure rates across government and private sectors, we must consider the allure of affordability. Yet, imposing one-size-fits-all price caps could severely undermine health-care quality. A Health Care Management Review study shows that hospitals under financial pressure from price caps report a 15% increase in patient dissatisfaction. Moreover, such caps could drastically slow the development of new treatments and technologies, notably in fields such as cancer research and robotic surgery, where significant investment is crucial. Could value-based pricing be our solution, where payments reflect health outcomes rather than service volume?

The broader economic implications of health-care pricing policies reach far beyond the health-care sector itself. Properly implemented rate standardisation can alleviate health-care disparities, yet we must be cautious not to destabilise providers’ economic health. Economists recommend dynamic pricing models that adjust based on medical complexity and the financial status of patients, offering a fair solution. For instance, Thailand’s tiered pricing system, which considers patient-income levels and medical necessity, successfully balances cost and care and could serve as a model for India’s diverse economic landscape.

Legal and regulatory challenges

Managing health-care costs effectively demands legislative reform. Tailoring approaches to accommodate local demographic and economic conditions can support rate standardisation and high-quality care. States such as Rajasthan and Tamil Nadu have already pointed out gaps in rate fixation provisions, advocating for robust legal frameworks to navigate these issues successfully.

Technology is revolutionising health care, making diagnostics faster and more accurate with artificial intelligence and improving care coordination through electronic health records. For example, telemedicine initiatives in Karnataka have slashed hospital visits by 40%, demonstrating how technology not only makes medical care more accessible, especially in remote areas, but also more cost-effective. This integration reduces pressure on health-care facilities while delivering timely care directly to patients’ homes.

Moreover, innovations such as mobile health apps and wearable devices are crucial in managing chronic conditions outside hospitals, significantly cutting costs and enhancing patient outcomes. As we push these technologies forward, ensuring that they reach all population segments is key. Investing in infrastructure for broader Internet access and improving digital literacy will empower more people to benefit from these advancements, setting the stage for India to lead globally in health-care innovation.

Recent surveys with health-care professionals across India show a consensus on the need for flexible pricing strategies that mirror the complexities of medical procedures and patient-care requirements. Engaging all stakeholders, including private health-care providers, is essential in order to grasp the nuanced dynamics and craft effective, sustainable policies.

Role of data in shaping policies

In today’s big data era, health-care policy decisions should increasingly rely on data-driven insights. Data analytics can shed light on patient outcomes, treatment efficacy, and cost-efficiency, informing more nuanced rate-setting frameworks. Moreover, predictive analytics could foresee the long-term impacts of rate fixation on health-care innovations, helping policymakers adjust regulations to encourage innovation and accessibility.

Balancing access, innovation, and affordability in health care is delicate but imperative. We recommend implementing pilot projects in select districts to gauge the impact of rate caps on health-care quality and innovation, allocating government subsidies to support research and development in private hospitals, and establishing public-private partnerships to integrate cutting-edge technologies in public hospitals, ensuring widespread access to advanced health-care solutions.

As India aspires to be a global health-care leader, fostering an environment conducive to innovation while ensuring equitable access to quality health care is crucial. It is time to prioritise the well-being of every individual, as echoed by Dr. Vinod K. Paul, Member, NITI Aayog. “Affordable healthcare is not just a necessity but a priority for our nation, and we are committed to innovating and leveraging technology to bring down healthcare costs for every citizen.”

Dr. K. Madan Gopal is Adviser, Public Health Administration, National Health Systems Resource Centre, Ministry of Health and Family Welfare, Government of India. The views expressed are personal

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