Corporate Hospitals in the US Point to the Path India Shouldn't Be Taking

Unfortunately, the Indian healthcare system is following the American model at the moment.

India’s private healthcare sector, led by big corporate hospitals, is currently at loggerheads with the government vis-à-vis the latter’s new health insurance scheme, Ayushman Bharat. The bone of contention is the amount of reimbursement, which the private hospitals consider to be too low. The government, unable to take care of the masses through public hospitals, wants private hospitals to bear the brunt. It’s an opportune time to examine not the conflict between the government and the private hospitals, but the faults of the corporate healthcare setup that the new scheme unquestionably provides legitimacy to. And the best lessons, unsurprisingly, come from the US.

The drawbacks of the corporate model

Walmart, the quintessentially American and undeniably distasteful big-box store, is everywhere in the US. Well, almost everywhere. Many iconic cities like New York and San Francisco have successfully fought over the years to keep it out. Others, unfortunately, have succumbed to the lure of cheaper deals and the promise of lots of jobs.

Key concerns have been raised about Walmart by protesters, the most critical being miserable employment conditions and poor benefits and pay. Moreover, there have been studies that show that the small, family-run, so-called mom-and-pop shops can’t compete with such giant businesses. Hence small entrepreneurs are forced to become low-level employees. And the neighbourhoods lose character and become homogenised.

Something not very dissimilar to this Walmart versus mom-and-pop shop tussle is happening in the healthcare industry across the US. Private practices are shutting doors and are being replaced by hospital-based practices. According to the American Medical Association (AMA), 2016 marked the first year when a majority of US physicians did not own a practice. Since that data came out, the number of physicians in private practice is significantly dwindling further. There are several reasons for this. Medical care is significantly better reimbursed, by the government and private insurances, if delivered in a hospital-based practice when compared to a physician-owned setup. There are also other reasons, such as the inability to keep up with insurance agencies and the increasing oversight of regulatory agencies. The mom-and-pop shop owning doctors are becoming employees, and some are even suffering poor employment conditions. There is a hope in a section of the medical community that doctors will be able to survive by unionising eventually.

As far as the patient is concerned, hospital-based care is more expensive.

Lessons for India

Unfortunately, the Indian healthcare system is following the American model. Corporate-run big private hospitals are slowly becoming the primary care providers. The small clinics and privately owned practices in India could be decimated in the coming years if the current trend continues. The once ubiquitous general practitioner down the street will disappear soon at this rate.

Hospital-based care has distinct advantages, with the easy availability of multidisciplinary care, especially in case of complex patients and complications. Compared to small clinics and private nursing homes, a large corporate-run hospital represents a more controlled setting. The latter is perhaps also better maintained and more hygienic. However, its biggest drawback is higher cost which a developing country like India cannot afford.

So what can India do to prevent its doctors from becoming victims of corporatisation and shield the consumers from skyrocketing costs of care in the hospital setting?

First, India needs to regulate the regulatory agencies which are sprouting up in recent years. While regulatory agencies help improve care, excessive oversight leads to higher cost and a balance must be maintained. Second, very large corporate hospital chains have to be discouraged. Small physician-led corporations are a better alternative to avoid concentration of power. Third, a model that allows small clinics and private practices to collaborate with hospitals while maintaining the independence of the former has to be actively promoted. Finally, India needs to adopt the single-payer system for all its citizens which will deal directly with small-time practitioners for reimbursement. A plethora of private insurance agencies will eventually make it impossible for the independent practitioner to navigate the arduous path to reimbursement. The single-payer system will also help monitor and control cost.

Jay Desai is a neurologist.