Indian Express
01 March 2011
By Anuradha Mascarenhas
Pune, India

With the central government‚s healthcare budget bringing centrally airconditioned hospitals in the service tax net, treatment care rates are bound to go up, say directors of various city hospitals.

George Eapen, CEO of Jehangir Hospital, said, "We have no choice but increase the treatment rates." Ruby Hall Clinic CEO Bomi Bhote said the service tax comes as an additional cost that will have to be passed on to patients. "We are not getting any benefit as the government does not give us any subsidy on power," said Eapen.

It‚s not an exciting budget as any hospital with more than 25 beds have been brought under the service tax net, says Dr Parag Sancheti, Chairman of the Sancheti orthopaedic hospital. While the saving grace is the increase in healthcare expenditure we hope there are better healthcare facilities now at government hospitals, he added.

Dr S P Singh, CEO of Aditya Birla hospital too admitted that bringing hospitals in the service net will have a detrimental effect on government healthcare providers, said Singh. Diagnostics and health check up too have been brought under the service tax net, he pointed out, which will raise the cost of treatment .

According to Dr Anant Phadke, coordinator of the Jan Arogya Abhiyan and a healthcare activist, the increase on healthcare in the budget is too small. In the Budget, overall central government‚s healthcare budget has increased by Rs. 4,589 crore (21%) inclusive of the budget for National Rural Health Mission (NRHM) by Rs. 2,230 crore (16%). However, as a proportion of the GDP, this increased allocation would hardly increase its proportion to GDP from the current value of 1.2 per cent.

The UPA had promised that the government healthcare expenditure would increase to 2-3 per cent GDP (compared to the WHO recommendation of 5 per cent). To achieve the target that the government healthcare expenditure would reach 2 per cent of GDP within 5 years, health expenditure must increase minimum by Rs. 10,000 crore every year. The increase of Rs. 4,589 crore is too small, he said.