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User Charges Onslaught on Public Health Services

Healthcare as a public good should be available free of charge at the point of service delivery. This was the case across India until a flurry of reforms from the early 1990s onwards notified user charges for various health services in public health facilities. Since then, public expenditure on healthcare has seen a decline from a high of 1.5% of gross domestic product in the mid-1980s to a low of 0.7% of GDP in the mid-1990s, recovering to 1.2% of GDP presently. However, out-of-pocket healthcare expenditure has risen dramatically with increased user charges in public health facilities, which leads to further inequities.

At the end of 2017, the Maharashtra government issued a government resolution that from January 2018, user charges in public hospitals for various services will increase substantially, in order to cover the increased costs to hospitals due to goods and services tax (GST) and to finance better quality services and improved maintenance (Jadhav 2017). The government is misleading people. Yes, there is GST now, but it has only replaced excise and custom duties and sales taxes/VAT (value added tax), and service tax. Further, the Fourteenth Finance Commission substantially increased the share of states in national taxes in 2014. Considering this increased revenue inflow, is this recent hike in user charges by the government citing increased costs and deficits in resources justified? Also, patients seeking treatment in public hospitals primarily come from the bottom two quintiles, and hikes in user charges only increase the out-of-pocket (OOP) healthcare expenditure for the poor.

The government resolution issued on 20 November 2017 and the press note that followed a month later (Vernekar 2017) listed the increases proposed in medical college hospitals: registration fees is to double from ₹10 to ₹20; the cost of blood tests for dengue and malaria is to increase from ₹30 to ₹250; eye surgeries from ₹1,200 to ₹3,500; ECGs (electrocardiograms) from ₹30 to ₹70; sonography from ₹100 to ₹120–₹600; MRI (magnetic resonance imaging) from ₹1,600 to ₹2,000–₹3,000; and an overall hike in various types of diagnostic tests and surgeries, with prices ranging from ₹1,000 to ₹11,000, is expected.

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Updated On : 25th Jan, 2018

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