SC urges states to regulate private hospital charges
New Delhi: The Supreme Court has called upon state governments to formulate policies addressing the issue of excessive charges and exploitation of patients in private hospitals. The directive was issued while disposing of a Public Interest Litigation (PIL) that raised concerns over hospitals compelling patients to purchase medicines and medical supplies exclusively from in-house pharmacies at inflated prices.
A bench of Justices Surya Kant and N Kotishwar Singh noted that while patient rights must be safeguarded, issuing mandatory directions from the court could impede the growth of private healthcare facilities. “Policy-makers are best equipped to take a holistic view and formulate the guidelines as may be required to safeguard the patients or their attendants from exploitation while simultaneously ensuring that there is no discouragement and unreasonable restriction on private entities from entering the health sector,” the bench observed.
The PIL was filed by petitioners Siddharth Dalmia and another, who highlighted that private hospitals were systematically overcharging patients by mandating purchases from their affiliated pharmacies. They contended that such practices amounted to economic exploitation and violated the right to health under Article 21 of the Constitution.
The petition was prompted by a personal experience where a family member of the petitioners undergoing cancer treatment was compelled to buy medicines at exorbitant prices from a hospital’s in-house pharmacy. Arguing that the absence of regulatory mechanisms enabled hospitals to impose unreasonable charges, the petitioners sought judicial intervention to prevent such coercive practices.
The court acknowledged the significance of medical care as a fundamental component of the right to life under Article 21 but pointed out the challenges faced by state governments in developing adequate public healthcare infrastructure. “Given the vast population of our country, the states have struggled to build sufficient medical infrastructure. To address this, the government encouraged private entities to establish hospitals, leading to the growth of renowned private healthcare institutions in India, rivalling top hospitals worldwide,” the court stated.
Recognising the role of private hospitals in supplementing public healthcare, the bench observed that regulatory intervention should be left to state governments. “It may not be advisable for this court to issue mandatory directions which may hamper the growth of hospitals in the private sector, but parallelly, it is necessary to sensitise the state governments re: the problem of unreasonable charges and exploitation of patients in private hospitals,” the court stated in its March 4 ruling. Accordingly, the Supreme Court directed all state governments to take an appropriate policy decision on the matter. The ruling leaves it to the discretion of state authorities to determine the most effective way to regulate hospital charges without discouraging private investment in the healthcare sector.
