Bengal’s Tight Leash On Private Hospitals Will Prove Counterproductive For Investment-Starved State

A two-day jamboree ambitiously titled Bengal Global Business Summit (BGBS) got underway in Kolkata Wednesday (20 April) with state Chief Minister Mamata Banerjee pitching her state as the most attractive investment destination in the country.

But the ground reality in Bengal is far removed from Banerjee’s high-pitched hardsell. And the latest experience of private hospitals in Bengal which have been kept on a tight leash by the state government is a prime example of why investors give the state the go-by.

Private hospitals in Bengal, which have to follow the diktats--often arbitrary and unjustified--of the West Bengal Clinical Establishment Regulatory Commission (WBCERC), are once again up in arms against the Commission.

This time, it is over the WBCERC’s capricious order barring private hospitals from revising their charges by more than 10 per cent. The 12-member commission, headed by a former Calcutta High Court judge and comprising bureaucrats and doctors reportedly close to the ruling party, had barred private hospitals from raising charges for the past two years due to the pandemic.

The Commission, in an order issued Monday (18 April), also imposed other restrictions on hospitals which, say physicians and hospital administrators, make no sense. For instance, the WBCERC has ordered that hospitals cannot charge patients separately for routine procedures like fixing Ryle’s tube, cannula, central line catheter and arterial and these should be included in bed charges.

But, say hospital administrators, a lot of patients, including those that are in critical care units, don’t require these procedures and adding them to bed charges means the patients will have to pay for the procedures they don’t require.

The Association of Hospitals of Eastern India (AHEI) has decided to appeal to the Commission to review its advisories and remove the 10 per cent cap on raising charges. That’s because costs of all inputs, as well as doctors’ fees and salaries of staff, have gone up over the last two years.

“While fixed and other costs have gone up exponentially, all hospitals have incurred huge losses due to the pandemic. It may not be very viable to operate if charges are not raised beyond 10 per cent. This restriction needs to be removed,” CEO of a private hospital who did not want to be named told Swarajya.

Though all private hospitals are annoyed over the WBCERC’s latest advisories, they are not willing to go on record with their objections or are wary of voicing their objections individually since they fear a backlash from the state government which has often acted in a vindictive manner.

The Commission has often imposed stiff penalties on private hospitals, something that many hospital administrators term “arbitrary” and “unjustified”. The Commission was set up in 2017 in what many term as a ‘populist’ act by Banerjee after a spate of allegations of medical negligence and of inflated and arbitrary fees demanded by private hospitals.

Since then, the Commission has functioned as a ‘big brother’ and even a ‘bully’ to private hospitals, often issuing orders which private hospitals find injudicious. But the private hospitals have been scared of complaining loudly and publicly against the WBCERC’s ‘unreasonable’ acts out of fear of retribution by a vindictive state government.

Chief Minister Banerjee has also forced private hospitals of the state to treat patients under her populist Swasthya Sathi health insurance scheme at a fraction of the hospitals’ usual rates. Most hospitals have been incurring considerable losses in treating beneficiaries of the state government’s health scheme and despite many representations, the rates for treatment of beneficiaries of the Swasthya Sathi scheme have not been rationalised.

But the bigger and more important point is that the Bengal government’s leash on private hospitals is not only an anti-free market move, but also amounts to the government running away from its own responsibilities and obligations and expecting the private sector to do its work.

The reason people, including the very poor, in Bengal flock to private hospitals is because government hospitals are in a pathetic state. Government hospitals lack dedicated doctors and para-medical staff as well as equipment and medicines, are dens of touts, are often very filthy and patients cannot expect even basic treatment there.

This is why people of Bengal go to private hospitals. And the populist Mamata Banerjee wants private hospitals to offer treatment at the same rates as government hospitals, which is next to impossible.

Instead of improving the conditions of government hospitals and ensuring that patients there get the treatment they deserve, the Bengal government has been wanting private for-profit hospitals to do this job.

A populist Chief Minister who shirks her responsibility of improving healthcare delivery in government hospitals is not allowing market forces to prevail. And that is why Bengal remains an unattractive state for private investments not only in healthcare, but other sectors as well.

Jamborees like the Bengal Global Business Summit where a lot of public money is spent and where investment proposals worth thousands of crores of rupees are announced--it is a different matter that very few of these proposals actually fructify--will serve no purpose till the state government understands some basic rules of doing business.

Investors and investments are driven by profit and if unreasonable restrictions or demands (as in Bengal) are imposed on their operations by the state government or politicians and officials, the state will continue to remain an investment-unfriendly province.

Also Read: This Company’s Terrible Experience In Bengal Indicates Why Investors Continue To Shun The State