Healthcare budget a put off: Private hospitals

NEW DELHI - Terming as “unfortunate” the hike in service tax for air conditioned private hospitals, two such premier institutions said they were not impressed by the budget for 2011-12 presented Monday by Finance Minister Pranab Mukherjee.

“It is unfortunate that the finance minister has chosen to levy a service tax on air-conditioned hospitals having a bed capacity in excess of 25 beds. This comes at a time when the healthcare sector is already bearing the brunt of an inflationary spiral since the last few months,” said Pervez Ahmed, CEO and managing director of Max Healthcare.

It was the patients who were likely to bear the brunt of the hike in service tax, healthcare firms said.

“The budget has levied service tax on hospitals and diagnostic service providers and with this the end user, the patients, will end up paying much more than earlier. This is detrimental to the concept of preventive healthcare and early diagnosis which is pivotal to address the mounting burden of chronic diseases,” said Prathap Reddy, chairman of the Apollo group of hospitals.

“We will be forced to pass on this tax to the patients, something that will certainly cause a lot of heartburn amongst our customer,” added Ahmed.

Commenting on the budget, Reddy said in a statement: “Yet again, initiatives to reform the healthcare agenda have gone unanswered in the union budget. Though the budget had a significant allocation for infrastructure, not finding healthcare takes another year away in bridging the affordability and accessibility gap in our country.”