In the ongoing saga of judicial interventions in policymaking in India, the recent development involves the Supreme Court’s intervention in setting the rates for medical services charged by hospitals across the nation.
Legal Examination:
The Supreme Court heard a public interest litigation (PIL) filed by the NGO ‘Veterans Forum for Transparency in Public Life’ regarding rising healthcare costs and disparities in treatment costs between public and private hospitals. The Court directed the Union Government to establish price bands for medical procedures and treatments offered by hospitals or face imposing the rates charged under the Central Government Health Scheme (CGHS) as an interim measure. However, this move may defy both legal and economic logic.
The PIL relies on a specific rule that mandates hospitals to display their service rates and charge according to government-notified price bands. However, the Clinical Establishments Act, 2010, does not primarily aim to provide affordable healthcare but rather to regulate clinical establishments’ standards. Furthermore, the Act’s applicability across states remains unclear, given India’s federal structure.
Instead of questioning the validity of the rule itself, the Court threatened to enforce CGHS rates, which could be unjustifiable and coercive. Such a move overlooks the Act’s limitations and sidesteps the legal principle that delegated legislation must not exceed the parent statute’s boundaries.
Economic Counterpoint:
In the context of India’s healthcare system, imposing price caps may exacerbate existing issues, particularly in rural areas with limited access to healthcare facilities. Price controls could discourage new hospital establishments, worsen shortages, and compromise service quality.
Past evidence suggests that price controls often lead to unintended consequences, including hospitals finding ways to circumvent them or providing subpar services. Digital solutions and improved public health infrastructure offer more effective long-term solutions to address healthcare disparities.
Conclusion:
While the healthcare situation in India is concerning, solutions lie in investing in public health infrastructure and improving government-run facilities rather than resorting to price controls. The Court and Union Government should carefully consider the long-term implications of their interventions and explore more sustainable approaches to address healthcare challenges.
