According to a report by Motilal Oswal Financial Services Limited, medical inflation in India has continued even though hospital admissions related to COVID-19 have decreased. In particular, over the previous year, room rentals have increased noticeably by 3-4%. In general, hospitals are wary of large, frequent increases in room rental fees, but in this case, the costs have increased significantly. The trend indicates that the country’s continuing rise in medical inflation may be caused by factors other than COVID-19, such as higher operating costs or other economic pressures.
According to the report, the cost of routine surgeries has gone up by 8–10%, but the cost of consumables has gone up by a more significant 17–18%. The inflation in medical costs is reflected in this price increase, which is frequently passed on to customers. Furthermore, the fees that physicians charge are associated with the overall sum, and the difference is substantial depending on the level of specialization of the physicians. The report highlights a generally agreed-upon increase in major surgery costs, with a noteworthy 12–15% increase. This data emphasizes how medical inflation has a wider effect on different aspects of healthcare expenses.
In the context of medical costs, the report compares cash payments and Mediclaim (health insurance). In order to control expenses when paying out of pocket (cash), people frequently choose lower-category accommodations like twin sharing or general wards. Nonetheless, patients may select more upscale accommodations when they have Mediclaim coverage, which makes the insurance claims more severe. The report also emphasizes how some aspects of insurance plans—like doctor bills—are frequently connected to the kind of accommodation that is rented. This observation highlights how decisions about accommodations affect the dynamics of medical costs as a whole, especially when insurance is involved.
According to the report, there is no appreciable difference in cost between corporate and retail plans offered by the same insurance provider. It implies that the cost structure stays the same regardless of whether the health insurance plan is acquired privately or through a business agreement. The report also notes that hospitals’ profit margins are narrow for high-value surgeries, particularly transplants, and that their prices hardly fluctuate. The report credits the development of herd immunity and the effectiveness of a comprehensive vaccination program for the decreased severity of COVID-19 in terms of mortality.
Differences between hospitals in the network and those outside it are highlighted in the report for insurers who are private and PSU (Public Sector Undertaking). In comparison to non-Mediclaim charges, private/PSU insurers receive a 10/20% discount, respectively, in their network hospitals. Because PSU insurers write larger volumes of business, they typically obtain better discounts. According to the report, the pandemic has caused modifications to treatment plans, which has an impact on claim costs. Hospitalization costs have increased significantly over the last three to four years, which has been made worse by the enormous strain the COVID-19 pandemic has put on the healthcare system.
The statement implies that, irrespective of the particular treatment they are seeking, people in need of medical attention are now required to have an RT-PCR test performed. The patient must pay an additional cost for this extra measure. In addition, medical professionals such as physicians, nurses, and other staff members still need protective gear like masks, gloves, and PPE (Personal Protective Equipment) kits. The continuous requirement for these preventative measures raises the operational expenses that healthcare facilities must bear, which raises the total cost of delivering healthcare services.
