Covid-19: The Gujarat HC’s order on regulation of private hospitals in Ahmedabad

Gujarat is among the States that has been most severely affected by Covid-19, and has a mortality rate that is above the national average. The city of Ahmedabad alone accounts for over 70% of the cases in the State, and is the third-most affected city after Mumbai and Delhi. Against this backdrop, the Gujarat HC took suo moto cognizance of the manner in which the State Government has handled the Covid-19 pandemic. It has issued multiple directions and recommendations to the Gujarat Government, through a series of interim orders. The directions and recommendations cover multiple issues, ranging from regulation of private hospitals to improving the functioning of public hospitals.

In its latest order of 22^nd May, the High Court made certain significant observations on the manner in which private hospitals should be regulated during this pandemic. These observations assume significance, as there have been multiple accounts of the manner in which private hospitals have been overcharging patients. This has prompted States such as Maharashtra to take over 80% of the beds in private hospitals, and place a cap on the pricing of these beds. A similar pattern also played out in the city of Ahmedabad, where, as the Gujarat HC noted, private hospitals were attempting to profiteer and take advantage of the pandemic.

Based on these reports, the Gujarat HC had in an earlier interim order (issued on 14^th May) suggested that the Ahmedabad Municipal Corporation (AMC) should take steps to regulate the functioning of private hospitals in Ahmedabad. The AMC accordingly issued an executive order under the Epidemic Diseases Act, 1897 - which laid down a number of regulations that private hospitals had to comply with. The regulations mandated that private hospitals should reserve 50% of their beds for Covid-19 patients, and also prescribed ceiling rates for different medical facilities – above which no private hospital shall be allowed to charge.

Imposing ceiling rates on pricing of the services provided by private hospitals was bound to be contentious – and a few private hospitals refused to comply with the AMC’s regulations. Few hospitals also refused to enter into a mandatory MoU with the AMC, until legal notices were issued to them. Taking note of this, the Gujarat HC directed the State Government to take legal action against those private hospitals which refused to comply with the AMC’s regulations. The Court also provided an important constitutional justification for regulating the activities of private hospitals during the Covid-19 pandemic. After noting that the right to health is a fundamental right under Article 21 of the Constitution, it stated that in times of a pandemic, the State had a duty to ensure smooth and easy access to healthcare for everyone.

The regulations imposed on private hospitals was accordingly held to be a ‘public duty’, and an extension of the State’s public healthcare function. This was because by capping pricing and ensuring availability of beds, the regulations facilitated access to healthcare in private hospitals, and ensured that private hospitals do not profiteer during a pandemic. The regulations were hence in furtherance of the right to health, as they ensured smooth and easy access to healthcare facilities in private hospitals, during this unprecedented situation where government hospitals are overburdened.

The Court also referred to Salmond’s views to state that every right imposes a corresponding duty that the State has to fulfil. It then stated that “The State is obliged to ensure that the Right to Health is respected, protected and fulfilled and is duly provided to all its citizens”. This duty to ‘respect, protect, and fulfill’ is in accordance with Henry Shue’s conception of the correlation between rights and duties. Although the Court does not refer to Henry Shue, its observations are doctrinally in consonance with Henry Shue’s conception. Let us now discuss Henry Shue’s conception of the correlation between rights and duties.

As per Henry Shue, every right imposes three levels of duties on the State – which is the (i) duty to respect; (ii) the duty to protect; and (iii) the duty to fulfill. Let us apply these three levels of duties to the right to health. Under the duty to respect, the State has a negative obligation to ensure that it does not infringe on a person’s right to health in an arbitrary or unreasonable manner. Under the duty to protect, the State has a positive obligation to ensure that private parties do not infringe on a person’s right to health. Finally, under the duty to fulfill, the State has a positive obligation to take steps to secure access to healthcare for one and all.

Capping prices charged by private hospitals is in furtherance of the State’s duty to protect and fulfill, as it ensures that access to private hospitals is available to a wider segment of the population, and is not restricted to the urban elite. In a situation where government hospitals are overburdened, capping prices ensures that more people have the means to avail private healthcare facilities. This is in furtherance of the State’s positive duty of securing access to healthcare facilities during a pandemic. The Court’s reasoning hence also has a strong foundational rights-based justification, and is in sync with the range of duties that the right to health can impose on the State.  

The key takeaway here is that the Court attempts to expand the State’s duty to provide access to healthcare – by also including within its ambit the duty to ensure smooth and easy access to private healthcare facilities. The Court recognizes that during a pandemic, private hospitals cannot be allowed to profiteer, and should assist the State in securing access to healthcare. This constitutional justification has important implications - as other State Governments are also devising similar measures to regulate the functioning of private hospitals.

For instance, the measures undertaken by the AMC resemble the measures adopted by the Maharashtra Government, which has taken over 80% of the beds in private hospitals, and has capped prices. If the actions of the Maharashtra Government are challenged in the Bombay HC, the State can refer to the Gujarat HC’s reasoning to argue that the regulations are in furtherance of the right to health – as they ensure that private hospitals are affordable to a larger segment of the population.

Keeping aside possible legal challenges in different States, the Gujarat HC’s reasoning also has a larger constitutional implication – as it provides a fundamental rights-based justification for regulating private healthcare. As the number of Covid-19 cases are likely to rise and government hospitals continue to be overburdened, imposing a positive duty on the State to ensure easier access to private healthcare is a step in the right direction.