Mission or Money?

Even with the advent of corporate governance, most trust hospitals are still struggling to strike a balance between Money and Mission, report Jayata Sharma and Nancy Singh

Whether being in a legal soup over ownership, incurring huge losses or the courts pointing to the yawning gap between promises of charity and the reality—in all instances trust hospitals are in the line of fire. Rising costs and competition add to their woes. Corporate groups taking over trust hospitals is not new. Amidst all this, trust hospital managements are struggling not to lose sight of their objective.

Managing Costs

When it comes to money, the challenge to maintain expenses just gets bigger. Undoubtedly, every hospital wants to get the latest technology, but a significant deterrent is the heavy price tag. Dr George Chandy, Director, CMC, Vellore recalls how in the 1980s, the Hospital wanted to buy a high-end CT scanner, but could not afford it. "Hence, we decided to import a second grade machine which had already been rejected. It came in bits and pieces and we had trouble handling it. Hence, we must make judicious decisions."

Trust hospitals provide healthcare at 20-30 per cent lower cost than corporates and hence find it more difficult to run effectively and efficiently. Also, as common people expect the treatment cost in trust/not-for-profit hospitals to be low, it becomes tricky to increase price, although the cost of overheads keeps increasing with rising inflation.

Tightening Government Noose

Trust hospitals complain about lack of government help and strict government regulations, which have resulted in more corporate and fewer charitable trust hospitals. Besides diminishing spend on GDP in healthcare over the years and increased patient flow in trust hospitals, recently the Maharashtra State Electricity Board has increased the electricity tariff by 70 per cent, which will significantly impact Mumbai-based trust hospitals. "As our functioning cost was increasing, we were forced to think about increasing the cost of treatment, after maintaining the same price for the past six years. Although we were deliberating upon increase in treatment cost for quite some time, the rise in electricity cost played the role of a catalyst, and now the price increase by 20 per cent will happen soon," says Maj Gen Vijay Krishna, CEO, Breach Candy Hospital, Mumbai. He also adds that ultimately it is the patients who suffer, and the Government must keep this in mind before cutting off trust hospitals from certain benefits.

In the Line of Fire

Apart from the routine issues and problems to tackle, trust hospitals are also struggling to answer question raised about their mission of charity.

The Legal Weapon

"The hard fact is that though the hospitals are benefiting from corporate governance, many are indeed losing the main purpose for which the hospital was started—serving the needy. I feel they are all misusing the benefits given by the Government and are just ignoring the poor. Where will the poor go?" asks Justice H Suresh, former Judge, Bombay High Court. The recent judgment given by the Delhi High Court (writ petition number-2866/2002 passed on 22/03/2007) supports this view.

Dr Parmajit Bawa, Hospital Management Consultant and medico-legal expert, explains, "The HC noticed that many of these hospitals have fully complied with the condition of free patient treatment as per percentage provided under the letters of allotment and even otherwise. The HC, however, finds that the hospitals on the behest of promising charity take a piece of land at nominal price compared to the market rate, enjoy the benefits but do not provide care for the needy. In this context, the HC has ordered that all hospitals have to give 30 per cent free medical treatment, be it a corporate group or not-for-profit hospital."

Every person who has no income or has income below Rs 5,000 per month shall be treated under this category to begin with, unless the committee constituted vide this judgment changes the criteria for minimum income.

Under the scheme, 25 per cent treatment is reserved for OPD and 10 per cent reserved for IPD. The hospital is liable to provide free admission, bed, medication, treatment, surgery, nursing, and consumables and non-consumables to such patients.

Mission Lost

The next most common allegation is that trust hospitals lose sight of their mission. "There are two kinds of trust hospitals. The first is the mission hospitals or those run by NGOs located in rural areas, which provide low cost and/or free care. The other kind are historically trust hospitals but have got corporatised and charge higher than market rates and do not provide any free care or care to the poor. The latter have transformed into money-making machines and they even reach out globally via medical tourism," alleges health activist Ravi Duggal.

Hospitals lose their mission more for practical reasons than moral ones, say analysts. In these times of high costs, the trusts indeed find it difficult to depend on external sources for funds and have to find ways and means to self-sustain.

The Delhi Case

Twenty hospitals in New Delhi were issued legal notices, out of which 18 had been allotted land by Delhi Development Authority (DDA), while in the case of Veerawali and Vimhans Hospitals, land was allotted by the Land Development Officer (DO) at lower-than-market rates. For the latter as well as 16 of the 18 others, the condition of free patient treatment in relation to free beds as well as OPD was specifically incorporated.

Vimhans Hospital had clearly stated before the HC that they were trying their best to implement the condition of free patient treatment. However, that had posed great difficulties and they had run in huge losses. An affidavit was also filed on their behalf on February 22, 2007, stating that they have been providing treatment to more poor patients than the recommendations made in Justice Qureshi Committee Report, and they had made a representation to the Ministry of Urban Development for reduction of terms of free treatment from 70 per cent and 30 per cent, to 10 per cent and 20 per cent respectively with regards to free IPD and free OPD treatment.

No Direction

Some experts feel trust hospitals are facing crises more due to lack of leadership or direction. Also, the founder of a hospital may have an idea which may lose its way in the years to come. For example, says Dr Chandy, "A hospital in Kerala, based in a village called Kanzaga was started by a timber merchant. With the intention of serving God, he set up a hospital managed by a good team of doctors. It was running extremely well, but after his death the son took over and he wanted to run the set-up in his own way. This did not go well with the doctors who ultimately left and the hospital lost its purpose and mission."

Most experts do agree that while all may not be well with trust-based hospitals, there are still many who are doing worthwhile charity. This is mostly true of the ones run by religious/spiritual communities. Sri Sathya Sai Trust Hospital is a case in point. Apart from primary and secondary care, it provides tertiary care free, with best-in-class services. No surprise then that it receives patients in huge numbers, not only from India, but from SAARC countries and Africa. But the truth is also that such trusts have a large amount of community support and do not face cost problems. Unfortunately, this may not be the case for other trusts. It is thus a catch-22 situation for most hospitals that do have the vision to excel but ultimately are bounded by the mission.

What will determine the survival of trust hospitals is how well they maintain the balance between their mission and the changing dynamics.