Private Medication to Cost More with Increase in Service Tax

The Union budget for the year 2011-2012 has imposed an extra 5 percent of service tax on all the medical services and diagnostic tests provided by all the hospitals which are air conditioned and have more than 25 beds. This increase is being opposed by the patients, managements and associations representing these private hospitals, as they feel that the ultimate burden will have to be faced by the patients, with already 66% of the medical expenditure being made out of their own pockets.

This service tax scheme was applicable only to the patients with insurance coverage and now it’s extended to the normal individual patient without the coverage.

Apart from criticizing this initiative as one of the poor health care financing schemes, the private hospital associations have also raised their voice against inclusion of word “air conditioning” in the statement made by Government, saying that air conditioning is a basic necessity in a hospital for ICU’s and to provide infection proof surroundings and they also said that, medium sized hospitals too have more than 25 beds.

The Hindu