Assessing the Effect of GST on Healthcare Costs: A Study of Hospitals and Diagnostics Services

Abstract : Goods and services tax is one of the remarkable policy changes in India that has tapped on almost all sectors, ranging from healthcare. The impact of GST particularly on hospitals and the costs incurred on diagnostic services forms the core of this research. The study will seek to establish modifications in cost structures, service cost, and accessibility of the patients after the implementation of GST. The analytical approach of the current study is qualitative and quantitative to painting an integrative picture. It consists of interviews with managers of the analyzed hospitals as well as the providers of diagnostic services accompanied by quantitative analysis before and after the introduction of GST. To generalize the results, fifty hospitals and forty diagnostic centers have been selected after considering a mix of both urban and semi-urban centers. The study employs Statistical Package for the Social Sciences (SPSS) in quantitative data analysis and the qualitative data analysis involves thematic coding. Closely examined are fluctuations in the cost of core services, tax on citizens’ expenditure, and shifts in the patient influx. The initial study results indicate that the cost increase of diagnostic ambulatory care services has been slightly rising, especially in urban areas, and the effects on hospitals have been variable depending on the type of service. The paper establishes that GST has integrated taxation although the direct and indirect impacts of this reform on the costs of health care require policy action from the government to foster equitable provision of health care services.