Government weighs cap on hospital markups for medical devices under TMR
The government is weighing a Trade Margin Rationalisation scheme after a Maharashtra FDA probe found hospitals marking up medical devices by up to 2,841 percent.
If a family member has to be admitted to hospital, the bill at discharge can be shocking. Besides medicines, various medical items used during treatment add significantly to the bill. But has anyone considered what a hospital actually pays for a medical device, and how much it charges the patient for it?
The debate intensified after a large gap emerged between the purchase price of medical equipment and the amount charged to patients. This has led to discussion of TMR, or Trade Margin Rationalisation.
Under TMR, a pricing system is being considered that aims to reduce the large gap between the purchase price of medical equipment and the charge billed to the patient. For instance, if a hospital gets a medical device for Rs 100 and charges the patient Rs 400 for it, TMR is focused on narrowing this gap. Talks on this are still ongoing.
An investigation by the Maharashtra FDA has made some startling revelations. It found a very large difference between the purchase price of certain medical devices and their MRP.
The question is how much margin the government will fix on medical equipment. The government's margin has not yet been decided, and discussions are still underway.
The survey also found that profits ranging from 150 percent to 2,841 percent are being made on medical products. A hospital bought a catheter for Rs 29.41 and charged the patient Rs 310 for it. A hospital bought a syringe for Rs 6.75 and charged the patient Rs 57.20 for it. A hospital bought a nebulizer or oxygen mask for Rs 40 to 45 and charged the patient Rs 650 to Rs 715 for it. A hospital bought an IV infusion set for Rs 11.05 and charged the patient Rs 325 for it.
Hospitals maintain that the difference between the purchase price of any medical item and the amount charged to the patient does not translate into profit for them. They also say they have to account for several other necessary expenses.
TMR essentially means narrowing the gap between the purchase price of medical items and the charges levied on patients. This means examining the price at which supplies reach hospitals and how much hospitals are currently charging patients for them.
Hospitals say the MRP of medical products is fixed by the manufacturing company. They add that hospitals also have to bear costs related to machinery, sanitation, patient safety, emergency services and staff.
