The tertiary level of care consists of hospitals, which offer a range of specialist services promoted by business groups as trust, private, or public limited enterprises. These are located in metros and larger cities in the country. The promoters of many of these enterprises have strong Non Resident Indian links and have influenced State policy since the late eighties for giving subsidies to this sector. Most of the subsidies offered by the government in way of land at concessional rates, granting medical care the status of industry, and reduction of import duties on high technology equipment, have largely benefitted these hospitals (Baru: 1998). During the recent budget the promoters of these hospitals have been demanding for increase in subsidies. While these large, private hospitals have been demanding more subsidies and concessions from the government, many of them have been found to be flouting conditionalities prescribed by the government when duty exemption for import of medical equipment was granted. An important conditionality was that 20 pr cent of in-patients and 40 per cent of out-patients should be from among the poor and that they must be treated free of cost. A major controversy was aired in the media last year relating to the fact that larger private hospitals, both for-profit and non-profit, have not adhered to the conditionalities prescribed by the government (Newspaper clippings). As a result of these reports a Committee has been set up by the Delhi government to examine these issues. While the findings of this committee will be crucial for future policy, it needs to be recognised that there is a basic contradiction in the demands put forth by the larger private hospitals. On the one hand, they demand the status of an industry for financial support and, on the other hand, they want to retain the privileges of a welfare institution. Therefore, this committee must not only take stock of the performance of the private sector and its adherence to conditionalities, but also define the role of the State in monitoring these hospitals.

Staffing and Conditions of Work

Research studies on private hospitals have also shown that there are problems of getting access to data on personnel employed, their wages, and cost of services in these hospitals. This poses a major constraint for doing any analysis of the costing pattern in this sector. The prevalence of poor qualifications, wages and working conditions have been demonstrated through studies on private nursing homes in Bombay, Delhi and Hyderabad (Nandraj: 1994; Nanda and Baru: 1993; Baru: 1998). These studies have shown that paramedical and supporting staff often work for very low wages and are not qualified for the work that they do. Hence, there is a great deal of turnover of staff at these levels and they work under abysmal conditions, which is bound to have a direct impact on patient care. Since these nursing homes are not even registered, the question of getting information on the staffing or wage patterns becomes extremely difficult. While these issues have been commented on for the smaller enterprises, it is assumed that the large corporate and charitable hospitals, which are located in the larger cities, employ better qualified staff at all levels with better pay and working conditions. However, even in this category of hospitals there is a lack of transparency in information relating to costing of services and the wage structures of the medical, paramedical, and supporting staff.

A recent enquiry conducted by Workers Solidarity entitled “Critical Condition: A Report on Workers in Delhi’s Private Hospitals” has looked into the working conditions of fourth class employees in eight of Delhi’s bigger and well known private hospitals: Apollo, Batra, Sunderlal Jain, Gangaram, BL Kanpur, Tirathram, Jessa Ram and Mool Chand. The findings are, to say the least, very shocking and revealing. This enquiry has primarily elicited information regarding the status of workers, viz. permanent or contract workers, employed by these large hospitals, their working conditions and wages. Based on largely qualitative methods, this report provides some valuable insights into the proportional distribution of the total expenditure of a hospital on various items like drugs/equipment, wages, and maintenance.

The report states that 50 per cent of the expenditure is incurred for equipment and drugs; 30 per cent for wages and 20 per cent for maintenance and sundry expenses. As the report observes: “Hospital managements try to ensure that their total wage bill does not exceed thirty percent of all expenditures; wage expenditures above that level are deemed by managements to make a hospital unviable” (workers solidarity: 2000. p.3). These hospitals spend a high proportion of their earnings on paying their specialist consultants. A considerable proportion of the thirty percent on wages forms the fees paid to consultants. Over half the consultation fees that a hospital charges a patient is paid to the doctor by the hospital. This proportion of wages paid to consultants has gone up since the earnings of private hospital consultants have short up in recent years. For instance, doctors in large private hospitals currently earn five times the salary of their counterparts in All India Institute of Medical Sciences (Workers Solidarity: 2000).

The hospital managements keep their expenditure on wages low in two ways. One is through the contractualisation of fourth class employees, thus paying them much less than the stipulated minimum wages and the prescribed benefits. The other way is by gradually undermining the established rights of permanent workers. Economic efficiency justifies paying low wages to the paramedical and supporting staff in order to make profits. In the selected hospitals, the contract system prevails among fourth class employees viz. ayahs, ward boys, sweepers, security guards and also among canteen workers, laundry workers and pharmacy workers. While the older Trust hospitals employ a higher proportion of permanent compared to contract workers, in the newer hospitals there is a much larger presence of contract labour. As the report observes: “The contract workers often work without a weekly break. This is a violation of Section 17 of the Delhi Shops and Establishments Act, 1954, which states that every employee shall be allowed atleast twenty-four consecutive hours of rest in every week. Section 18 of the Act states that no wages shall be deducted for this weekly holiday… Principal employers tend to wash their hands off the responsibility of stipulated and fair wages, despite the law clearly stating that the responsibility of payment of minimum wages and other shortcomings lies with the principal employer (in this case the hospitals) in case the contractor does not fulfil his obligations” (Workers Solidarity: 2000; p.6-7). The report shows that the contract workers are overworked in terms of long hours of work often without even a weekly break. When there is a shortage of labour the available workers are made to work overtime without adequate break or rest from their earlier shift. These kinds of conditions will definitely effect the productivity of these workers and, in fact, reduce their efficiency.

The job insecurity and poor working conditions of this class of workers is bound to affect the quality of care provided to patients. In any hospital it is the paramedical and supporting staff who interact very closely with patients by attending to their physical and emotional needs while the medical personnel look after the clinical aspect of treatment. Therefore, a hospital that is responsive to patient needs, requires well trained personnel at various levels who interact together as a team, co-ordinating and complementing each other’s role. It is not enough to have well qualified specialists alone, it is equally important to have well trained paramedical and supporting staff to ensure good quality patient care. The problems of contractualising the support staff without adequate supervision will definitely cut costs for the hospitals but will not necessarily help in improving quality of care since it does not generate a sense of belonging and loyalty among the workers. This is definitely not conducive for building commitment among the workers towards the hospital that employs them.

While contracting out is seen as a way of responding to inefficiency of permanent workers and of reducing costs, there is no reason why the institutions that employ these measures cannot put in place administrative mechanisms that can monitor and ensure that there is adherence to minimum conditions of work. These would be essential to provide and maintain quality services in hospitals. In fact over-worked, ill-trained and insecure workers are likely to make more mistakes and hide them too! In short, the reputation of the consultant alone supported by a shaky and over-stretched staff at different levels is responsible for whatever quality of service that is provided.

Like the contractualisation of workers, a similar issue of concern for both the public and private sectors is the contracting out of ancillary services. These measures are very often viewed as promoting better efficiency, in narrow economic terms. This is indeed the dilemma that all health care institutions must face when they demand the status of an industry, since the profit motive leads to cutting costs which has a bearing on the quality of care. Like all other industries, hospitals also need to be governed by rules to ensure the quality and safety of their workers. Experiences of contracting out of laundry, diet and other ancillary services in other developing countries show that this process requires administrative structures, which can periodically monitor the quality of services provided by the contractors since there is a tendency for them to cut costs, which affects the quality of care. In fact in some African countries the administrative costs to oversee the contracting out in public hospitals has proven to be an expensive proposition (Mc. Pake & Banda: 1994).

Many of the older, charitable hospitals in Delhi have become more commercial in their operations. The report refers particularly to the case of BL Kanpur Hospital that was established as a trust in 1959 but, during the nineties there, was a move by some of the trustees to allow a private company to take over this hospital in order to re-develop and renovate the hospital into a state of the art super speciality hospital with 250 beds to be set up with a substantial investment (Workers Solidarity: 2000 p.10). Hospitals like BL Kanpur, Moolchand, Jessaram, Tirathram, and Gangaram had earlier employed a larger proportion of supporting staff as permanent workers. The recent trend among these hospitals is to supplant or replace the permanent workers with contract workers. However, compared to the newer, corporate hospitals, the proportion of permanent workers is still much higher in these hospitals. If these are the trends in the larger hospitals then one can well imagine what the conditions of the paramedical and supporting staff would be smaller hospitals and nursing homes. While there has been some discussion on the need to specify physical standards in private nursing homes and hospitals, there is a need for much more specific policy initiatives with regard to qualifications of the various levels of personnel employed and some norms for remuneration and working conditions. This would have to be built into the initiatives of the efforts at accreditation that are now underway: The concern here is that while the initiatives in cutting costs by employing contract labour would definitely show private hospitals as being cost effective, however, this has serious implications for the quality of patient care.

Yet another way of saving costs in the private sector is to discharge patients early in order to ensure quick turnover. Studies from both developed and developing countries have shown that private hospitals often discharge patients, even before they are ready for it, in order to maximise patient turnover and increase interventions. According to a promoter of a corporate hospital, it is only during the first few days of hospitalisation that a hospital makes profits on beds, after which the profit margins tend to fall. It is during the first few days of hospitalisation that all the procedures, both surgical and non surgical are completed. There is little scope thereafter for charging patients more than bed charges. The only charges that the hospital is likely to derive profits from during the recovery phase are on drugs, and nursing care (Baru et at: 1999; also see McKinlay: 1980). This is an important reason why private hospitals tend to discharge patients much earlier than public hospitals. As the report points out “Much of a private hospital’s profits are derived from the usually steep charges for inpatient services and diagnostic tests. It is also extracted from exorbitant bed charges”. (Workers Solidarity: 2000).

In view of the increasing demands on the government by these hospitals, it is imperative that they ensure certain minimum working conditions for their employees, which is expected of all industries. Hospitals are labour-intensive organisations which are not merely dependent on medical expertise but require the coordination of different levels of staff to provide quality patient care. However, the report points to poor working and wage conditions and raises issues of setting standards for working conditions of supporting staff. Here, the State needs to play a more proactive role in ensuring that hospitals comply with certain norms and standards for the subsidy that they receive and ensure that they do not deny access to the poor. It is clear that, for the private sector, efficiency is seen only in terms of profits that can be generated and ruled by market principles. It is, therefore, imperative that the State have effective administrative mechanisms, which will ensure that these private hospitals comply to conditionalities for receiving subsidies. Until the conditionalities are enforced and complied by these hospitals the government must not offer more subsidies. With increasing privatisation it is quite apparent that the private hospitals have been adopting practices that undermine consumer needs and also the minimum rights that workers are entitled to in such institutions. The larger hospitals that have received subsidies should ensure greater transparency in their operations, viz. services offered, rates, cost of diagnostic tests, patient records, billing procedures, and periodic medical audit (Baru et al: 1999).

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