Times of India
01 March 2011
New Delhi, India

For those suffering from debilitating, life–threatening and chronic diseases, the Union Budget spells more misery. The government has proposed a tax of 5% on all diagnostic tests and also on services provided by hospitals with 25 or more beds having an air–conditioning facility. Industry experts said that this would ultimately be passed down to the patients and result in healthcare becoming more expensive. According to doctors, the worst affected will be those suffering from chronic ailments such as cardiovascular disease, chronic respiratory disease, cancer, diabetes and kidney diseases.

"This is a draconian step. It will affect the middle class and poor patients the most. We demand immediate abolition of this new tax," said Dr Vinay Aggarwal, president, Indian Medical Association. The association sent a letter to the Prime Minister demanding a review on Monday itself. Aggarwal said in Delhi, over 75% of health services are provided by private hospitals.

According to Sangita Reddy, executive director, operations, at Apollo group of hospitals, the service tax will make medical more expensive. "Hospitals are already struggling with inflation. The increased taxes will be passed on to the patients," she said.

Dr Anoop Misra, director of department of diabetes & metabolic diseases at Fortis Hospitals, said that due to increased longevity and lifestylerelated problems, the medical expenses of families have gone up. "In such circumstances, the government needs to promote preventive health check–up and care. But imposition of service tax on diagnostic services will be detrimental. Diabetics, renal failure patients or those suffering from heart diseases need constant monitoring of clinical parameters," said Misra.

"Imposition of service tax on diagnostic services will further increase the cost of treatment. The move has come as a shocker as we were expecting relief from heavy custom duty charged on chemical reagents required for different tests," said Dr Arvind Lal, chairman and managing director of Dr Lal Pathological Laboratories.