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The Responsiveness of Hospitals in Healthcare Financing: Pharma-Equity Problems and Pitfalls

Natraj Ravichandran

Objectives: Considerable disparities in healthcare and its related services persist due to medical intervention and its subsequent follow-up requirement. Increase in patients’ cost sharing at the point of services for medical interventions play a major role in such disparities. The present study analyses how far the hospitals subsidize the household’s expenses on drugs and medicines for their patients. This study also aims to examine the pharmaequity- model, where patients have same opportunities even if the outcomes are unequal, and how far the hospitals retain their patient inflows towards their own growth and development.

Methods: The sources of data are drawn from the selected hospitals in National Capital Region, India and conducted in five multi-specialty hospitals with 500 beds and are managed by five different establishments. Patients are selected from the hospitals’ registration data list from January 2012 - May 2014.

Key findings: No systematic pattern or price difference could be deciphered across the studied hospitals. The study shows that the drugs and medicines price rise has displayed an enormous upswing. However, it is also revealed that the initial price per se is fixed with higher profit margins. The tender purchase of drugs and medicines by the hospitals has revealed the post-tender margins running into high in retail purchase, and there being no method to determine the margin charged by the hospitals. The studied hospitals have exercised to reign in drug prices from increasing to unreasonable levels while criteria vary from one hospital to another.

Conclusion: The hospitals have some form of healthcare financing mechanisms to purchase drugs for the benefit of patients. The studied hospitals have evolved various criteria and policy initiatives to improve the outcome i.e., patient inflows. In addition, 'walk-the-extra miles' healthcare policies of hospitals and their responsiveness reduce the burden of the diseases is noted.