The Mess at CGHS

While the government has ambitions of running and efficiently managing the world’s largest public healthcare program called Ayushman Bharat, the much smaller and much older healthcare scheme meant for the employees of the Central Government is in a complete mess. The Central Government Health Scheme (CGHS) website loftily proclaims that it” is the model Health care facility provider for Central Government employees & Pensioners and is unique of its kind due to the large volume of beneficiary base, and open ended generous approach of providing health care”. It is anything but that.

CGHS is over six decades old and is run under the Ministry of Health and Family Welfare of the Government of India. It is meant to provide subsidized healthcare to government servants through a network of primary clinics, dispensaries and em-paneled hospitals, which are mostly in the private sector. The private hospitals are required to treat the CGHS beneficiaries in a cashless mode and claim reimbursements at subsidized and pre-agreed rates from the CGHS organisation. The participation of the hospitals in the scheme is voluntary.

Recently, on July 2nd, the Minister of State for Health and Family Welfare, GoI, Ashwini Choubey, stated in the Rajya Sabha (the upper house of the Indian Parliament), that the government has received some complaints regarding private hospitals em-paneled with CGHS refusing to admit the CGHS beneficiaries and that show cause notices have been issued to these hospitals and strict action is contemplated against them. As usual, the government is stating only one side of the story.

Here is the other side.

CGHS had entered into an agreement with private hospitals in 2014. The agreements were valid for 2 years. Since 2016, the CGHS organisation has been arbitrarily extending these agreements for a period of 3 months. Fresh agreements that should have been signed in 2016 have not been floated and the em-paneled hospitals just receive a communication from the CGHS organisation that the agreement is extended by 3 more months.

Interestingly, the agreements signed by the hospitals in 2014 were sent to CGHS for the signatures of CGHS officials. These have not even been returned to the hospitals. This essentially means that the hospitals do not hold with them any legally valid agreement duly signed by both the parties.

To make matters infinitely worse, the pricing that the hospitals had agreed to in 2014 for a period of 2 years remains unchanged even in 2019. Thus, the CGHS organisation has not increased the price that they pay to the hospitals in the last 5 years. The price of a consultation with a specialist is fixed at INR 150 (approx. USD 2) !!!! The hospitals’ costs of course keep going up year on year. There is no justification offered for this stasis.

If this was not bad enough, the CGHS never pays the hospitals on agreed credit period. The payments are delayed for months, while the hospitals are expected to continue treating CGHS patients without a pause. One clause in the CGHS agreement states that 60% of the bill will be reimbursed by the CGHS with-in one week of the submission of the bills. This, of course remains only on paper. The CGHS owes hundreds of crores of rupees to private hospitals in the National Capital Region of Delhi alone. Effectively, the private hospitals end up locking their working capital in treating CGHS beneficiaries.

A small industry thrives on recovering dues from the CGHS. Sundry companies offer their services to private hospitals to help get their bills cleared by the CGHS. Many hospitals employ a small army to chase their bills across the dusty desks of the CGHS mandarins. They literally move the files in the CGHS corridors, from one desk to the other and from one office to the other. All this means additional expenses for the private hospitals, just to recover their legitimate dues.

Finally, when the money arrives after a valiant effort stretching over months, the hospitals discover that their bills have not been paid in full and deductions have been made for reasons, never specified. The hospitals often make representations to the CGHS to understand the reasons for these deductions and seek the recoveries, which of course is another herculean task. Some simply do not bother and accept whatever CGHS deigns to pay them.

The genesis of the problem lies in the fact that CGHS is under-funded and monumentally inefficient. No one is actually bothered to take a broom and clean up the mess. No one has a real incentive to do that. While, perverse incentives to let things be, continue unabated.

Rather than threatening private hospitals, Minister Choubey will perhaps do well to have a look right down the corridor from his office and do something about the mess in CGHS.

The views expressed are personal and do not necessarily reflect those of my employers.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s