No more ‘misery tax’

ONE proposal in the Union Budget for 2011-12 which had attracted sharp all-round criticism was the 5 per cent service tax on diagnostic tests and treatment in air-conditioned private hospitals with more than 25 beds. Displaying commendable sensitivity to public feelings, Finance Minister Pranab Mukherjee has rightly agreed to roll back the proposal that would have fetched a Rs 700-crore annual revenue for the exchequer. It is amazing that a seasoned and pragmatic political leader like Mr Mukherjee has to be told that an air-conditioned hospital is no longer a luxury but a necessity, that the National Accreditation Board for Hospitals does not grant accreditation unless a hospital has central air-conditioning and that poor villagers have to mortgage their assets to get treatment during an emergency since government hospitals are often crowded and mismanaged.

Had the tax not been axed, a heart surgery would have cost Rs 5,000 to Rs 10,000 more and for cancer patients the cost of treatment would have escalated by Rs 20,000. Hospitals would have passed the tax burden on to patients. Calling it the “misery tax”, Dr Devi Shetty, a Bangalore-based cardiologist, had led a protest by citizens outside the Governor’s residence and observed March 12 as the “Misery Day”.

There may be hospitals making hefty profits, tempting finance ministers to grab a slice of these but healthcare in India needs large government and private investment. There is an acute shortage of staff and infrastructure. Government doctors prescribe medicines which patients buy from private shops. There is a risk of getting expired or spurious medicines. Since the cost of treatment is multiplying rapidly, health insurance must cover larger sections of society. Private insurance firms are growing fast and, like private hospitals, tend to indulge in questionable practices. To discipline the health sector, there is need for a regulatory authority. Even as private hospitals flourish, the government cannot abdicate its responsibility of providing access to efficient and affordable healthcare to ordinary citizens.