Over 1000% difference in medical test prices across cities: Will govt standardise rates?

The government needs to standardise prices of medical diagnostic tests across cities, says the Economic Survey 2018. . As per the Economic Survey 2017-18 tabled in Parliament, there are wide differences in the average prices of medical diagnostic tests across cities which need to be addressed by standardising rates in order to reduce Out of Pocket expenses (OPE) on health services.

An analysis of prices of diagnostic tests across various cities in India done by the survey reveals that there are not only wide differences in average prices of diagnostic tests but also the price range is very wide. The data on quality and accreditation of diagnostic establishments in the country is scanty, says the survey.

The data reveals that a lipid profile test can cost a minimum of Rs 90 and a maximum of Rs 7,110, 2d echo test costs ranges between Rs 500-Rs 5200 and Liver Function tests costs ranges between Rs 100-2500.


Range in prices/average costs of diagnostic tests across cities in India, 2017

Source: Economic Survey 2017-18


According to the survey, there is a need to prioritize standardization of rates by devising appropriate quality assurance framework and regulatory mechanism. Though, the Government has already enacted Clinical Establishments (Registration and Regulation) Act, 2010 and notified the Clinical Establishments (Central Government) Rules, 2012 to regulate the clinical establishments across the country, presently, the Act is applicable in 10 States/UTs, which needs to be taken up by remaining States while ensuring strict compliance as well.

The economic survey also lays out the steps taken by the government to reduce the (OPE) on health services.
1. Under National Health Mission (NHM), Government is supporting States through National Free Diagnostic Service Initiative to provide essential diagnostic services in public health facilities. Government of India has brought out guidelines in July 2015 to provide states with a broad framework for implementing free drug initiatives. The number of tests varies from State to State. An amount of Rs 759 crore has been approved for free diagnostic service initiative under NHM for 29 States/UTs in 2017-18.

2. National Free Drug Initiative under NHM aims at expanding the availability of free drug provision in all public health facilities. The initiative would not only provide support to States for purchase of drugs but enabling States to place transparent system of procurement and quality assurance, robust supply management and logistics that would ensure highest level of safety and quality of drugs. All States have notified free drug policy. Over 25 States are implementing IT based supply chain management of drugs.

3. Under Clinical Establishments (Registration and Regulation) Act, 2010 and Clinical Establishments (Central Government) Rules, 2012, the clinical establishments (in the States / Union Territories where the Act is applicable) shall charge the rates for each type of procedure and services within the range of rates determined by the Central Government from time to time in consultation with the State Governments. The clinical establishments are also required to display the rates charged for each type of services provided and facilities available, at a conspicuous place both in the local language and English. The National Council for Clinical Establishments has approved a standard list of medical procedures and a standard template for costing of medical procedures and shared the same with the States and UTs.

4. Medical Council of India (MCI) has amended the Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002 vide notification dated 21.09.2016, which stipulates that 'every physician should prescribe drugs with generic names legibly and preferably in capital letters and he/she shall ensure that there is a rational prescription and use of drugs'. All the Registered Medical Practitioners under the Indian Medical Council (IMC) Act have been directed to comply with the aforesaid provisions.

Economic Survey states that incurring higher levels of Out of Pocket Expenditure (OoPE) on health adversely impacts the poorer sections and widens inequalities. Although, OoPE has declined approximately 7 percentage points during the period 2004-05 to 2014-15, its share is still at 62 per cent as per NHA 2014-15.

Diagnostics are an important part of the health care system that provide information needed by service providers to make informed decisions about healthcare provision related to treatment and management. Limited affordability and access to quality medical services are among the major challenges contributing to delayed or inappropriate responses to disease control and patient management. The findings of Household Health Expenditure survey in India indicate that about 10 per cent of OoPE on health was spent by households on diagnostics (including medicines and diagnostic test as part of package) during 2013-14.

Government has already taken several steps such as regulating prices of stent and life-saving drugs.