Higher Operating Costs Forcing Hospitals To Hike Fees: Healthcare Global’s BS Ajaikumar
While dismissing claims about surge pricing, Ajaikumar agreed that there has been a rise in inflation and operating costs in the medical sector after Covid-19.
A recent spike in operating costs has prompted hospitals to increase their charges, according to Dr BS Ajaikumar, executive director of Healthcare Global Enterprises Ltd.
While speaking to NDTV Profit, Ajaikumar denied claims made by media that leading hospital chains are resorting to peak charges for operation theatre time, which are similar to surge charges in other quick service sectors. He added that the patients are intimated about the pricing well in advance.
“Normally, when patients come in, they are well aware of the charges. Most hospitals practice these ethics. Patients are told what the charges are. For example, private wards versus general wards. All of this is explained and the signature is obtained,” he said.
The top executive noted that an extra charge of around 5% may be incurred due to unexpected procedures or interventions.
“We believe in doing the right thing for the patient at the time and then we decide the right outcome. Most of the hospitals are now into quality outcomes. We know for a fact that this (surge pricing) is not happening generally,” he said.
Recent media reports had indicated inflated pricing structures by hospitals, quoting health insurance executives. According to the reports, hospitals were trying to increase prices by adding fees for procedures, which used to be a part of the bundled insurance packages.
While dismissing claims about surge pricing, Ajaikumar agreed that there has been a rise in inflation and operating costs in the medical sector, especially after the Covid-19 pandemic.
“For example, if you want to buy a technology the cost has gone up (by) over 50%. For CT scans or MRI machines, what used to be Rs 4.5 crore has now become Rs 7 crore. The customs duty is also another reason,” he said.
Talent acquisition is another area where the costs have gone up, the top executive noted. He said that the inflated costs needed to be absorbed, if the hospitals were going to do the right thing for the patient.
“That is why the measure I do is what the margin is. The margin should always be kept somewhere between 20% and 25%. I think this will control the medical expenses,” he said.
Shares of Healthcare Global Enterprises closed 1.55% lower at Rs 441 apiece on the NSE compared to a decline of 0.34% on the Nifty 50.
