Public hospitals in the State are on the verge of a slippery slope as shortage of drugs in general supply is aggravated by an acute shortage of funds for even making local purchase of drugs, affecting the day to day administration of many institutions.
A glance at the huge pending payments due to public hospitals from the government, running into hundreds of crores of rupees, is a clear indication of the crisis escalating in public hospitals.
By the government’s own statement in the Assembly, the money that it owes to public hospitals by way of reimbursement for free treatment given to beneficiaries under various schemes runs to ₹1,354 crore. This is a liability that the government has run up over and above its health budget for 2023-24 (₹9,939 crore) and is around 13.5% of the total allocation.
Karunya Arogya Suraksha Padhati (KASP) overdues alone account for ₹1,128.69 crore and that of Karunya Benevolent Fund ₹189.28 crore. The domino effect of KASP in pushing government hospitals into a deeper crisis, on top of a drug shortage, has been immense.
“The general supply of indented drugs from KMSCL to hospitals has been badly affected because of government’s pending payments to drug firms. In previous years, even during a drug shortage, we could hold on with local purchases because the hospital development societies (HDS) were flush with funds from the reimbursements from KASP. However, the KASP overdues have piled up so much that many HDSs have no more funds to afford local drug purchase or even pay salaries to their contractual staff,“ the superintendent of a major public hospital said.
“Earlier, hospital administrators were not worried because the KASP funds would flow in eventually and in the interim, they could manage with HDS funds. Given the current fiscal crisis, we are almost sure that no more funds would be forthcoming from KASP. We have no means of paying off the crores that we owe Karunya outlets or our suppliers of stents and implants. Hospitals today have no funds of their own for any development activities, thanks to the government’s non payment of KASP overdues,” he added.
It may be recalled that the Comptroller and Auditor General’s (CAG) audit report in 2023 August had pointed out that KASP was being run by the State Health Agency (SHA) (the implementing agency for the government) without scrutiny or financial discipline.
The fact that KASP is unsustainable in its present form and that it is pushing public hospitals to the brink of financial ruin has been consistently ignored by the government.
A much deeper financial crisis is being foreseen for public hospitals, with the SHA reportedly moving to introduce “differential financing” for public hospitals by reducing the beneficiary treatment package rates of governemnt hospitals by 30-40%.
This bid by the SHA to tide over the crisis of its own making by slashing the payouts to government hospitals could be the last nail in the coffin for many institutions, it is feared.
