kegu|at|ng the pr|vate hea|th care sector the case of the Ind|an

Consumer rotect|on Act

rlvaLe medlcal provlslon ls an lmporLanL consLlLuenL of healLh care dellvery servlces
ln lndla 1he quallLy of care provlded by Lhls secLor ls a crlLlcal lssue rofesslonal
organlzaLlons such as Lhe Med|ca| Counc|| of Ind|a and |oca| med|ca| assoc|at|ons have
remalned lneffecLlve ln lnfluenclng Lhe behavlour of prlvaLe provlders 1he recenL declslon
Lo brlng prlvaLe medlcal pracLlce under Lhe Consumer roLecLlon AcL (CC8A) 1986 ls
consldered an lmporLanL sLep Lowards regulaLlng Lhe prlvaLe medlcal secLor 1hls sLudy
surveyed Lhe vlews of prlvaLe provlders on Lhls leglslaLlon 1hey belleve Lhe CC8A wlll be
effecLlve ln mlnlmlzlng malpracLlce and negllgenL behavlour buL lL does have adverse
consequences such as an lncrease ln fees charged by docLors an lncrease ln Lhe prescrlpLlon
of medlclnes and dlagnosLlcs an adverse lmpacL on emergency care eLc 1he medlcal
assoclaLlons have also argued LhaL Lhe lnLroducLlon of CC8A ls a sLep Lowards expenslve
daunLlng and needless llLlgaLlon A number of oLher concerns have been ralsed by consumer
forums whlch focus on Lhe lack of sLandards for prlvaLe pracLlce Lhe uncerLalnLy and rlsks of
medlclnes Lhe effecLlveness of Lhe [udlclary sysLem and Lhe responslblllLy of provlng
negllgence Pow relevanL are Lhese concerns? ls Lhe enacLmenL of CC8A really approprlaLe
Lo Lhe medlcal secLor?
1he paper argues LhaL whlle Lhls developmenL ls a welcome sLep we need Lo
comprehenslvely look lnLo Lhe varlous quallLy concerns 1he effecLlve lmplemenLaLlon of
CC8A presumes cerLaln condlLlons Lhe mosL lmporLanL belng Lhe avallablllLy of sLandards
8esldes Lhls greaLer lnvolvemenL of professlonal organlzaLlons ls needed Lo ensure
approprlaLe quallLy ln prlvaLe pracLlce slnce healLh and medlcal cases are very dlfferenL
from oLher goods and servlces
Introduct|on
rlvaLe provlslon of healLh care ls an lmporLanL consLlLuenL of Lhe healLh care dellvery
sysLem ln lndla and lLs role has lncreased conslderably over Llme AL presenL abouL 70 of
hosplLals and 30 of hosplLal beds are ln Lhe prlvaLe forproflL and nonproflL secLor 1hls
secLor employs abouL 70 of quallfled docLors MosL of Lhe newly quallfled docLors prefer
elLher Lo sLarL Lhelr own prlvaLe pracLlce or Lo work ln prlvaLe hosplLals uLlllzaLlon sLudles
show LhaL healLh care servlces provlded by Lhls secLor are used noL [usL by Lhe affluenL
classes a large number of poor people use Lhem and have exhlblLed Lhelr preferences ln an
affecLlng Lhe quallLy of care 1he growlng dlssaLlsfacLlon wlLh Lhe servlces offered by Lhls
secLor and lncreases ln medlcal negllgence cases has aLLracLed Lhe aLLenLlon of Lhe
consumer movemenL ln Lhe counLry rlvaLe medlcal pracLlce has now been broughL under
Lhe Consumer roLecLlon AcL (CC8A) 1986
1hls paper dlscusses Lhe lssue of brlnglng prlvaLe medlcal pracLlce ln lndla under Lhe CC8A
lL addresses Lhe followlng quesLlons arlslng from recenL experlence
- ls a prlvaLe medlcal servlce a Lype of commerclal servlce? Can a consumer of medlcal
servlces seek redressal ln consumer courLs for malpracLlce and negllgenL LreaLmenL?
- Pow have medlcal assoclaLlons and medlcal counclls vlewed Lhe lncluslon of prlvaLe
medlcal pracLlce under Lhe [urlsdlcLlon of CC8A?
- WhaL are Lhe concerns and lssues ralsed ln cases flled wlLh Lhe consumer forums?
- uo prlvaLe provlders Lhlnk CC8A wlll be effecLlve ln lLs ob[ecLlve? WhaL are Lhe
lmpllcaLlons of brlnglng prlvaLe medlcal pracLlce under CC8A?
1he appllcaLlon of CC8A Lo prlvaLe medlcal pracLlce ls consldered an lmporLanL sLep ln
ensurlng LhaL paLlenLs recelve an approprlaLe quallLy of care 1he medlcal assoclaLlons have
noL welcomed Lhls developmenL 1he medlcal counclls have refralned from maklng any
commenL on Lhls AcL 1he flndlngs of Lhe currenL sLudy reveal LhaL prlvaLe provlders belleve
CC8A wlll be effecLlve ln mlnlmlzlng malpracLlce and negllgenL behavlour Powever Lhe
leglslaLlon does have a number of adverse consequences lncludlng lncreases ln fees
charged by docLors lncreases ln Lhe prescrlpLlon of medlclnes and dlagnosLlcs adverse
lmpacLs on emergency care A number of oLher concerns have been ralsed ln consumer
forums durlng Lhe hearlng of complalnLs 1hese concerns relaLe Lo Lhe lack of sLandards for
prlvaLe pracLlce dlfflculLy ln dlfferenLlaLlng beLween mlsLaken dlagnosls and negllgenL
behavlour rlsks and uncerLalnLy ln Lhe medlcal secLor Lhe effecLlveness of Lhe [udlclary
sysLem and responslblllLy Lo prove negllgence Whlle Lhls developmenL ls a welcome sLep
Lhe paper argues LhaL a broad sLraLegy ls needed Lo look aL varlous concerns affllcLlng Lhe
prlvaLe healLh care secLor PealLh and medlcal care servlces are very dlfferenL from oLher
goods and servlces 1he effecLlve lmplemenLaLlon of Lhe AcL presumes cerLaln condlLlons
Lhe mosL lmporLanL belng Lhe avallablllLy of sLandards We suggesL LhaL Lhough Lhe CC8A ls
hlghly deslrable healLh and medlcal cases should be dealL wlLh dlfferenLly from oLher
servlces We also suggesL LhaL Lhe quallLy of prlvaLe healLh care should be vlewed ln a
broader conLexL and aLLempLs should be made Lo address all Lhe lssues rofesslonal
organlzaLlons such as medlcal counclls and medlcal assoclaLlons should have an lmporLanL
role ln Lhls area
1he paper dlscusses Lhese quesLlons uslng crosssecLlonal daLa collecLed from a survey and
lnLervlews of docLors ln Ahmadabad 1he sLudy also uses lnformaLlon relaLlng Lo cases flled
wlLh Lhe naLlonal Commlsslon and SLaLe Commlsslon ln Cu[araL arL l of Lhe paper explalns
Lhe broad purpose of Lhe Consumer roLecLlon AcL 1986 and lLs appllcablllLy Lo prlvaLe
medlcal pracLlce arL n dellneaLes Lhe lssues ralsed ln consumer forums lor Lhls purpose
we have selecLed four cases heard by Lhe naLlonal Consumer ulspuLes 8edressal
Commlsslon new uelhl from 1989 Lo 1993 arL m dlscusses Lhe flndlngs of Lhe survey and
lnLervlews of docLors ln Ahmadabad clLy 1he flnal parL summarlzes Lhe pollcy lmpllcaLlons
of Lhls paper

art I 1he Consumer rotect|on Act 1986
lL ls well esLabllshed LhaL leavlng healLh care Lo markeL forces does noL lead Lo an effecLlve
and efflclenL healLh care sysLem (8enneLL eL al 1994) 1hls ls because a complex seL of
markeL dlsLorLlons and markeL lmperfecLlons lnLeracL wlLh moral hazard problems of markeL
and lnformaLlon asymmeLry leadlng Lhe markeL Lo be lnadequaLe and Lo have hlgh cosLs lL
ls argued Lherefore LhaL Lhe sLaLe has an lmporLanL role ln ensurlng Lhe safe and
approprlaLe dellvery of healLh care servlces from Lhls secLor Powever noL many lnlLlaLlves
have been Laken by Lhe sLaLe Lo regulaLe Lhe secLors servlces Lhough Lhe secLor has grown
slgnlflcanLly As far as Lhe lnLroducLlon of leglslaLlon ls concerned Lhere are only a few
examples of regulaLlons promulgaLed by Lhe sLaLe aL local governmenL levels eg Lhe
nurslng Pome AcLs of uelhl and 8ombay 1he lmplemenLaLlon of Lhese regulaLlons has
always been a problem (nandra[ 1994) and mosL of Lhe provlslons of Lhese leglslaLlons are
now ouLdaLed anyway Slnce healLh ls a sLaLe sub[ecL ln lndla a large number of local
governmenLs have noL lmplemenLed slmllar Lypes of leglslaLlon CLher regulaLlons and
sLandards (eg Lhe urugs and CosmeLlcs AcL harmacy AcL 8ureau of lndlan SLandards
eLc) whlch have lmpllcaLlons for quallLy of healLh care have been lneffecLlve ln regulaLlng
Lhls secLor
1he professlonal bodles governlng Lhe medlcal professlon such as Lhe Medlcal Councll of
lndla are anoLher source of lnfluence on Lhe behavlour of prlvaLe provlders 1hese
professlonal bodles prescrlbe Lhe code of conducL whlch each pracLlslng member ls
supposed Lo observe and ensure LhaL he behaves accordlng Lo Lhe expecLaLlons of Lhese
bodles Cenerally lL ls expecLed LhaL Lhe medlcal professlon wlll work Lhrough self and
peerregulaLlon Powever over Llme Lhe medlcal assoclaLlons and counclls eLc whlch were
expecLed Lo play Lhls role have losL Lhelr lnfluence ln regulaLlng Lhe behavlour of prlvaLe
provlders Also a large number of physlclans are noL acLlve members of Lhese assoclaLlons
and Lhose who are ofLen noL very concerned abouL assoclaLlon guldellnes
As a resulL wlLh Lhe growLh of Lhls secLor Lhe prevalence of cerLaln pracLlces such as fee
spllLLlng overprescrlpLlon of medlclnes and drugs lnadequaLe sLerlllzaLlon procedures and
employlng unLralned personnel has lncreased 1hese undeslrable pracLlces are known Lo
adversely affecL Lhe quallLy of healLh care AparL from unnecessary and lneffecLlve care (as a
resulL of demand lnducemenL) Lhe negllgenL pracLlces cause lmmedlaLe harm Lo Lhe
paLlenL because of noL followlng mlnlmum sLandards or lack of deslrable skllls 1hls has
aLLracLed Lhe aLLenLlon of consumer movemenLs ln lndla 8ecenL leglslaLlve reforms ln lndla
have broughL medlcal servlces provlded by Lhe prlvaLe forproflL secLor under Lhe Consumer
roLecLlon AcL (CC8A) 1986
1he CC8A was promulgaLed Lo proLecL Lhe lnLeresLs of consumers Lhrough Lhe
esLabllshmenL of consumer counclls 1he ob[ecLlves of Lhls AcL are 1) Lo promoLe and
proLecL Lhe rlghLs of consumers 2) Lo provlde a rlghL Lo lnformaLlon and Lo proLecL Lhe
consumer agalnsL unfalr Lrade pracLlces 3) Lo ensure LhaL consumers lnLeresLs wlll recelve
due conslderaLlon aL approprlaLe forums 1hese ob[ecLlves are promoLed by Lhe consumer
proLecLlon counclls esLabllshed aL Lhe dlsLrlcL sLaLe and naLlonal level Speedy and slmple
redressal ls provlded by quasl[udlclal bodles agaln aL dlsLrlcL sLaLe and naLlonal levels
Accordlng Lo Lhls AcL a consumer of servlces ls a person who hlres or avalls servlces for a
paymenL 1hls also lncludes Lhe beneflclary of such servlces oLher Lhan Lhe person who
acLually hlres Lhe servlces Servlces of any descrlpLlon made avallable Lo poLenLlal users are
lncluded ln Lhe AcL 1he purpose of Lhe CC8A ls Lo provlde less cosLly and speedy remedy
Lo aggrleved consumers Lhan Lhe alLernaLlve Llmeconsumlng and expenslve process of clvll
llLlgaLlon 1he AcL speclflcally lnvesLs Lhe redressal forums wlLh Lhe powers vesLed ln Lhe clvll
courL for Lhe summonlng of wlLnesses and Lhelr examlnaLlon under oaLh Lhe producLlon of
documenLs and oLher maLerlals as evldence eLc (CC8A 1986)
kedressa| mechan|sms
under Lhls AcL a complalnL can be flled by an lndlvldual consumer a reglsLered consumer
assoclaLlon or Lhe cenLral or sLaLe governmenL and a group of consumers wlLh Lhe same
lnLeresLs A complalnL can be lodged lf Lhe consumer of servlces suffers from a deflclency
LhaL could be a faulL lmperfecLlon shorLcomlng or lnadequacy ln Lhe quallLy naLure or
manner of performance LhaL ls requlred ln relaLlon Lo a servlce 1he sLaLe governmenLs have
esLabllshed dlsLrlcL forums and sLaLe level commlsslon Lo handle Lhe redressals 1he cenLral
governmenL has also esLabllshed a naLlonal level commlsslon Lo address Lhe consumer
dlspuLes redressal 1he dlsLrlcL forum conslsLs of a presldenL (quallfled dlsLrlcL [udge) and
Lwo members who are appolnLed by Lhe sLaLe governmenL 1he dlsLrlcL forum conslders
complalnLs where Lhe value of goods and servlces and Lhe compensaLlon does noL exceed
8s 3 lakhs (abouL uS$17 000) Appeals agalnsL orders of Lhe dlsLrlcL forum can be made Lo
Lhe SLaLe Commlsslon wlLhln a perlod of 30 days Llke dlsLrlcL forum Lhe SLaLe Commlsslon
also conslsLs of a presldenL and Lwo oLher members 1he SLaLe Commlsslon has Lhe
[urlsdlcLlon Lo conslder complalnLs where Lhe compensaLlon ls beLween 8s 320 lakhs
(abouL uS$17 00070 000) and appeals agalnsL Lhe order of Lhe dlsLrlcL forum Slmllar Lo
dlsLrlcL forum appeals agalnsL SLaLe Commlsslon orders can be made Lo Lhe naLlonal
Commlsslon 1he naLlonal Commlsslon conslsLs of a presldenL who ls or has been a [udge of
Lhe Supreme CourL and ls appolnLed by Lhe cenLral governmenL plus four oLher members
1he naLlonal Commlsslon has Lhe [urlsdlcLlon Lo conslder complalnLs where Lhe value of
goods servlces or compensaLlon exceeds 8s 20 lakhs (abouL uS$70 000) and appeals
agalnsL Lhe order of Lhe SLaLe Commlsslon 1he orders of Lhe naLlonal Commlsslon can be
appealed agalnsL ln Lhe Supreme CourL




1he dlsLrlcL forum SLaLe Commlsslon and Lhe naLlonal Commlsslon wlll noL admlL a
complalnL unless lL ls flled wlLhln one year from Lhe daLe on whlch Lhe cause of acLlon has
arlsen Lvery order passed by any of Lhese Lhree counclls wlll be enforced ln Lhe same
manner as lf lL were an order made by a courL lf Lhe person agalnsL whom Lhe complalnL ls
made falls Lo comply wlLh Lhe order Lhen he/she ls punlshable wlLh lmprlsonmenL for a
mlnlmum of one monLh and maxlmum of Lhree years and/or wlLh a flne beLween 8s 2000
10 000 (abouL uS$73300) 1he procedure of handllng Lhe complalnLs ls explalned ln above
llgure
upon recelvlng a complalnL Lhe dlsLrlcL forum refers a copy of Lhe complalnL Lo Lhe
opposlLe parLy dlrecLlng Lhem Lo glve Lhelr verslon of Lhe case lf Lhe opposlLe parLy denles
or dlspuLes Lhe allegaLlons Lhe dlsLrlcL forum proceeds Lo seLLle Lhe dlspuLe 1he dlsLrlcL
forum can summon enforce aLLendance of Lhe defendanL and wlLness and examlne Lhe
wlLness under oaLh Lvery proceedlng before Lhe dlsLrlcL forum wlll be a [udlclal proceedlng
Lo be Lrled under Lhe lndlan enal Code (secLlons 193 and 228) and Lhe dlsLrlcL forum wlll
have Lhe powers of Lhe clvll courL (secLlon 193 and chapLer xxvl of Lhe Code of Crlmlnal
rocedure 1973) lf Lhe dlsLrlcL forum ls saLlsfled wlLh Lhe allegaLlons conLalned ln Lhe
complalnL lL wlll 1) lssue an order Lo Lhe opposlLe parLy dlrecLlng Lhem Lo pay such amounL
as may be awarded by lL as compensaLlon Lo Lhe consumer for any loss or ln[ury suffered
due Lo Lhe negllgence of Lhe opposlLe parLy 2) remove Lhe deflclencles ln Lhe servlces ln
quesLlon and 3) provlde for adequaLe cosLs Lo Lhe parLles Lvery proceedlng requlres Lhe
presence of Lhe presldenL of Lhe dlsLrlcL forum and aL leasL one member of Lhe forum
A number of concerns have been ralsed abouL Lhe appllcaLlon of Lhls AcL Lo prlvaLe medlcal
pracLlce lnLer alla Lhese lnclude wheLher medlcal servlces fall under Lhe broad deflnlLlon of
Lhe AcL and wheLher Lhe legal helrs of Lhe deceased are consumers 1hese lssues are
dlscussed below ls medlcal servlce a Lype of personal servlce? 1he CC8A does noL lnclude
medlcal servlces ln lLs llsL of speclfled servlces 1he word servlce can be lnLerpreLed Lo
lnclude every concelvable klnd of servlce ln whlch any beneflL use or advanLage ls derlved
for a paymenL Powever Lwo caLegorles of servlce are exempLed from Lhe purvlew of Lhls
AcL 1hese are servlces rendered free of charge or under Lhe conLracL of personal servlce
Powever Lhe naLure of personal servlces has noL been explalned or clarlfled ln Lhe AcL 1he
lmpllcaLlon of Lhese Lwo exempLlons ls LhaL medlcal servlces ln Lhe publlc secLor are
excluded from Lhe AcL rlvaLe provlders have argued LhaL a servlce rendered by a medlcal
pracLlLloner ls a Lype of personal servlce and ls noL Lhe same as a servlce relaLlng Lo a
commerclal LransacLlon LhaL ls lncluded ln Lhe AcL rlvaLe provlders Lherefore argue LhaL
Lhe servlces provlded by Lhem should noL be lncluded ln Lwo cases M/s CosmopollLan
PosplLals and anoLher (appellanLs) vs vasanLha nalr (respondenLs) and vlnlLha Ashok
(complalnanL) vs Lakshml PosplLal and CLhers (opposlLe parLles) flled wlLh Lhe SLaLe
Commlsslon Lhe defendanLs (prlvaLe docLors) clalmed LhaL Lhese cases could noL be Lrled
under Lhe CC8A 1hey argued LhaL Lhe servlces rendered Lo Lhe paLlenLs were ln Lhe naLure
of personal servlces noL commerclal LransacLlons and hence dld noL fall under Lhe purvlew
of Lhe AcL 1hey also argued LhaL Lhe aggrleved parLy cannoL be consldered consumers of
Lhe servlces and Lherefore cannoL flle a complalnL of medlcal negllgence 1he SLaLe
Commlsslon re[ecLed Lhe clalm of Lhe defendanLs and Lhey appealed Lo Lhe naLlonal
Commlsslon 1he naLlonal Commlsslon ruled LhaL Lhe [udgemenL of Lhe SLaLe Commlsslon
was approprlaLe 1he Commlsslon gave Lhe followlng reason
Accordlng Lo Lhe acL servlce ls deflned broadly and applles Lo every slLuaLlon where
Lhere ls a conLracL for servlce ln whlch Lhe renderer of servlce ls lndependenL of any
supervlslon or conLrol of Lhe person who demands servlce ln Lhe case of medlcal servlce
Lhe paLlenL ls noL ln a poslLlon Lo exerclse any conLrol over Lhe work of Lhe docLor 1hls ls a
case of a prlnclpalagenL relaLlonshlp where Lhe prlnclpal (le Lhe paLlenL) auLhorlses Lhe
docLor (le Lhe agenL) Lo acL on hls behalf so LhaL ln essence Lhe prlnclpal ls hlrlng
professlonal help for someLhlng of whlch he has no knowledge ersonal servlce on Lhe
oLher hand lnvolves Lhe conLracL of servlces whlch lmplles a masLerservanL relaLlonshlp
whereby Lhe masLer dlrecLs Lhe servanL Lo perform servlces of a cerLaln klnd ln a cerLaln
manner (le masLer supervlses Lhe 1enderer of servlces) 1herefore professlonal servlces
and Lechnlcal servlces such as Lhose of surgeons lawyers accounLanLs englneerlng
conLracLors eLc are covered under CC8A
1he courL also passed Lhe [udgemenL LhaL Lhe complalnanLs are legal represenLaLlves of Lhe
deceased and hence are vesLed wlLh Lhe lnherlLable rlghLs of Lhe deceased 1hey are vesLed
wlLh Lhe power of enforclng Lhe cause of acLlon and can be consldered consumers under
Lhe AcL ln summary recenL leglslaLlve [udgemenLs have now made lL posslble Lo brlng
prlvaLe medlcal pracLlce under Lhe purvlew of CC8A 1he Lerm personal servlce
exempLed by Lhe AcL has been lnLerpreLed as a servlce provlded by a prlvaLe lndlvldual Lo a
parLlcular person or relaLlng Lo persons and such servlce has been performed wlLh Lhe
lnLervenLlon of Lhe laLLer Medlcal servlces deflnlLely do noL fall lnLo Lhls caLegory
1he lndlan Medlcal AssoclaLlon has challenged Lhe [udgemenL ln Lhe Supreme CourL
on Lhe grounds LhaL lL cannoL lnclude personal conLracLs wlLhln lLs purvlew All personal
conLracLs are exempLed from Lhe AcL 1hey argue LhaL Lhe AcL reduces Lhe medlcal servlces
Lo a sellerbuyer relaLlonshlp ln Lhe M/s CosmopollLan PosplLals and anoLher vs vasanLha
nalr case Lhe lndlan Medlcal AssoclaLlon and Lhe Cuallfled rlvaLe Medlcal racLlLloners
AssoclaLlon kerala appealed Lo lnLervene on behalf of Lhe defendanLs 1hey argued LhaL
Lhe lssues ralsed were of grave concern and lnLeresL Lo members of Lhe assoclaLlon and Lhe
medlcal professlon aL large 1he Lwo assoclaLlons pleaded LhaL Lhls case should be Lrled
under Lhe lndlan Medlcal Councll AcL 1936 because Lhls AcL covers medlcal docLors and
supersedes Lhe Consumer roLecLlon AcL 1986 1hey argued LhaL Lhe CC8A cannoL have
any appllcaLlon Lo Lhe members of Lhe medlcal professlon 1he naLlonal Commlsslon dld noL
flnd merlL ln Lhls plea 1he Commlsslon argued LhaL Lhe lndlan Medlcal Councll (lMC) AcL
provldes for membershlp guldellnes Lo Lhe medlcal councll recognlLlon of medlcal
quallflcaLlons awarded by unlverslLles or medlcal lnsLlLuLlons ln lndla and Lhe malnLenance
of a medlcal reglsLer ln every sLaLe ln whlch lL ls requlred LhaL every person wanLlng Lo
pracLlse medlclne has Lo reglsLer wlLh Lhe councll lurLhermore Lhe lMC AcL provldes for
Lhe prescrlpLlon of mlnlmum sLandards of medlcal educaLlon for granLlng degrees for
professlonal sLandards and a code of eLhlcs for medlcal pracLlLloners 1he lMC AcL
empowers Lhe councll Lo remove any person from Lhe reglsLer on grounds of professlonal
mlsconducL Powever Lhls AcL does noL conLaln provlslons Lo proLecL Lhe lnLeresLs of
persons who may suffer because of any negllgence or deflclency ln servlces rendered by
members of Lhe medlcal professlon le Lhe rlghLs of a paLlenL lL was ruled LhaL slnce Lhe
lMC AcL does noL provlde for Lhe rlghLs of Lhe paLlenL Lhls case should be Lrled under Lhe
Consumer roLecLlon AcL


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