Healthcare before Profits

On 8 January 2019, the Ministry of Health and Family Welfare (MoHFW), Government of India (GoI) issued a press statement titled, “Broad Guidelines for Private Investments in Setting Up of ­Hospitals in Tier 2 and Tier 3 Cities Sub­sequent to Pradhan Mantri Jan Arogya Yojana (PMJAY).” As per the statement, the objective of the guidelines is “to improve the supply of healthcare services in the underserved areas to ensure maximum utilis­ation of the benefits under the PMJAY and to improve the demand for quality healthcare services at affordable prices to ­general public.” The title erroneously states that these are guidelines for “Private Investments in setting up of Hospitals,” whereas in reality, they are for “public investments in setting up of private ­hospitals”!

According to the guidelines, the govern­ment will incentivise the private sector in these cities to set up private hospitals by providing them with land and funds, and facilitating clearances in Tier II and Tier III cities. The funding in the form of viability gap funding (VGF) will be up to 40% and in addition to VGF, the government will provide gap funding up to 50% of tax on capital cost. The only requirement of the hospital in lieu of such liberal support is that they would have to empanel under the PMJAY. Further, it states that the government will work ­towards the “restoration of the status of hospital as industry for getting benefit
of VGF.” This industry status not only brings along with it tax concessions, it also exempts them of any accountability in providing free healthcare to the poor, in lieu of the public funding, incentives and/or subsidies.