Calls by the Jan Swasthya Abhiyan and the Working Group on Access to Medicines and Treatment for controls on private hospital charges have brought an old policy failure back into focus: India has a legal framework intended to regulate clinical establishments, but patients still enter many private hospitals without a clear understanding of what treatment, medicines and consumables will cost.
The immediate issue is pricing. The larger issue is the absence of an effective system through which patients can compare charges, challenge arbitrary bills or choose where to purchase medicines and medical supplies. At a virtual media conference, the two organisations said patients continue to face excessive and arbitrary charges, with little effective protection or recourse. Their demands include a ceiling on hospital charges, regulation of medicine and consumable margins, and greater transparency on procurement costs.
The concerns come amid renewed scrutiny of private hospital pharmacies and the mark-ups applied to medicines. The Indian Express reported that the Supreme Court recently questioned steep differences between the procurement price and the price charged to patients, including a case in which a cancer medicine supplied at around Rs 2,700 carried an MRP of around Rs 27,000. The court also questioned practices that require patients to purchase medicines through hospital-linked pharmacies and asked the government to examine the regulation of trade margins.
The case illustrates why hospital billing is not only a consumer issue but also a governance problem. A patient seeking treatment is often making decisions under medical urgency, with limited ability to compare prices or negotiate. Unlike many ordinary purchases, a hospital bill can combine professional fees, room charges, procedure costs, medicines, medical consumables and service-related charges. The patient may also have little practical choice about whether a particular product can be purchased outside the hospital.
## A law that has not changed the patient experience
The Clinical Establishments Act, 2010 provides a legal framework for regulating clinical establishments and envisages government-determined ranges of charges. However, the Jan Swasthya Abhiyan and the Working Group said the law has not been implemented effectively. Their argument is that the existence of legislation has produced limited results on the ground because the mechanisms needed to determine, publish and enforce charges have not been put into operation.
This gap between legislation and implementation is central to the pricing problem. A law can establish the authority to regulate, but patients benefit only when rules are notified, responsibilities are assigned, prices are made visible and violations have consequences. In the absence of these steps, the patient remains exposed at the point of care, even when a statutory framework appears to exist.
K M Gopakumar, co-convener of the Working Group, said patients should know how much they will be charged before agreeing to treatment. That demand moves the debate beyond the question of whether a hospital is allowed to make a profit. It asks whether a patient can make an informed decision before a procedure begins and whether the price of essential medicines and consumables can be justified through a transparent system.
The problem is also connected to the uneven bargaining power between hospitals and patients. Dr Abhay Shukla, co-convener of the JSA, said private healthcare has expanded substantially in India while regulation has not kept pace. He said there is no effective regulation of rates and that patients have virtually no bargaining power over what they are charged.
## The numbers behind the dispute
The figures cited by the organisations show the scale of the concern, although the supplied report does not identify the methodology or source behind the estimates. Dr Shukla said leading corporate hospital chains charge an average of Rs 60,000 to Rs 78,000 per day of treatment. He also referred to estimated annual surpluses of Rs 22 lakh to Rs 55 lakh per bed in leading corporate hospital chains in recent years.
These figures are presented by the campaigners as evidence of excessive profitability being funded through patient bills. They are not, by themselves, a complete account of hospital finances. The report does not provide a cost breakdown covering staffing, equipment, buildings, debt, maintenance, insurance payments or other operating expenses. But the figures do establish the key policy question: what level of charge is reasonable, what costs should be disclosed, and which public authority should determine the answer?
The medicine example provides a more specific illustration of the transparency gap. A product supplied at approximately Rs 2,700 and carrying an MRP of approximately Rs 27,000 represents a large difference between the supply price and the maximum retail price cited in the court discussion. The report does not establish the full contractual or regulatory circumstances behind that particular product. It does, however, show why a printed MRP may not be sufficient protection if patients have no meaningful alternative source of purchase.
The organisations argue that the MRP cannot become a licence to charge patients many times the procurement price. Jyotsna Singh, co-convenor of the Working Group on Access to Medicines and Treatments, said the government must urgently fix trade margins on medical products and ensure that patients are free to purchase medicines and consumables from outside wherever clinically possible.
That proposed right to purchase outside the hospital is important because control over the point of sale can affect the patient’s ability to seek a lower price. The report does not say that every medicine or consumable can be sourced externally in every clinical situation. It records the demand that patients should have this freedom wherever it is clinically possible, rather than being automatically directed to a hospital-linked pharmacy.
## Maharashtra’s regulatory opportunity
The immediate state-level opportunity lies in Maharashtra’s proposed Clinical Establishments Act. The state is in the process of drafting such legislation, according to the report. Since pricing is a subject in the Concurrent List, the experts cited by the Indian Express said Maharashtra could potentially include provisions regulating the mark-up on medicines and consumables supplied by hospitals.
The proposal discussed by the experts is a ceiling of no more than 30 per cent over the procurement price. This is presented as a possible provision, not as an existing rule. Its effectiveness would depend on how procurement prices are defined, what products are covered, how hospitals maintain records and which authority audits compliance.
The JSA has also raised concerns with Maharashtra FDA Commissioner Tukaram Mundhe. Dr Shukla said the FDA Commissioner’s office could issue orders requiring hospitals that supply medical consumables above a specified unit price to disclose the procurement price alongside the selling price. The intended result, he said, would be greater transparency about the actual cost of products and the price charged to patients.
This approach would shift regulation from a purely final-price dispute to a disclosure-based system. Patients would be able to see the relationship between procurement and sale prices, while regulators would have a basis for identifying unusually high margins. But disclosure alone would not necessarily control prices. It would need to operate alongside a clear margin rule, accessible complaint process and enforcement mechanism if it is to provide more than information after a bill has already been generated.
The proposed state action also highlights the divided institutional landscape. The Clinical Establishments Act creates one possible route for regulating clinical establishments and charges. The Food and Drug Administration has a role in medicines and medical products. The Supreme Court’s questions have placed pressure on the government to examine trade margins and hospital pharmacy practices. For patients, however, these institutional boundaries are not visible when a bill arrives. The effectiveness of the system will depend on whether these authorities can produce a coherent set of obligations.
## From legal framework to enforceable protection
The central lesson from the dispute is that regulation cannot stop at registration or licensing. A patient-facing system would need to address at least three linked questions: what a hospital may charge for services, how much it may add to the procurement cost of medicines and consumables, and whether the patient can choose an alternative supplier.
The campaigners’ demand for government-determined ranges of charges reflects the first question. The proposed margin cap and procurement-price disclosure address the second. The demand for freedom to purchase medicines and consumables outside the hospital addresses the third. Together, they describe a regulatory model that treats the hospital as both a provider of clinical services and a significant point of sale for medical products.
The available report does not establish whether the central or state governments have accepted these proposals, whether a draft Maharashtra law contains the suggested 30 per cent limit, or what timeline exists for implementation. It also does not provide a national database of hospital charges or a comparative analysis of prices across public, private and charitable facilities. Those gaps matter because regulation requires a reliable evidence base as well as legal authority.
Still, the institutional failure identified by the organisations is clear from the facts presented: the Clinical Establishments Act was passed more than a decade ago, yet the groups say it has not produced effective control over private hospital charges. The current debate therefore concerns implementation, not merely the creation of another policy document.
For urban residents, the issue is especially significant because private hospitals are embedded in the everyday service infrastructure of cities. When public hospitals cannot meet all treatment demand, private facilities become a critical part of the urban healthcare system. The affordability and transparency of those facilities affect whether households delay treatment, incur debt or accept charges without being able to assess them.
The next stage will depend on what Maharashtra includes in its proposed Clinical Establishments Act, whether the government acts on the Supreme Court’s concerns about hospital pharmacy margins, and whether the FDA or another authority requires procurement-price disclosure. Until those steps are defined and enforced, the legal promise of regulated clinical establishments will remain separate from the patient’s experience of receiving and paying for care.
