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Thursday , December 20 , 2012
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Investor meet off mark
Health posers stump state

Ranchi, Dec. 19: The state hosted its maiden health investors’ meet at a posh hospitality address in the capital today, the five-hour interface ending in a host of unanswered questions that showed up the state’s confusion over the cash carrot it could offer its private partners.

Around 26 investors — including big names such as GE Healthcare, Wockhardt, Siemens, Phillips Healthcare, Dr Lal Pathlabs, Calcutta Heart Research Centre and Sri Narayani Hospital & Research Centre — turned up at the invitation of the state health department, but their valid fiscal questions on profit versus charity largely went unanswered.

The state, represented by minister Hemlal Murmu, secretary K. Vidyasagar, labour commissioner S.K. Burnwal, senior bureaucrats as well as representatives from independent think tank International Finance Corporation (IFC), told investors the two tasks it had in mind.

One, after the Ranchi Sadar Hospital, near Albert Ekka Chowk, was fully constructed anew, the state needs a private partner to run the show. The health department wants the revamped hospital — currently being built afresh by agency National Building Construction Company Limited at a cost of Rs 131 crore — to be a multi-super specialty tertiary care health hub.

Two, the state wants private partners to set up diagnostic centres in each of its 24 districts.

The state also made it clear its eligibility criteria. The firms should possess National Accreditation Board for Hospitals & Healthcare Providers (NABH) or Joint Commission on Accreditation of Healthcare Organisations (JCI) certifications with three to five years of experience. This makes private healthcare service players from Jharkhand ineligible. This apart, the state also demanded a proven track record in key performance indicators like clinical effici-ency, state-of-the-art medical equipment and high-end technical benchmarks to separate the wheat from the chaff.

Where Jharkhand fumbled badly was in bolstering investor confidence on the profitability of the ventures.

The government showed it wasn’t clear about the financial aspects of revenue sharing with private partners.

In a state-run healthcare outlet — be it a hospital or a dispensary — treatment is free of cost to below-poverty-line patients. The question of private subsidy to make the project viable for the private investor is paramount.

For private partners, the priority would be profit and not welfare. Though the government healthcare sector — crippled by manpower and resource crunch — badly needs private partners to get up on its feet, it needs to find the fine balance between free service and paying clients.

Though the representative of the state’s outsourced advisory outfit IFC Pankaj Sinha tried to exude confidence by saying they would select “competent players” by July next year, neither he nor anyone from the government answered the key question.

“Any new venture takes six months to one year as an incubation period before getting the flow. Will government bear the losses incurred by us?” asked Dr Anant Sinha of Dev Kamal Hospital.

Parag Vajpai of GE Healthcare had concerns about bureaucratic hitches in reimbursement of medical claims related to BPL patients.

“The Rashtriya Swasthya Bima Yojana or RSBY provides hospitalisation insurance to BPL up to Rs 30,000, but what about outpatient department services? RSBY doesn’t cover OPD. How will the poor pay for medicines?” asked Suraj Nagori of Calcutta Heart Research Centre.

A Sri Narayani Hospital & Research Centre representative said openly: “If there is a provision to treat both BPL and paying patients, we know we have to treat the former for free and for the sake of balance sheet we would prefer to treat the latter. This leads to tensions in running a healthcare service in public-private partnership mode. Any investor will focus on quality healthcare coupled with profits. The government has no clarity on this aspect.”

Health secretary K. Vidyasagar said the summit’s aim was to “sense investor pulse”. “We want to know their fears and reassess our preparation before selecting right partner. Many government health schemes can be clubbed to give subsidies to the BPL,” he said.

Burnwal, who looks after the RSBY, agreed saying insurance provisions could be tweaked. But he put the onus of working out the best fiscal deal on the IFC.

Clearly, the state government and its outsourced advisory body have a lot of homework left before changing the face of healthcare.