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Case Studies: Receivers of Free Treatment are not Consumers

If statistics are to be believed, the healthcare industry is on an upswing, medical costs are burgeoning, hospitals are becoming richer by the day, and the outcome of this growth has seen unprecedented year-on- year increase in cases of medical negligence. As per a November 2016 study published by Supreme Court advocate Mahendra Kumar Bajpai, medical negligence cases in India have been seeing over 110 per cent rise every year - and 12 per cent of all the cases decided by consumer courts are on medical negligence.
 
Between 60 and 66 per cent of the filed cases are because of hospitals taking improper consent from relatives before performing certain procedures or switching hospitals, or improper documentation throughout the course of diagnosis and treatment. A point to be noted here is that the cases of medical negligence being heard in consumer forums are those where the patients are considered as consumers and their complaints have been 'accepted' by the forums. The figure would be much higher if the medical negligence cases where 'patients had been treated for free were also accepted by the forum.
 
As per Consumer Protection Act, if the hospital is treating the patient for free (that is, not accepting payment/ fee either from the patient or from any other source), then the patient cannot be considered a consumer of services of the hospital and is ineligible to file a complaint at the forum. This however does not mean that the person cannot go to civil courts.
 
Discussed below are a few cases that provide clarity on the subject.
 
The Case of Dr Hema, Dr Sulekha, Dr Sethunath versus S Jayan &  Others
 
In this case, National Commission maintained that the complainant did not fall within the purview of  'consumer' under Consumer Protection
 

SC's Landmark Judgement - the Theory of Liability of a Doctor

The Supreme Court of India, in the case of V Shantha versus Indian Medical Association in 1995 (thereafter in a number of cases including that of Harjot Ahluwalia versus Spring Meadows, Achyut Rao Haribhau Khodwa versus State of Mahrashtra, JJ Merchant versus Shri Nath Chaturvedi), had maintained that unless a payment was made for a service, it could not be considered a service. It further clarified that patients getting treatment at government hospitals were consumers only if they were paying for the same. Also, when a government hospital gives services completely free of cost and no charges are taken from 'all patients',  then none of its patients is a consumer.
In the matter of V Shantha versus Indian Medical Association, the theory of Act.
 
Here the question of 'making payment for services hired' was clarified. The jury stated that SAT Hospital did not charge from the patient and hence was not rendering services to the consumer under Consumer Protection Act. SAT Hospital, which is a government-run hospital that does not charge any fee from its patients, was accused of medical negligence. In 2000, a child patient was brought to the casualty ward and kept in ICU for a surgery.
 
Even if the jury wanted to help the complainant in this case, it could not have since it would have meant going beyond the Consumer Protection Act, which does not have the term 'medical negligence' mentioned in any form. It only deals with 'deficiency in service' for which the consumer pays.Liability of a doctor as a service provider was explained in detail, and this theory now acts as a guideline for all such matters. While considering the liability of doctors at government hospitals and other employees of the hospitals, a distinction was made between the terms 'contract of service' and  'contract for services'.
 
The SC stated: "…no doubt that Parliamentary draftsman was aware of this well-accepted distinction between 'contract on his left arm. After one week of the surgery, the child's forearm had to be amputated because it had developed gangrene due to lack of proper aftercare - a case of negligence on the part of the doctors. However,
neither the hospital nor its negligent doctors were booked or challenged as the patient's parents could
not prove that they were 'consumer's, not having paid for the service.
 
Even if the jury wanted to help the complainant in this case, it could not have since it would have meant going beyond the Consumer Protection Act, which does not have the term 'medical negligence' mentioned in any form. It only deals with 'deficiency in service' for which the consumer pays. of service'and 'contract for services' and has deliberately chosen the expression 'contract of service' instead of the expression 'contract for services', in the exclusionary part of the definition of 'service'; in Section 2 (1) (o). The reason being that employer hospital cannot be regarded as a consumer in respect of the services rendered by his employee in pursuance of a contract of employment. Therefore, services rendered by employed doctors of the hospital are services rendered by virtue of their employment and not towards the patients coming to the hospital."
 

Section 2 (1) (o) in Consumer Protection Act, 1986

'Service' means service of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service.
 
Hence, the liability of private hospitals and nursing homes (hereinafter called 'doctors and hospitals') broadly fall in three categories. These categories are described here.

  • Where services are rendered free of charge to everybody availing the said services (mostly government hospitals), patient is not considered a consumer. Token amount paid as registration fee is not considered as payment made towards treatment and does not make one eligible to be called consumer or the recipient of the service.
  •  

  • Where charges are required 'negligence' on doctor's part is primarily the liability/ responsibility of the hospital.

There is no doubt that the relationship between a medical practitioner and a patient carries within it a certain degree of mutual confidence and trust and, therefore, the services rendered by the medical practitioner can be regarded as services of a personal nature. However, since there is no relationship between the doctor and the patient by virtue of accepting payment, the doctor
 
Where services are rendered free of charge to everybody availing the said services (mostly government hospitals), token amount paid as registration fee is not considered as payment made towards treatment and does not make one eligible to be called consumer or the recipient of the service. to be paid by everybody availing the services, patient is clearly a consumer and fall within the ambit of Section 2 (1) (o) of the Act.

  • Where charges are required to be paid by persons availing services, but certain categories of persons who cannot afford to pay are rendered service free of charges, patient still remains a consumer. Consumers may note that excluding the government hospitals, charitable hospitals that provide free treatment also fall within the Act's ambit as expenses cannot be regarded as a service provider to the patient of free services are met out of the income from the service rendered.
  •  

Consumers may note that medical practitioners, government hospitals and nursing homes as well as to the paying patients or through donations/charities from donors of charitable foundations.

Legal Helpdesk

Divya Patwal

VOICE

2 Comments

  1. Vikram
    September 3, 2018
    Reply

    Very informative article. Thanks
    Can your provide me detailed information about the case mentioned on this site:
    https://www.financialexpress.com/india-news/patients-treated-for-free-also-consumers-can-file-case-against-hospitals-for-negligence-ncdrc/1049023/

    • Divya Patwal
      September 5, 2018
      Reply

      The National Consumer Dispute Redressal Commission has recently held that the patients who are treated free of cost at government hospitals also fall within the definition of ‘consumers’ under section 2 (1)(d) of the Consumer Protection Act, 1986, and hence have the right to file a case of medical negligence in the consumer forum against such hospitals. The forum headed by its president Justice D K Jain was hearing a complaint with respect to the medical negligence of the doctors of Government Bangar Hospital that resulted in the death of its patient-Ramesh Chand Vyas, a former commissioner of Pali municipal council. Vyas was admitted in the hospital in the year 2001 after he met with a road accident. The Commission held district medical officer and in-charge of Government Bangar Hospital in Rajasthan’s Pali district guilty of negligence, resulting in the death of a road accident victim in 2001, the National Consumer Disputes Redressal Commission (NCDRC) ordered Rs 10 lakh penalty on the hospital.

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