NITI Aayog has released a comprehensive study on the not-for-profit hospital model in the country, in a step towards closing the information gap on such institutions and facilitating robust policymaking in this area.
‘Not-for-Profit’ hospitals
- The “Not-for-Profit” Hospital Sector has the reputation of providing affordable and accessible healthcare for many years.
- This sector provides not only curative healthcare, but also preventive healthcare, and links healthcare with social reform, community engagement, and education.
- They utilize the resources and grants provided to them by the Government to provide cost-effective healthcare to the population without being overly concerned about profits.
- However, this sector remains largely understudied, with a lack of awareness about its services in the public domain.
Significance for India
- As per the NITI Aayog’s report, the not-for-profit hospitals account for only 1.1% of treated ailments as of June 2018.
- The report further revealed that for-profit hospitals account for 55.3% of in-patients, while not-for-profit hospitals account for only 2.7% of in-patients in the country.
- The cumulative cost of care at not-for-profit hospitals is lesser than for-profit hospitals by about one-fourth in the in-patient department.
- This is reckoned by the package component of cost, which is approximately 20% lower, the doctor’s or surgeon’s charges, which are approximately 36% lower and the major aspect being the bed charges, which are approximately 44% lower than the for-profit hospitals.
NITI Aayog’s approach
- Categorization of the prominent not-for-profit hospitals based on the premise of services and their ownership
- Understanding the business model of the hospitals i.e. the financial viability, and their dependence on donations and grants
- Understanding the challenges faced by these hospitals
- Formulation of recommendations for policy interventions to promote the sector
Categories of such hospitals
Using the above-mentioned approach and secondary research, the following four categories were defined for the not-for-profit hospitals:
- Faith-based Hospitals
- Community-based Hospitals
- Cooperative Hospitals
- Private Trust Hospitals
Why need such hospitals?
- There has been relatively low investment in the expansion of the health sector in the private domain.
- The not-for-profit hospital sector provides not only curative but also preventive healthcare.
- It links healthcare with social reform, community engagement, and education.
- It uses government resources and grants to provide cost-effective healthcare to people without being concerned about profits.
