Private/Corporatised Healthcare in India

Health check for corporate hospitals

Devastating fires are only one part of the management of private/corporate hospitals. Thanks to the self-promoting glitz and chutzpah surrounding them, they are, in fact, the blind spot of both the governments and the people, as regards accountability and transparency. Occasionally, someone somewhere who has been the victim of their blunders or exactions, bursts out in exasperation as, for instance, in the following blog by a distinguished professor:

“The corporate hospitals scare the life out of a patient as part of the milking process. Most of the drama of treatment that goes on is just to empty your pockets and to fill theirs….We've given them power they don't deserve and respect they haven't earned.”

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Here is an extract from an article by Dr Sumanth C.Raman, published in The Hindu of January 15:

“….no one really knows if the quality of care in these hospitals is as good as claimed as there is simply no organisation or body, government or private, that is measuring it. Almost none of these ‘centres of excellence' are willing to publish their outcomes or put up the results they get (with the patient risk stratification) on their websites as is done abroad. Browse through many major hospital websites in the developed world and you can check for yourself what their risk adjusted mortality rates are, their readmission rates, their infection rates, their quality indicators and attainment percentages for specific conditions like a heart attack, stroke and the like, their patient safety indicators, etc. Almost none of our corporate hospitals provide this information. Many do not even have the systems in place to measure these.

“All we have to go by is the assertion by these hospitals themselves through the glitzy ads we see in the media with an emphasis on the certifications they have received….(from) JCI Certified (Joint Commission International) or NABH (National Accreditation Board for Hospitals).….However, what these quality organisations evaluate is predominantly the capability of these hospitals to deliver quality care and not the actual delivery of quality care…”

And I thought this was really amusing, in a fiendish sort of way: 

I was actually present during the visit of JCI to a much hyped hospital for renewal of its accreditation. Normally, this hospital swarms with milling crowds making for unconscionable delays in attending to patients by doctors and the laboratory staff.

Just to dress it up for the JCI visit, the Chairman himself led his senior aides to drive the patients out and empty the corridors, so that everything looked swanky and picture-perfect.

But I believe health tourism is doing wonders for these hospitals.  So much so that practitioners are pressurised to take up the tourists on priority basis.

I always say - hand over everything to the private sector.  They will always do the best job.  Yes.

Mr Tata, How To Buy Myself An Aquifer in the Himalayas?

For he must surely know the procedure, owning one himself.  How cool is that - an aquifer all to oneself in the Himalayas, the water from which can be sold for the same price as diesel without all the hassle that the latter entails.  I believe diesel can be a bit more difficult to source and all, though I may be mistaken.  

These big industrialists hold all the aces, don't they?  

Hear it from the man in charge, R. K. Krishna Kumar, a Director in Tata Sons: 

We want to partner PepsiCo to distribute Himalayan widely. They have the liquid bottle distribution strength. We don't have that. We can tap that strength to take Himalayan to international markets. Hopefully soon, we will take it to one or two countries. A product like Evian is a source product. Given the uniqueness of the water sources, there is no reason why Himalayan can't be taken to other markets and compete with brands such as Evian. The source, our aquifer in the Himalayas, is a unique source. We have vast reserves. We can tap it, bottle it and make it a global brand.

(Emphasis mine)    So how do I get hold of an Himalayan aquifer?  Once I do that, the next steps are so simple: tap it, bottle it and sell it for a song after entering into a Joint Venture with a global giant:

Tata Global Beverages and PepsiCo India have joined hands to make a foray into nutritious beverages space.

The two have already floated a new company by the name and style of NourishCo.

The joint venture rolled out its first product, Tata Water Plus, on Thursday here at a press conference. Claimed to be the country's first nutrient water, Tata Water Plus is priced at Rs.16 for a 750 ml Pet bottle.

...

“It is taste neutral. It looks and tastes like normal water but with added goodness of nutrients that are bio-available,” says a release.

It had also brought the top-end natural mineral water brand Himalayan (priced at Rs.40 a litre) into the NourishCo fold.

Note the Rs.40 a litre in the last line.  Now, about that nutrient water.  Bio-available doesn't mean what it sounds like.  It does not mean that it comes naturally in the water.  It basically refers to how much of the nutrient can be absorbed by the body.  So I now get a sneaking suspicion that the water is "taste neutral" and "tastes like normal water" because that is what it is - normal water.  Swindle anyone?

Anyway, it is nice to know that our largest industrial conglomerates are on the job of lifting the country out of poverty.  Rs 1L+ nano and Rs.40/litre water and so on.  Hang on, a more affordable tractor would have helped more, you say?  I think you're just jealous of the Tatas.

Spectrum Auctions Not The Way To Go

By far the most interesting take on the 2G decision by the Supreme Court comes from a pink paper:

2G Scam: Supreme Court’s cancellation of 122 licences is mostly unfortunate

The Court posits auctions as the only acceptable method for fair and transparent allocation of national assets. Why ignore a draw of lots among financially and technically qualified aspirants? It equates national enrichment with the proceeds of auction.  

This is a simplistic assumption devoid of economic analysis. Low-cost telecom spreads fast, increasing, with each additional connection, the utility of being connected for everyone on the network. The result is efficiency and productivity gains across the board, leading to faster economic growth. Crores of lives improve and the government nets superior tax receipts, far in excess, over the years, of auction proceeds. Auctioned spectrum jacks up the telecom industry's capital costs, which will either raise tariffs or delay further expansion and upgradation. 

In any case, what sense does it make to transfer huge investible resources from industry to the government? 

So auctions are not the bestest methods of all?  And they tell us only now?  So sad.  But the pink one need not worry.  Our telecom guys have a neat trick through which huge auction prices can be whittled down to manageable amounts:  just take the money from our public sector banks, discussed in The 3G Scam?

Corporate Subsidies Anyone?

Coal India puts off price hike on key users' protest

NEW DELHI, JAN 31: 

Buckling under consumer pressure, Coal India Ltd has rolled back the price hike proposed under its new Gross Calorific Value-based pricing mechanism effective January 1.

Coal India will delink the rates from international parity prices, said Mr N. C. Jha, Chairman. This would eventually reduce the prices for different grades of coal. However, the GCV-based grading of coal will continue and the anomalies in the pricing structure will be set right, he added.

Coal India switched to the GCV-based pricing mechanism in line with the international norms and had proposed an average of 12.5 per cent hike in prices.

This had evoked strong protest from consumers in sectors such as power, cement, steel and aluminium. In the earlier Useful Heat Value (UHV) method, the pricing was decided on the ash and the moisture content in coal. 

The Profit Motive

Over in the US, an utility in the private sector commits hanky-panky.  PG&E diverted safety money for profit, bonuses

Pacific Gas and Electric Co. diverted more than $100 million in gas safety and operations money collected from customers over a 15-year period and spent it for other purposes, including profit for stockholders and bonuses for executives, according to a pair of state-ordered reports released Thursday.

An independent audit and a staff report issued by the California Public Utilities Commission depicted a poorly led company well-heeled in its gas operations and more concerned with profit than safety.

The documents link a deficient PG&E safety culture - with its "focus on financial performance" - to the pipeline explosion in San Bruno on Sept. 9, 2010, that killed eight people and destroyed 38 homes.

 But privatisation will always work.  Yes.

Why Not Restructure Farmers Loans Too?

Pretty damning coming from a banker.  Why no ‘CDR’ for farm loans?

But as our public policy discourse and chat-shows are predominantly urban and corporate-oriented, these [farmer] suicides have neither shocked nor shamed the policy-making establishment. That includes even the banking sector. Anybody with anything to do with this sector ought to feel vicariously culpable in the withering away of so many lives on this issue.

CORPORATES FAVOURED

This casual indifference is in marked contrast to the way corporate indebtedness is grabbing all the attention and focus, what with the travails of sectors such as aviation being played up in the media. The humdrum farm sector does not have the same glamour quotient and is, therefore, condemned to be the poor country-cousin in any national-level discussion.

The media, including the financial dailies, is no less guilty here, as there is little attempt on its part to go into the details of individual farmer suicides or see it as a reflection of the state of our agriculture.

The lopsidedness of our policy priorities comes out clearly when one looks at the kind of efforts being made at addressing financial distress in the corporate sector.

According to reports, the first half of the current fiscal alone (April to September) has seen restructuring of corporate loans totalling some Rs 34,560 crore under the Corporate Debt Restructuring (CDR) mechanism. And this does not include the mega liabilities owed by the big airline companies. 

The important thing here is that there is an established Reserve Bank of India-approved mechanism when it comes to dealing with issues of corporate loan delinquencies.

These involve extended moratoriums (during which no repayments at all need to be made), elongation of the repayment period itself up to 10 years, reduced rates of interest, provision of ‘funded' interest term loans to those unable to service even the interest component, conversion of cash losses on working capital into term loans, additional finance, and even conversion of debt to equity.

It is quite the opposite in respect of agricultural debt relief. Although there are serious systemic issues plaguing the farm sector, problems of indebtedness meet with sporadic or knee-jerk response at best. And whenever a relief package is announced, it tends to go to the other extreme of fostering or encouraging a culture of non-repayment, that too, among people with a credit morality much higher than those in the corporate sector. We have seen this happen even in the course of the Agriculture Debt Waiver and Debt Relief Scheme of 2008.

What the agriculture sector actually requires is not one-time waivers and write-offs as much as an institutionalised structure similar to the CDR mechanism, so that lenders have a regulator-approved route map ready when they deal with the problem of a farmer unable to service debt. 

The Kingfisher Scam?

I wrote about public sector banks shoveling money to the telecom operators in this post:  The 3G Scam?.  Now we read this:  Kingfisher Airlines is NPA for us, says SBI chief.

New Delhi, Jan. 5:  

The State Bank of India said Mr Vijay Mallya-promoted Kingfisher Airlines has turned a non-performing asset (NPA).

“Kingfisher is an NPA for us. They are in default,” Mr Pratip Chaudhuri, SBI Chairman, told reporters here on Thursday.

SBI is the lead bank in the consortium that has funded this private airline. The country's largest commercial bank has an exposure of Rs 1,458 crore to Kingfisher Airlines, which is in a weak financial position and struggling to service its loans.

The other banks with significant exposure to Kingfisher Airlines are IDBI Bank at Rs 727 crore, Punjab National Bank (Rs 710 crore), Bank of India (Rs 575 crore) and Bank of Baroda (Rs 537 crore).

Just add up those numbers:  Rs 4000 crores has been given by our public sector banks to one private company which has blown it away.  The biggest bank has already declared its loan as an NPA.  Is this any different from a scam?

When will RBI make it mandatory for banks to reveal the full details of their NPAs and who owes them the money?

$121 Billion Went Out In The Last Decade Via Trade Mispricing

I'm sure the politicians forced them to misprice because, as we all know, only the politicians are corrupt.

$128 billion siphoned out of India in a decade

 if an exporter understates the value of goods actually exported in relation to the imports recorded in the importing partner country and keeps the balance of funds abroad, that too is an illicit outflow. International trade data reveals such mispricing by comparing data from partner trading countries.It is this type of jugglery that accounts for the bulk of illicit flows in India - worth over $121.65 billion (Rs 5.8 lakh crore) or almost 95% of the total.

Corporates and Fin Min Officials Interfering in SEBI?

Ah, The Invisible Hand is fleetingly seen before it vanishes into the deeps.  

PMO declines to disclose former SEBI member’s letters

New Delhi: The government has declined to disclose two letters written to prime minister Manmohan Singh by former Securities and Exchange Board of India (SEBI) member KM Abraham, who had alleged in another communication, interference by some corporates and top finance ministry officials in the working of the market regulator, reports PTI.

Replying to a PTI request for the letters under the Right to Information Act, the Prime Minister’s Office (PMO) cited a clause that bars disclosure of any information that “would lead to unwarranted intrusion of the privacy of the individual”.

The PMO was asked to provide copies of three letters by Mr Abraham to Mr Singh, along with the action taken report. However, the public authority provided a copy of only one of the three letters, dated 1 June 2011, written by the former SEBI member.

The others two communications—sent on 16th May and 24th June this year—were not provided to the applicant.

In his letter dated 1st June, Mr Abraham had alleged that some corporates and finance ministry officials were exploiting the vulnerability of the market regulator, which was investigating crucial cases involving prominent business houses. 

"Mukesh Ambani in talks to buy Network 18: WSJ"

Mukesh Ambani in talks to buy Network 18: WSJ

MUMBAI: Mukesh Ambani, the chairman of Reliance Industries, India's biggest conglomerate, is in talks to buy Network 18, the television and internet company, the Wall Street Journal said quoting people familiar with the situation. 

Ambani, the paper said, has been in talks with Network 18 founder and controlling shareholder Raghav Bahl on the issue. 

"The talks may yet lead to nothing. It also isn't clear what the value of Ambani's investment would be and whether he is operating on behalf of Reliance Industries or whether he would put his own cash into a deal. Network18 Media and Investments, the holding company for the conglomerate, has annual revenue of about $300 million but isn't profitable," said the paper. 

Relatedly,  Media Consolidation: The Illusion of Choice 

Update: RIL denies it.  But a nice pop of around 9% on almost 20 times yesterday's volumes, till now.  Who sold out?

The 3G Scam?

Banks nervous about telecom exposure

They need to be.  Their exposure is almost 1 lakh crore.  Half of that may be on account of loans to the winners of the 3G auction.  So one can argue that the auction only fetched half of what is claimed, at present.  And PSU banks - implicitly backed by the government - funded a large part of the 3G auction amount as the report points out.  SBI itself has an exposure of Rs 23,000 crore.  What if the loans go bad as some are already?

No wonder one never hears calls for privatisation of PSU banks. They are sitting ducks for industry to get loans from.

Govt Won't Reveal Names of Overseas' Account Holders

Govt won’t reveal black money a/c holders’ names

Mukherjee said some countries may refrain from sharing further information if the names were made public as it would amount to violating the information sharing agreement with them. “We will dry up our source of information,” Mukherjee said, adding some of the account holders could even withdraw money if t he names were publicised.

“I have to ascertain, some of them may be genuine account holders, who have got permission from the RBI. They may be investors, we will get publicity but it will harm their businesses, it will have an impact on industry,” he said.

But the agreements wouldn't surely preclude us from publicising names if tax-evasion is detected?  Pictures of top film stars used to be splashed liberally on the front pages of our newspapers for this very reason?

As for them being investors, surely there is no harm in revealing their names if the money is legal?  Even if they are investing in their individual capacity, what is the harm in publishing how much they have abroad.  The wealth of most top businessmen is well known through the various rich lists, like Forbes Richest Indians etc.  If they are investing as companies, then too it should not be a problem.  Companies in any case put all investment related information as well as all their bank deposits in their public filings with SEBI.  This argument doesn't wash.

Also,

Mukherjee said that the government has received 36,000 pieces of information on monies stashed in accounts in foreign countries, but made it clear that no Member of Parliament figured in the list of names obtained from abroad. He clarified that no Member of Parliament so far figured in the list of the foreign bank account holders available with it.

FICCI Asks For Amnesty For Black Money?

Actually, no.  It asks for reforms.

FICCI pushes for new reforms in Budget 2012-13

NEW DELHI, DEC 14:   In the backdrop of falling rupee and overall downward industry sentiment, FICCI pushed for initiation of new reforms to widen direct tax net and give one time amnesty scheme to Indians to bring back overseas money, among others.

Now, that is some "reforms" package.

Help The Billionaires, The Poor Dears

India's billionaires talk of getting out 

“I’m sick and tired of what’s happening here. I don’t want to live in this country anymore,” said one of India’s biggest barons. 

My heart bleeds for these people, as every right-thinking Indian's would.

Also, at the same link, this: Why put CEOs in jail: Rahul Bajaj.  Indeed, why?  It's not as if they are going to influence anyone.  Has anyone ever heard of such a thing happening in India?  No way.  

So our billionaires are downbeat on India and are setting up house in upmarket 'ghettos':

In the past year, many highprofile Indians have bought homes in London’s toniest neighborhoods. Bharti’s Sunil Mittal, who purchased a home in Grosvenor Square a few months ago, is spending more time working out of there to keep up with the firm’s global needs. The Munjals are said to have bought two homes in Kensington. DLF’s K P Singh, Essar’s Ravi Ruia and Sahara’s Subrata Roy often live and work out of the city that once ruled India. Real estate circles in London often refer to the Berkeley and Grosvenor Square areas as upmarket ‘Indian ghettos’. 

Says a former top banker based in London, “Cities like London and Singapore are safe havens and the rule of law is clear. There is a sense of individual security and privacy.” 

Ajay Piramal of Piramal Lifesciences has also bought himself a sprawling home in London, although he isn’t shifting base. He points to India’s problems: “You don’t know what regulation is going to hit. Sometimes it is not even rational. Very old cases are being pulled out. This doesn’t give you a sense of certainty.” 

Old cases being brought, so the captains of Indian industry are going to 'safe havens'.  Very interesting.

ICICI chairman K V Kamath puts things in perspective:

Animal spirits are clearly at a low right now, acknowledges ICICI Bank chairman KV Kamath. “Negativity as a whole pushes you down,” he says, adding that he has seen such trends every time the country has been hit by a slowdown in the last 40 years. 

A banker says that of his top 100 clients, 75 are sulking and say they have no incentive to offer to potential investors. It’s a far cry from the ebullient Indian promoter, hungry to buy assets and expand, that one had got used to.

Of course.  What was that saying?  The tough leave when the going gets tough? 

"Black money trail: Indian companies still parking funds in tax havens"

Black money trail: Indian companies still parking funds in tax havens

The top 10 investment destinations for Indian companies in the last three years are all tax havens, if the US and UK which figure at number 4 and number 8, respectively, are discounted.

The statistic, released by the finance ministry, reinforces the belief that the government has failed in curbing the flow of black money out of the country.  Around 40% of the total investments in these three years have been in real estate, insurance and financial instruments, where it is very difficult to establish purchase value of such assets.

Good for the stock market I bet.

Low-cost The Way To Go?

Why some airlines are more profitable

Consider the figures: The two low-cost airlines IndiGo and SpiceJet reported profits of Rs 550 crore and Rs 61 crore in 2009-10. On the other hand, Kingfisher Airlines reported a loss of Rs 1,647 crore and Jet Airways reported a loss of Rs 420 crore. Again, in 2010-11, while Jet and Kingfisher posted losses, SpiceJet and IndiGo remained profitable.

Read the article to see why. 

Yella OK, Airline Yaake?

Why did he have to start an airline?  

As a consequence of Thursday’s flight cancellations, including 40 from Bangalore, hundreds of passengers were left in the lurch. There was chaos in several airports all over the country as Kingfisher passengers were told of their flights’ cancellation on reaching the airport. With their fares not refunded, the passengers had to book tickets with other airlines at exhorbitant rates to reach their destinations. 

He had to take out Deccan too.  All for this?

There were also reports that the airline, which has been struggling to stay afloat for long, had defaulted in payments to international aircraft lessors and some of them have sought to impound the planes. However, the airline has denied such a move. 

Kingfisher has suffered a loss of Rs 1,027 crore in 2010-11 and has a debt of around Rs 7,050 crore. 

His pilots are having fun. Those that left at least.  Training pilots with a planeload of people:

On September 18, a KFA flight from Delhi made a rough landing in Bangalore giving a jolt to the passengers late evening.  

And its (Airbus 8321) Captain, Salaluddin had announced: “Sorry for the harsh landing ladies and gentlemen, I was training my under-officer (Gaurav), he will get the hang of it soon.”

I hope for the sake of the passengers that he does.