Clipped from: https://www.thehindubusinessline.com/opinion/editorial/editorial-unhealthy-trends/article70007930.ece
State-level health regulators should protect patient interests
There is no reason why India’s healthcare sector should function without a sector regulator | Photo Credit: SewcreamStudio
Long simmering hostilities between health insurance companies and hospitals have escalated into a full-blown standoff in recent weeks. The Association of Healthcare Providers of India (AHPI), representing over 20,000 hospitals, issued a sudden advisory that it would suspend cashless treatment for patients signed up with specific private insurers from September 1, citing issues with bill settlement.
It also accused general insurers of ‘cartelising’ in trying to introduce an empanelment framework where the General Insurance Council would set acceptable tariffs for common treatments. Later dialogue has led to the AHPI revoking its suspension, but patients continue to complain of cashless claims being rejected. This issue requires urgent policy intervention. In its long list of complaints, AHPI has claimed that the reimbursement rates set by insurers for treatments and implants have remained static for years. It has also said that insurers delay pre-approvals, dispute necessary procedures and prolong bill settlement at discharge, leading to blocked beds and frustrated patients. On the second part, AHPI does have a point. Insurers do subject patients to inordinate delays and nitpick the course of treatment — which should be the doctor’s domain. The insurance regulator needs to penalise insurers for non-compliance with its mandated turnaround times on processing.
However, insurers may be justified in refusing to accept bills at face value. Hospitals liberally pad up patient bills on consultation and consumables and recommend needless diagnostics and procedures. As patients have very little expertise in scrutinising hospital bills, it is desirable that insurers take on this responsibility. Claims that hospital margins are being squeezed by unviable tariffs also stand on thin ground. Cost of rooms, diagnostics and treatment have spiralled without check since Covid. The lack of any standard protocols or tariff benchmarks is also the reason why even government-backed schemes such as Ayushman Bharat have failed to protect common folk from being bankrupted by health emergencies.
Overall, there is no reason why India’s healthcare sector should function without a sector regulator, when far less critical industries such as mutual funds, stock broking and insurance, are regulated. Given that public health is a State subject, the Centre can perhaps propose a model law to be adopted by States, with each State appointing a regulator on the lines of the Real Estate Regulatory Authority. These healthcare regulators must be empowered to adjudicate disputes between hospitals, insurers and patients, and provide redressal for patients aggrieved by healthcare providers. They must engage with healthcare providers and insurers to arrive at reasonable rates for common treatments and procedures. Regulatory curbs on pricing may be against textbook free-market principles. But a patient who admits herself for treatment is hardly in a mental or physical condition to fight for her interests.
Published on September 3, 2025
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