The healthcare juggernaut

Updated Aug 20 2018


PAKISTAN spends a total of three per cent of its gross domestic product (GDP) on health, nutrition and education, — according to a World Bank report released on April 17 — a figure which is significantly lower than most countries.

Unfortunately, healthcare has always been one of the most neglected sectors, with the country spending 0.5 to 0.8pc of its GDP on health for more than a decade; compare this to the World Health Organisation’s benchmark for health expenditure which is at least 6pc of the GDP.

With such a meagre allocation the government cannot afford to meet the health requirements even in public hospitals. Consequently, a large number of private hospitals have emerged in the country.

Healthcare services cannot be treated like other services where you go by choice and not by compulsion

A report prepared by the International Financial Corporation’s bank advisory services team in partnership with the State Bank of Pakistan gives a cluster-wise view of the locations of private-sector hospitals in Karachi and Lahore.

According to it, places such as Nazimabad and Gulshan-e-Iqbal alone have 100 and 80 hospitals, respectively. These hospitals are shamelessly fleecing patients through different hidden charges and unnecessary medical treatments.

The medicines prescribed to the patients are not only expensive but their prices grossly differ from hospital to hospital.

The situation is such that a lot of patients now prefer travelling to India for better treatment at a lower cost. According to a report, 15-20pc of all foreign tourists coming to India annually are Pakistanis.

If India starts issuing medical visas in three to four days as compared to the 40 days it takes for a tourist visa, the numbers of Pakistani patients will most likely increase. The government of India however, considers that the price patients are paying for medical services in private hospitals are still very high.

Therefore, a health policy has been drafted to rationalise the charges. Some of the salient features of the draft policy are as follows. Hospitals cannot charge more than 50pc of the proposed rates for a medical package, and they would have to disclose all treatments, medicines and investigations in their bill.

A high-risk package may be offered, which would be 20pc costlier than normal treatment packages. Hospitals will not be able to force patients to buy medicines from their pharmacies, and doctors would have to prescribe from the price-controlled National List of Essential Medicines, only charging the listed MRP or a maximum mark-up of 50pc of the purchase cost.

Furthermore, if a patient dies within six hours of being taken to the emergency room, 50pc of the treatment cost will be waived. It is pertinent to mention that healthcare services cannot be treated like other services such as beauty parlours, gyms, slimming centres, etc, where you go by choice and not by compulsion.

Doctors are supposed to decide the most appropriate treatment for their patients without exploiting them for financial gains. In the United States, several laws are in place to minimise fraud in the healthcare system.

For instance, the Anti-Kickback Statute makes it illegal for physicians to knowingly and wilfully accept bribes or other forms of remuneration in return for business. Criminal penalties for violation are fines of up to $25,000 and imprisonment for up to five years.

It is illegal for a physician to accept air tickets for a vacation from a pharmaceutical company in return for prescribing the company’s drugs — which is a common practice among physicians in Pakistan.

Another law called the Stark Law makes it illegal for physicians to refer patients to any entity with which they have a financial relationship, and physicians cannot send patients to a laboratory owned by them or a family member — another very common practice in Pakistan.

Laws are also in place to penalise poor healthcare delivery. Hospitals are not paid for treatment of infections which a patient may have acquired while there; similarly there is no remuneration for the care of patients readmitted with the same diagnosis within 30 days.

On the other hand, the bundle payment system allows insurance companies to pay hospitals a set number of dollars based on diagnosis. If a patient is admitted with pneumonia, the hospital will be paid a certain amount of dollars regardless of how long the patient stays in the hospital.

This approach has significantly reduced the length of stays in the hospital. While decisions have been taken to regulate hospitals and doctors in Pakistan, they unfortunately seem not to have been implemented.

A few years ago, Dr Fateh M Khan, former Director-General of Health Services, Sindh, pointed out, “There is a strict need for establishing an authority, through an act, to control private hospitals having 50 or more beds, to make them affordable for the common man.”

He also suggested that the charges of the hospital, including the charges of consultants, correlate with the services it provides. Moreover, in emergency cases there should be strict provision of first-aid treatment from the hospital’s side and medico-legal cover by the government of Sindh.

Published in Dawn, The Business and Finance Weekly, July 2nd, 2018