Draft Report of the High Level Group on Services Sector

5.2.2 Licensing

There are rules for the registration of medical practitioners and separate regulations for professional conduct, etiquette and ethics. The latter contain certain recommendatory rules, such as use of generic names of drugs, but also mandatory rules, such as for the maintenance of medical records of indoor patients for minimum period of three years and maintenance of a register of certificates issued. There is however a serious regulatory gap in the country in that there are no mandatory standards prescribed and enforced for hospitals, nursing homes, clinics, as well as establishments undertaking diagnosis or treatment of disease. The standards for hospitals, for instance, should cover all aspects ranging from building and fire safety to availability of potable water and from basic laboratory services to employment of health professionals. According to international best practice license is granted initially on the basis of some form of external evaluation of compliance with the prescribed minimum standards.
Recently the Clinical Establishments (Registration and Regulation) Bill, 2007 has been introduced in the Lok Sabha to fill this gap in regulation of medical establishments. Article 2 of the Bill defines clinical establishments as:

1. 
   ‘a hospital, maternity home, nursing home, dispensary, clinic, sanatorium or an institution by whatever name called that offers services, facilities with beds requiring diagnosis, treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognized system of medicine established and administered or maintained by any person or body of persons, whether incorporated or not; or
   
2. 
   a place established as an independent entity or part of an establishment referred to in clause (i), in connection with the diagnosis or treatment of diseases where pathological, bacteriological, genetic, radiological, chemical, biological investigations or other diagnostic or investigative services with the aid of laboratory or other medical equipment, are usually carried on, established and administered or maintained by any person or body of persons, whether incorporated or not’
   

All Government hospitals are covered but not those controlled and managed by the Armed Forces.

The Bill seeks to provide for the compulsory registration of all clinical establishments in two stages, provisional at first and permanent thereafter. It is at the time of permanent registration that compliance with the prescribed minimum standards would be required. There would not be any prior inspection of the establishment but before the grant of permanent registration the evidence submitted by the applicants of having complied with the standards would be displayed for the information of the public at large for filing objections. If objections are received they shall be communicated to the clinical establishment for response. Permanent registration can be granted to the applicant only after it has fulfilled the prescribed standards. While there is no provision for periodic inspection the registering authority has been given the power to conduct an inquiry or inspection of the clinical establishment at any time and to issue directions. The designated authority is also empowered to cancel the registration if it is satisfied that the conditions of registration are not being fulfilled, and restrain the clinical establishment from carrying on if there is imminent danger to the health and safety of patients. There is provision for appeal to the State Government from orders rejecting or cancelling registration. Penalties are provided for contravention of the provisions of the Act. The Bill provides for a fine up to Rupees Five Lakh for contravention of the provisions of the Act.
The Bill envisages the establishment of the National Council, which will have the function inter alia of setting the minimum standards to be mandatory for all clinical establishments. The Bill indicates the functionaries and representatives who will constitute the Council.
The enactment, when it comes will make only a small beginning on regulation of clinical establishments in the country because initially it will come into force only in respect of the four States, Arunachal Pradesh, Himachal Pradesh, Mizoram and Sikkim and in the Union Territories. Since health is a subject on which the Constitution gives the authority to the States to legislate, any statute passed by the Parliament can apply to a State only if the State adopts it. So far the legislatures of only the afore-mentioned States have passed resolutions to the effect that clinical establishments in those States would be governed by the law passed by the Parliament.

The High Level Group attached high importance to the setting up of mandatory standards for clinical establishments envisaged in the Bill and once the Bill becomes statute to the extension of its application to all the States. It also recommend that the following comments on the proposed legislation be given consideration by the Central Government:

1. 
   For impartial functioning of the regulatory system the appeal against rejection of registration or similar orders under Section 36 should lie not with the State Government but with an authority independent of the administrative control of Government; and
   
2. 
   In the constitution of the National Council one or more representative/s of the Quality organizations (such as NABH) should be inducted.