With the budget proposal to impose 5% service tax on healthcare services, it is the common man who would bear the brunt. In plain words, this is what it signifies.
With the budget proposal to impose 5% service tax on healthcare services, it is the common man who would bear the brunt. In plain words, this is what it signifies. If you undergo any heart operation and spend Rs1 lakh for the surgery, then you must pay Rs5,000 more as service tax.
While the proposal says only air-conditioned (AC) hospitals need to pay the tax, the fact remains that no surgery, either simple or complex, can be performed without an AC operation theatre.
Legally, a blood bank cannot get licence without air-conditioning. CT, MRI, catheterisation labs, microbiology labs and intensive care units do not function without air-conditioning.
In his recent appeal to public on the unfair tax hike on healthcare, Dr Devi Prasad Shetty, chairman, Narayana Health City, said, “Let’s choose March 12 as the Misery Day. On this day, all the citizens must gather near the governor’s house in the state capital with a petition to roll-back the proposed service tax.”
“Today, almost 90% of those in need of tertiary treatment die a slow and painful death because they cannot afford surgical treatment. The remaining 10% who can afford, end up spending a better part of their life’s savings for treatment,” said Dr Shetty. Service tax on health insurance will only make health insurance unaffordable for the ‘aam aadmi’, he said.
The Private Hospitals and Nursing Homes Association, Bangalore, is planning to protest against the service tax implementation.
“Last Tuesday, we had a meeting where everyone protested against this tax hike. The burden is going to trickle down to the patients and their families, ultimately making healthcare unaffordable. Thus, association members are planning to write to the prime minister and finance minister, government of India, pointing out the difficulties with tax hike,” said Dr H Paramesh, president, Private Hospitals and Nursing Homes Association.
The concern is more for the small nursing homes which run with 25-40 beds and have huge network in the community for providing primary and secondary care. Shelling out 5% additional service tax for these hospitals or their patients is going to be difficult, said Dr Paramesh.
“Government should understand that air-conditioning in healthcare institutes is not a luxury but a necessity,” said Dr Nandakumar Jairam, chairman and group medical director, Columbia Asia Hospital.
“The effect of implementing additional service tax on healthcare institutes is going to be negative, since health is an expenditure that all, rich or not, has to bear at one point in life. I would strongly recommend the government to reconsider this,” he said.
Categorising hospitals with air-conditioning as luxury hospital is unfair, since AC forms a critical part of hospital care. All hospitals have a large number of general beds which str accessed by the poor and middle class, said Dr Llyod Nazareth, chief operating officer, Fortis Hospital.
“National Accreditation Board for Hospitals & Healthcare Providers, a government-appointed body, has made it mandatory for hospitals to have certain standards of air-conditioning to get their accreditation,” he said.
Only 10%-15% of the Indian population can afford to have health insurance. For the remaining 85%, paying service tax is going to be a hiccup.
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