'Misery Day' against service tax hike in hospitals

The healthcare industry continued to react strongly to the proposed service tax hike in the budget with Devi Shetty, one of the country's renowned heart surgeons, writing an open letter calling the levy "unfortunate" and seeking observance of March 12 as 'Misery Day' to protest it.

Shetty, founder of Narayana Hrudayalaya, a hospital chain specialising in cardiac care,
said in the letter published in newspapers: "A patient undergoing a heart surgery would have to pay Rs.5,000 to Rs.10,000 more with the introduction of the proposed service tax. If the patient suffers from cancer, this tax will be anywhere in excess of Rs.20,000."

Shetty urged citizens to assemble at the governor's house of every state at 11 a.m. March 12 with a petition seeking the rollback of the proposed tax.

"Not a single operation theatre or blood blank can legally function without air conditioning," added Shetty, referring to the implications of the hike that referred only to private air-conditioned hospitals.

Terming the tax as the 'Misery Tax', Shetty said it was wrong to assume that the hike will affect only the rich.

"No surgery, simple or complex, can be performed without an air-conditioned operation theatre. Legally, a blood bank cannot get license without air-conditioning. CT, MRI and catheterisation labs do not function without air-conditioning," he said.

The open letter, published in national newspapers, also mentions that India spends less than 1 percent of its gross domestic product (GDP) on healthcare.

"It is the government's duty to provide us with affordable healthcare instead of increasing the cost by adding more taxes," Shetty said.

Private hospitals had earlier criticised Pranab Mukherjee for the hike.

"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, chief executive officer and managing director of Max Healthcare.

Prathap Reddy, chairman of the Apollo group of hospitals, said in a statement: "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."