Just visualise this situation. There is a patient who seeks emergency admission in a corporate hospital. Once in, you are asked whether you have insurance or not. Next, you have a choice of rooms, which starts from sharing to a single non-A/C room to an A/C single, deluxe A/C, super deluxe A/C, and a suite.

You may want a single non-A/C room. But you are told that if single, there are only deluxe and super-deluxe rooms available, which cost more. You have no choice but to opt for one of them.

If there is a medical procedure, the patient is kept in an ICU, which also has different grades where the nurse-to-patient ratio varies. You have to take decisions there and then and will logically opt for the best. Sounds familiar? Welcome to the world of five-star or seven-star corporate hospitals.

A lucrative business model

If one looks at the balance sheets of these entities, the net profit margin would be in the region of 10-15%, which is after taking care of salaries, materials used, depreciation, taxes, etc. The average revenue per patient would be close to Rs 2 lakhs. Sounds like a very lucrative business? Yes, it is, because of the way in which the system works, which calls for a strict review and possibly reform.

Insurance as a cost escalator

Let’s start from the first move. The knowledge of insurance is an assurance to the hospital that cost will not be a limiting factor. Therefore, one is nudged to better facilities, which means a higher........

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