Apollo Hospital case: From Delhi HC asking it to treat EWS patients for free, to Supreme Court order now

The Delhi government has a 26% stake in the hospital, which was handed over 15 acres of land on lease at a token rent of Re 1 per month. Institutions like hospitals and schools, which get land from the government on concessional rates, are obligated as per terms of their lease to provide free services to those from the EWS. The percentage of beds or seats reserved in each institution varies as per the terms of agreement.

As per the Supreme Court order, the Centre and Delhi government have to set up a joint inspection team to check if poor people are being treated free of cost or the land “has been grabbed for private interest”. The report has to be submitted in four weeks.

Here is a timeline of the case, based on the Delhi High Court judgment and arguments in Supreme Court:

1986: Delhi administration plans to establish a multi-disciplinary super specialty hospital on a “no profit, no loss” basis in order to utilise the then incomplete Players’ Building near IP Stadium, lying vacant with its Medical Department. A notice inviting tender was issued for offers from private institutions.

The Players’ Building was built as a hotel for the players visiting Delhi during the Asian Games in 1982. The building is now the Delhi government Secretariat.

March 11, 1988: President of India (through Lt. Governor of Delhi) entered into a Joint Venture Agreement with Apollo Hospital Enterprises Ltd., specifically mentioning that the Administrator has decided to establish a project regarding a multi-disciplinary specialty hospital in the building next to Indira Gandhi Indoor Stadium. However, this site was subsequently requisitioned by Sports Authority of India.

It was clearly stipulated in the agreement that the proposed company shall provide free facilities of medical diagnostic and other necessary care to at least a third, or 33%, of the total 600 beds in the multi-specialty hospital. It also said that the hospital will provide free of cost full medical diagnostic and other necessary facilities to 40% of the patients attending the hospital OPD.

April 21, 1988: The Delhi government and Indraprastha Medical Corporation Ltd/ Indraprastha Apollo Hospital (IMCL) enter into lease agreement to establish a multi-disciplinary super specialty hospital. Land on the Delhi-Mathura road, Jasola village, was given on lease at a nominal rate of Re 1 per month. The lease deed’s terms also contained provisions for providing free diet, medical diagnostic and other such facilities to poor patients.

July 1996: The Indraprastha Apollo Hospital was partially commissioned.

January 24, 1997: The Chairman of Board of Directors of IMCL mentioned that the hospital should consider commencing free patient facility and a Committee of Directors was also constituted to consider the issue. The management of the company, however, took a stand that the lease deed did not place any obligation upon the company to provide free medicines or free consumables.

August 20, 1997: The government director moved a fresh resolution that all victims of road accidents brought to Indraprastha Apollo Hospital be provided free treatment at the cost of the hospital. However, no decision could be arrived at and consideration of the same was deferred. The issue of free treatment mostly remained on paper.

December 10, 1997: All India Lawyer’ Union (Delhi) files a petition at Delhi HC seeking directions for ensuring free medical treatment in terms of the lease agreement of 1994.

January 1998: IMCL, in its response to the petition, describes itself as a “commercial venture” with another company providing Foreign Direct Investment (FDI) for establishing a modern multi-speciality hospital. It contended that the hospital was meant to be a “self-generating project” wherein cost of free services, if any to be rendered to the poor and needy, would have to be generated from the revenue earned commercially, keeping a balance between the two activities, to be viable.

It disowned any responsibility to provide free medical aid to poor and needy. It added that unlike government hospitals and charitable institutions, IMCL, a public limited company, was answerable to the investors and the financial institutions supporting the venture. It also said that as a “humanitarian gesture”, it had offered to start a free treatment facility for poor patients sponsored by the GNCTD “on a pro rata basis”.

July 4, 1998: Principal Secretary (Health), Delhi government had appointed a committee comprising director and medical superintendents of three hospitals, to visit the hospital to see the arrangements made regarding free treatment in terms of directions of HC.

July 13, 1998: Committee submits report, finds arrangements to be “highly unsatisfactory.” Against 200 beds that were to be made available for free treatment, it had provisioned only 75.

June 12, 2000: Delhi government constituted a Committee headed by Justice A.S. Qureshi (Retd) and some official and non-official members, to review the existing free treatment facilities in hospitals. For Apollo, it found that of the 650 beds, only about 20 beds are used for free patients. It noted that it has violated the stipulated conditions. It also said the establishment of the hospital was a “bad bargain as an investment for the Delhi government”.

July 12, 2002: HC constitutes a Committee comprising Dr S.K. Sarin as the Chairman, and senior advocate Amrendra Sharan and architect Akshay Kumar Jain, to verify if the standard of care being provided to EWS patients and paying patients was the same, and number of commissioned free beds. Hospital did not share information that the committee sought.

March 5, 2003: Committee in its report brought out “glaring deficiencies in the arrangements and discriminatory treatment” for poor patients, which included not maintaining records for the poor patients, only 18.45% of the 634 commissioned beds available for the poor, and attempts to write off bad debt where patients from whom payments could not be recovered were shown as ‘free’ patients.

The committee report also said that even patients who had paid over Rs 6.88 lakh to the hospital, were categorised as free treatment patients. It found that on an average a free patient in the year 2000-2001 paid a sum of Rs. 2.12 lakh and in the year 2001-2002, each free patient paid on an average a sum of Rs 1.63 lakh.

The report also found that instead of providing free treatment to 40 percent of its OPD patients, the hospital had provided free OPD treatment only to less than 0.001% of the total patients in these years.

April 8, 2009: Committee submits a second report. Taking random samples for three months for the past five years, the Committee finds that only 939 patients were treated for free against 38,120 patients who paid for treatment – barely 2.46%.

September 22, 2009: Delhi HC directs that Indraprastha Apollo Hospital shall admit free patients and treat them free of any expenses in relation to admission, bed, treatment, surgery, etc, including consumables and medicines, and they would not be required to pay any expenses for their treatment. It also imposed a cost of Rs 2 lakhs on IMCL for raising frivolous objections to the petition.

November 2009: IMCL challenges the order in the Supreme Court

The stark difference

Delhi HC in its verdict had noted that as per the figures submitted by the hospital, the expenditure on consumables and medicines is Rs.186 crores out of the total hospital revenue of Rs 391.19 crores. In contrast, G.B. Pant Hospital, a super specialty hospital having 600 beds run by the government, spent only around Rs 23 crores in 2008 on consumables and medicines.

What did IMCL tell the Supreme Court?

IMCL, in its plea before SC, submitted that the cost of free medicines and medical consumables alone would cost approximately Rs. 67 crores annually, whereas the profit for the year ending March 31, 2009, was Rs. 24 crores. It had also argued that whether the interest of 35,000 ordinary shareholders representing the general public be ignored or sacrificed by adding on the liability of the huge costs of medicines and medical consumables to the expenditure of the IMCL hospital “thereby completely wiping out or reducing the dividends”.

It had also termed that given that it was a joint venture with the Delhi government, the subsidised leasing of land was an investment.