Covid pushes up healthcare costs

At a time when people are losing their jobs and income is shrinking for most the persistent Covid-19 pandemic is forcing them to spend more on healthcare services, adding to their woes.

Bangladesh Bureau of Statistics (BBS) data showed healthcare and medical expenses inflation stood at 7.73 per cent as of June 2021, which was 6.86 per cent in 2020.

The rise is very high compared to the pre-Covid-19 level of 2.88 per cent in 2019.

This is also much higher than the overall inflation rate of the country, which was 5.56 per cent in FY21. The food inflation rate was 5.73 per cent in the past fiscal year.

The Consumer Price Index (CPI) of medical care and health expenses also increased from 156.1 in July 2020 to 251.9 in June 2021.

“Medical and healthcare inflation increased due to the rise in the price of medicine, hospital bed rents and diagnostic fees. During the Covid-19 pandemic, people bought different types of medicine from their own and stockpiled it,” Syed Abdul Hamid, a professor at the Institute of Health Economics, University of Dhaka told The Business Post.

The increased hospital bed rents and test fees, pushed the treatment cost high, leading to high inflation in medical expenses, he said.

Shahadat Hossain Mahmud, Director General of Health Economics Unit, told The Business Post that the Covid-19 pandemic is mostly responsible for high inflation in medical expenses.

“When people’s income increases, they spend more on healthcare and food, which normally pushes food and medical inflation up,” he said.

“But now, the inflation got increased due to ongoing Covid-19 pandemic, which pushed the prices of medicine and other health-related services up,” he added.

Supply shortage of medicine and lack of enough hospital beds could be another reason for high prices of medical services, experts have pointed out, suggesting an increase in supply and implementation of rules.

“The government responded to health and economic emergencies caused by Covid-19 by announcing a number of liquidity support and fiscal stimulus packages targeting various sectors and people,” Towfiqul Islam Khan, a senior research fellow at Centre for Policy Dialogue, told The Business Post.

To avoid supply crunch, the government has to ensure enough supply and the manufacturers have to increase production capacity, said Islam.

He recommended reducing taxes on the import of Active Pharmaceutical Ingredients (API) to keep prices of medicine at an affordable rate.

Health Economics professor Hamid said that the cost of treatment also went up due to the commission paid to the doctors by the pharmaceuticals as well as hospital owners.

“The government has to bring all the private hospitals under accreditation and set a rent for beds based on their categories,” he added.

On top of that, the government has to implement Bangladesh National Drug Policy 1982 to set prices of medicine, he added.

Anower Hossain, General Manager of Lazz Pharma, told The Business Post that prices of some medicines rose in 2020 compared to 2019.

“A strip of 10 capsules under the generic name of omeprazole was Tk 50, which rose to Tk 60,” he said.

In this regard, prices of raw materials, production cost and exchange rate are taken into consideration, he added.

Citing another example, a pharmacy owner in Dhaka, said that prices of per piece tablet under generic azithromycin rose by Tk 5 to Tk 35.

Some other tablets under generic name clonazepam also increased by Tk 15 to Tk20 a strip, he added.

“In line with the National Drug Policy, a maximum price of 117 medicines are set and no one is allowed to set higher price over the government price,” MD Ayub Hossain, director of Directorate General of Drug Administration (DGDA) told The Business Post.

“If pharmaceuticals companies want to increase prices of medicines except for these 117 items, they have to clarify the reason and we allow it reviewing the logics,” said Ayub.

Meanwhile, expenses for treatment also went up due to the rise in doctors’ consultancy fees.

“I was used to paying Tk 500 per visit to consult a doctor in 2020, which rose to Tk 600 as of June 2021,” Md Forhad Hossain, a resident of Rampura told The Business Post.

He pointed out that the cost of different tests also went up amid the ongoing pandemic

Budget allocation for health has increased only by 12 per cent, from Tk 29,247 crore in FY21 to Tk 32,731 crore in FY22.

As of now, Bangladesh’s allocation for the health sector is one per cent, while out-of-pocket health expenditures are 74 per cent of total health expenditure, the highest in the South Asian region.

Out-of-pocket payments are expenditures that are directly borne by a patient when they are not fully covered by insurance. It includes cost-sharing, self-medication and other expenditure paid directly by private households.

As per World Health Organization (WHO) Global Health Expenditure the annual health expenditure for Bangladeshis was $69.67 in 2017.