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Companies can now set up medical colleges

Govt has removed the bar on entry of companies into the area of medical education directly.

Written by Soma Das | New Delhi | Published: March 18, 2010 12:20:55 am

In a move to enable corporates in the business of healthcare provide end-to-end services,the government has removed the bar on entry of companies into the area of medical education directly.

As per a notification issued by the Medical Council of India (MCI),corporate hospital chains like Fortis Healthcare,Max Healthcare,Apollo Hospitals can now set up medical colleges that offer pure medicine courses. Companies that own large hospital chains had diversified into health insurance and pharmacy businesses but had been left out of pure medical education.

The MCI has also relaxed land norms for players planning to set up medical colleges in cities. Fortis and Max have confirmed to FE that they plan to set up medical colleges.

Until now,only state governments,universities,government-promoted autonomous bodies,registered societies and public religious and charitable trusts could set up medicine colleges. Although trusts are eligible for tax benefits,corporate hospital chains did not take this route because of regulatory impediments on land and para-medical courses. For mega cities such as Mumbai,Kolkata,Chennai,Delhi and large cities which include Ahmedabad,Hyderabad,Pune,Bangalore and Kanpur,the land requirement has been reduced to a minimum total built up area of 10 acres,based on the permissible floor area ratio allowed in the area concerned.

This is a huge relief from the earlier requirement of 25 acres of contiguous area which made it very difficult to situate a medical college in large cities. The land limit has been relaxed for other cities to 20 acres of contiguous land and provisions for further relaxation have been incorporated in special cases.

MCI president Ketan D Desai told FE that “through this notification,companies have been made eligible to apply for setting up medical colleges as not-for-profit institutions.”

Corporate hospital firms hailed the move as a small but significant step in overall medical education reform. “The move is welcome although it is a very fundamental one,and much more needs to be done,” said Pervez Ahmed,CEO,Max Healthcare. He confirmed that Max has plans to enter the area of medical education.

Stating that Fortis is interested in medical education,its president (medical strategy) Narottam Puri said: “Foreign tie-ups should be allowed to further improve the quality of medical education. The fee structure should be made more flexible to ensure transparency and viability of such medical colleges. A uniform policy from the Central government is essential for creating a level-playing field nationally,rather than having it differently for every state.”

Under the existing system,any party interested in setting up a medical college has to first file an application with the health ministry which refers the case to MCI. After evaluation,the medical regulator sends its comments to the ministry,based on which a letter of intent might be issued to the player. The player then has to seek a letter of permission from the ministry which refers it to MCI again. After the MCI recommends a letter of permission,the ministry issues it to the player.

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