Kussi Amma Sera had walked into the OPD of a private Colombo hospital and was slapped with a near 2500-rupee bill for consultation and hospital charges. The drugs from the hospital pharmacy cost another 3,000 rupees. “Buddu Ammo” was her gut response, when describing her recent experience to her friend, Serapina, as they sat in [...]

Business Times

Bitter pills


Kussi Amma Sera had walked into the OPD of a private Colombo hospital and was slapped with a near 2500-rupee bill for consultation and hospital charges. The drugs from the hospital pharmacy cost another 3,000 rupees.

“Buddu Ammo” was her gut response, when describing her recent experience to her friend, Serapina, as they sat in the garden this Thursday morning.

Her experience is a common one. Everyone complains about the cost of drugs and if you have to get admitted to a private hospital, then you come out cured (of whatever illness you had), but with a big hole in your pocket.

The cost of drugs, medication and private hospital charges is a slow killer in Sri Lanka. Slow in the sense that you pay with your credit card and then watch as it eats up your bank balance or whatever is left.

The debate over the high cost of drugs has been going on for many years and came to a head nearly two years ago when the Government introduced a controlled price mechanism for certain drugs. Ever since then, drug importers – the pharmaceutical industry — has complained of losses and expressed concerns over being forced to pull out. Defending the action recently, when another set of drugs was brought under price control, health authorities said that the importers didn’t pull out as threatened when the first list of drugs was controlled and unlikely to do so, since they still have a profit margin – albeit at a lower level.

Over the years, the public has been outraged at the cost of drugs and joined the authorities in condemning the high costs which was one of the reasons why the Health Ministry stepped in and enforced price control through a maximum retail price structure. Adding to the debate are Government plans to control or set benchmarks for hospital charges, which have triggered opposition from hospitals and consultants.

Pausing for a moment while writing this column, I could hear snatches of the conversation between Kussi Amma Sera and Serapina, who had been joined by Mabel Rasthiyadu. “Ispirithale giyoth, apey ge vikunande wenawa bil-eka gewanda (If we get admitted to a private hospital, we may have to sell our house to pay the bill),” complained Serapina.

The phone rang. It was Koththamalli Fernando, the Kokatath Thailaya (oil for any ailment) expert who has a remedy for any issue, on the line. I envisaged a long conversation, and reluctantly greeted him with “Hi”.

“I say, the private hospitals are complaining about the proposed maximum charges they can levy on patients, saying it’s not viable.”

“So what about it,” I asked.

“Everyone complains about the high cost in private hospitals. Just the other day, a friend told me how he had to fork out a bill for 300,000 rupees after a 2-day stay in a hospital. How can people afford this?” he said.

Continuing, he added: “There seems to be a revolution taking place in Government hospitals in terms of facilities and speed of delivery. If that happens, patients who sought private hospitals for convenience, may return to Government hospitals and teach these private hospitals a good lesson.”

“According to media reports, in one state hospital you can book a number for OPD treatment on the phone and then turn up at the hospital at the designated time. No need to stay in queues,” he said.

Adding to the positive approach by Government hospitals, I said: “Recently I went to a new unit at the National Hospital in Colombo and was amazed at the waiting room which was orderly, friendly and with no rush. It was even better than a waiting room in a private hospital. There were bowls of flowers giving it a pleasant atmosphere while the nurses and attendants were cordial and friendly – which sometimes you won’t get in a private hospital.”

If Government hospitals step up their services in a friendly and amiable manner with no queues (with the introduction of the booking service) and better wards and less overcrowding, private hospitals would be forced to bring down prices based on the demand and supply concept. Half the patients who access services in private hospitals would welcome returning to state services if there is no overcrowding and if there are sufficient beds and clean toilets.

On the other hand, in fairness to private medical care and consultation, private hospitals and consultants have been providing a service since Government hospitals were buckling under the demand. Not all hospitals can be accused of over-charging patients and not all consultants can be accused of making money at the expense of patients. There are consultants who are humane and often don’t charge patients who struggle to pay the consultant fees or have come a long distance to consult a reputed physician or surgeon.

On the issue of drugs too, the Government may be unfairly taxing drug importers and distributors who have been battered by rapid exchange rate fluctuations.

Recently, the pharmaceutical industry said that some companies suffered an exchange loss totalling around Rs. 3.2 billion in 2017/2018 apart from lower revenues due to the Government’s drug pricing policy.

They said that April-June 2018 alone, two major (manufacturers and importers) lost around Rs. 1 billion after the dollar surged to Rs.160 per dollar.

“Cost and affordability should not be the only consideration when reducing prices, the quality is also important and when it comes to generics we don’t have proper quality assurance,” one industry official was quoted as saying.

The industry came together this week too, to explain to the media on mounting losses due to the price control mechanism.

President of the Sri Lanka Chamber of Pharmaceutical Industry, Shyam Sathasivam, told reporters that when the quality of medicines is compromised, it becomes a risk factor to patients.

Cheaper drugs don’t mean the patient gets cured since the quality of drugs, in the absence of proper testing facilities, becomes questionable.

“As 85 percent of the pharmaceutical products are imported, the exchange rate impacts significantly on the pricing formula of pharmaceuticals. That affects local stakeholders, importers, distributors and retailers,” he said. The dollar was pegged at Rs. 130 in early 2014 (when drug prices were frozen) and further devalued when prices were reduced in October 2016. Last week, the dollar was trading at Rs 162-Rs.163, a near 25 per cent devaluation since end 2014.

The industry is complaining that the exchange rate fluctuations are not accounted in the compulsory pricing mechanism and has called for a reasonable solution, which is a fair request.

Rather than ad hoc formulas and taken in isolation – drug prices, hospital charges and consultation fees — the whole health care system needs a complete overhaul looking at it from a holistic care perspective. Stepping on the pedal to rein in runaway drug prices (a problem no doubt), bringing in controlled pricing in private hospitals (another problem no doubt) and bringing in maximum consultation fees (yet another issue), are unlikely to solve the problem, if dealt with separately.

At the risk of being accused of promoting yet another committee (these don’t work because they produce recommendations which are rarely implemented), there is a need for a comprehensive review of Sri Lanka’s healthcare system and pricing mechanism so that it caters equally to those who can afford and those who can’t.

Maybe even a health insurance scheme with a small premium based on a person’s ability to pay can help improve services at state hospitals for the likes of Kussi Amma Sera and her friends, while at the same time also increasing wages of staff.

Share This Post


Advertising Rates

Please contact the advertising office on 011 - 2479521 for the advertising rates.