Private hospitals in India fear ‘armageddon’ if costs are standardised

India’s top court, responding to a public interest litigation filed by an NGO, has given the government a month to fix standard rates for different medical procedures.

Private healthcare heads now fear an ‘armageddon’ if rates similar to Central Government Health Scheme (CGHS) are mandated to be applied to procedures in private hospitals.

Viren Shetty, Executive Vice Chairman at Narayana Health, said: “The difference between CGHS and private hospital rates can range from 20% to 60%. Applying CGHS rates to all services would be an ‘Armageddon’ for private healthcare.”

India’s Supreme Court has raised its concern over the wide variation in medical treatment costs between government and private healthcare facilities. It has asserted that citizens of India have a fundamental right to healthcare, and the centre cannot evade its responsibility in ensuring this right.

The court highlighted the stark contrast in prices, citing an example of cataract surgery, which costs around ₹10,000 in a government hospital but can range from ₹30,000 to ₹1,40,000 in a private facility. This is despite healthcare costs in India being considerably lower than in other parts of the world.

Underlining the industry caters to people across the spectrum, Shetty of Narayana Health said there was a need to evaluate rates amid rising healthcare costs.

Bino Pathiparampil from Elara Securities also feels all listed private hospitals are likely to be impacted if this mandate is followed. “Everything cannot be priced at the same level when it comes to healthcare,” Pathiparampil told CNBC-TV18.