Healthcare financing systems world over are grappling with a complex set of economic and ethical challenges. The introduction of penalties, fines, and price caps has become standard policy tools to address some of these difficulties. The assumption is that creating such deterrence around decisions will modulate the behaviour of various players in the desired manner. The aspect of modulating the behaviour of key agents in an economic system towards desired directions has been the point of some analysis. The fundamental hypothesis is that when the regulators impose penalties or negative consequences on a particular way of doing the things, there would be an immediate effect on that individual behaviour and actors will strictly follow the pronouncement. The actual behaviours, in fact, observed suggest that imposing adverse consequences or limiting the behaviours may not last long and in fact, their impact will be temporary. Keeping rest of the eco-system unchanged around these decisions, such interventions lead to actions and decisions that may not conform to the desired behaviour.
Non-compliance of National Pharmaceuticals Pricing Authority (NPPA) order on pricing cap of cardiac stents suggest that any manufacturer or institution or person not complying with the ceiling price shall be liable to deposit the overcharged amount along with interest thereon under the provisions of the Drugs (Prices Control) Order, 2013 read with Essential Commodities Act, 1955. The ceiling price fixed as specified in the order shall be maintained for a period of one year from the date of this notification unless revised by another gazette notification. The severity of the fine and its behavioural implications are debatable.
Any analysis and implications of any economic regulations will need a detailed and complete specification of market forces. In the marketplace, there are demand and supply forces at work, and several agents engage in making decisions. Price-cap, after all, will be just a new price in the marketplace. Each such intervention needs an ecosystem to establish its enduring impact, as there are several drivers at work. Of course, the severity of punishment, which creates the fear factor, would be crucial, but besides a fear factor, the effectiveness of measure also depends on several of these forces at play.
The promulgated regulation is more associated with profiteering behaviour than creating a stimulus for ethical practices. The introduction of price caps alters the perception of people regarding the environment in which they operate. The penalty imposed in the order may alter the perception in the following way: (a) Provider side perception: The hospitals were charging for the cost of operation in a particular way, and in future, they will do that activity in the same manner. For providers, the deviation may have a cost (regarding reduced image and goodwill). Maintaining their image has a price, and they do not mind paying this price. (b) Patients side perception: The way the information about the stents have been played and the tag that higher priced stents are better, patients’ perception may suggest that what is provided is justified. This social interaction of provider-patient and norms surrounding their relations may have limitations on bringing down the overall costs.
There is a need to address the fundamental problem – the problem of defining the output and creating a stimulus for appropriate pathways and protocols. Since the aspects of care and its delivery remain loosely defined, these can be molded in any manner at various levels. There is no guilt or shame (depending on the degree of internalization of the social norm) that can be attached to the act of buying a service at will. Since various parameters of the decision remain unchanged; its effectiveness will be debatable. The price cap affects just one parameter in the whole process of decision making. And just to reduce their preferred level of deviation in this regard, one would be free to change other parameters of the game.
No comments:
Post a Comment