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Private Clinical Establishments in India: Above the Law?

By Sunil Nandraj
on June 3, 2015

In India you require a license for majority of things, including liquor shops, beauty parlours, pan beeda shops (petty shop usually selling cigarettes, chewable tobacco, paan and candies), handcart pullers and restaurants. Believe it or not, you do not require a license to run a hospital or diagnostic laboratory. This is not without consequence. In a country like India, where private sector provides 80 per cent of outpatient care, the lack of oversight on these providers could have literally grave consequences.

Despite tragic reports in media, there has been very little regulatory response for correcting this malaise.  A wide variety of unethical practices prevail in unregulated healthcare environments; this is not exclusive to India. Although corruption has been reported from most countries, its effects are particularly devastating in low- and middle-income countries. In India, several recent international and local journals and media have reported extensive bribery and kickbacks in the Indian health system. Dangerous practices that directly or indirectly affect healthcare delivery include unnecessary surgeries, admissions, medicines, referrals or diagnostic tests for kickbacks, refusal to admit accident and emergency patients, not releasing the deceased to next of kin without bribes, overcharging, demanding bribes for healthcare service delivery where it is otherwise free and non-transparency in fees and charges among others. In effect there is an “unhealthy” nexus between doctors and a variety of actors including diagnostic centres, laboratories, pharmaceutical companies and insurance agents. This malaise is deep rooted and perhaps understood superficially, and an even deeper crisis exists for those who suffer from disease and ailments. One critical reason for this is the unregulated, unaccountable and non- transparent functioning of the private health establishments in India. It is ironical that an area that deals with human lives is not regulated sufficiently and does not adequately protect patients’ interests and ensure quality.


Outdated, non-implementation and opposition

Unlike most “businesses” that need a license to operate, hospitals do not need such a license. In several Indian states including Assam, Goa, Gujarat, Kerala, and Tamil Nadu, there is an absence of adequate legislations to regulate private hospitals. In states where legislation exists they are outdated and enforcement is near absent. For example, the Bombay Nursing Homes Act dates back to 1949. In other states such as Andhra Pradesh, Maharashtra, Delhi, and Orissa where there is legislation, only hospitals practicing modern medicine are covered. Laboratories, diagnostic centres, government facilities, Ayurveda hospitals are not covered. As a result, minimum standards related to use of medical technology, qualification of personnel, treatment protocols, fee structures are sorely missing. This, in a nutshell has resulted in an explosion of private hospitals, laboratories and diagnostic centres with widely fluctuating standards of healthcare and in several instances with irrational and unethical practices.

The central government enacted a law – the clinical Establishments Act, (CEA) 2010 – to provide for registration and regulation of all medical establishments to ensure that they conform to basic minimum standards for facilities and services. Presently it is applicable in several Indian states, but not yet in all. The CEA covers all public and private establishments from all recognized systems of medicine; it covers facilities ranging from single doctor clinics, laboratories, and diagnostic centres to all types and kinds of large corporate hospitals. A process of registration of these establishments is in place and available in the public domain making them transparent and accountable to the people. Further they are mandated to provide information and statistics to the authorities, which could be used to detect and control outbreaks and epidemics.

The CEA is comprehensive and far-reaching, yet its implementation has been limited. The implementation of the CEA has been slow also because of the federal nature of several sectors including health; many states have not notified the registration bodies and councils and framed rules required under the CEA. While state judiciary has stepped in to force governments to implement the law in some states, in others doctors’ associations’ opposition has stalled it. Doctors and other interests groups however have generally thwarted the implementation of the law across the country. Take for example the common problem of private hospitals not admitting accident victims. Despite a Supreme Court ruling in 1989 making it obligatory for private doctors and hospitals to provide care in accident and emergencies, few private hospitals comply with this. Indeed, doctors who refuse to treat accident victims go against the Hippocratic oath. Another aspect facing opposition is in transparency and fixing of rates and charges for various procedures. This has led to various financial irregularities in the medical sector with high costs of health being borne by those in distress. Efforts to bring in regulation in favour of improving healthcare quality and transparency are facing stiff opposition from various doctors associations.  Many states are keen to adopt the CEA or enact suitable legislation; however doctors and their associations are opposing it on various grounds often closely safeguarding and privileging the interests of their profession at the cost of participating in an equitable healthcare system


The road ahead

Regulation of private providers assumes significance in the context of governments engaging with them under public private partnerships, government-funded health insurance schemes and contracting out of services. In the absence of regulation, it is a recipe for fraud, increases costs and fails to provide standard and quality care. It is imperative for states not having legislations, adopt the central act and those with legislations to modify or adopt the central act and enforce its provisions. India’s ambitious plans for national health assurance to its people would be stymied in absence of appropriate laws and stronger regulation. An area, which deals with the lives of people, cannot be left to remain non-transparent, unregulated and unaccountable to the people.

About Sunil Nandraj

Sunil Nandraj is a social scientist by education, a health activist by passion, and a full time student of the health sector. He has been involved in various aspects of India’s health sector and has assisted in drafting the Clinical Establishment Act and rules. He is presently advisor to the union Ministry of Health and Family Welfare on the CEA. The views expressed in this blog are his own.

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