COVID-19 has swamped the world with unprecedented challenges. In spite of mankind’s most advanced scientific as well as technological resources to our disposal, the novel coronavirus has crippled our systems, leading to a global health crisis and the subsequent economic downfall. The clinicians across the globe are still grappling with the absence of answers, making it extremely difficult to confidently recommend a treatment protocol, especially for patients with co-morbidities.
India’s COVID count has been increasing despite tremendous efforts made by the Centre and the State governments at policy as well as strategic levels. While the healthcare providers are still evaluating various combination therapies based on limited data and varying researches from across the globe, the uncertainty involved in COVID-19 treatment and response is leading to various other challenges.
This uncertainty has also amplified the trust deficit between the providers and government, providers and insurers as well as with the public at large. While the government believes that the private sector should shoulder the responsibility to treat the COVID patients – whether it is through COVID dedicated hospitals or individual cases coming to private facilities, there has been lack of clarity on the handing over processes as well as the pricing criteria.
There is an imperative need to acknowledge that COVID treatment costs cannot be rationalised based on the existing reimbursement criteria, essentially due to the unknown nature of treatment required and various co-morbidities associated with it. Research based on the previous Severe Acute Respiratory Syndrome (SARS) epidemic in 2003 has also shown that there is a great deal of variability in individual infectiousness. Additionally, segregating the COVID and non-COVID patients is essential for a private hospital, which needs huge investments in infrastructure within the facility.
Non-viable reimbursement rates are only adding to the challenges of the private healthcare system – which has been dealing with the triple financial burden viz. pre-COVID constrained financial performance; increased investments due to COVID-19 as well as sharp drop in out-patient footfalls, diagnostic testing, elective surgeries and international patients across the sector. With the acute shortage of experienced doctors and other allied health workers, the relatively higher salary needed to attract and retain healthcare workers is another significant expense for the hospitals thus resulting in a bigger financial crisis. There is also a reluctance amongst the insurance providers to cover healthcare workers for COVID-19, which puts an additional financial burden on the hospitals, when any healthcare worker gets infected.
While there is a need to understand the various reasons of high cost of treatment for the disease, it is also important that a rational consensus is established between the government, healthcare providers and insurers. FICCI, through its hospital members, had submitted an accounting methodology, for all government referred patients, which has been benchmarked to existing CGHS rates and has been sub-categorised to three levels:
- Patients who do not require intensive care but must be kept in isolation
- Patients requiring intensive care but are not ventilated
- Patients requiring intensive care and ventilator support
This model was prepared by the clinical teams of accredited hospitals consisting of intensivists, pulmonologists, critical care specialists as well as infectious disease specialists. It is important that the government considers and adopts a scientific, plausible and coherent reimbursement criterion, that is viable for the providers as well as the private insurance companies.
This also upholds the need for Universal Health Coverage for the country. While Ayushman Bharat-PMJAY currently ensures healthcare support to the poor and vulnerable section, the package rates have been unviable for the already financially fragile private hospitals.
It is important to recognize that developing and maintaining hospitals is a capital-intensive affair and therefore, managing costs, achieving profitability and justifiable growth are crucial for any hospital venture to be successful. Hospitals face number of challenges as they are exposed to greater risk as compared to other industries, owing to complexity of operations, ensuring appropriate quality of care coupled with humanitarian and ethical issues in providing healthcare.
What we need is a rationalised reimbursement tariff that defines differential rates for stratified provider groups. This should be coupled with optimal payment models that orient away from fee-for-service (FFS) to reimbursement mechanisms that incentivise quality, efficiency and clinical outcomes.
FICCI has been advocating adoption of a scientific costing framework to derive rational reimbursement rates. To present evidence, in 2018, FICCI conducted a sample costing study based on Time Driven Activity Based Costing (TDABC), an internationally recognised bottoms-up costing approach for estimating costs of processes used in patient care, which was submitted to the government.
The author is Co-Chair, FICCI Health Services Committee & CEO, P D Hinduja Hospital & Medical Research Center.