Healthcare services: PHC empowered to regulate, control prices: LHC

LAHORE: The Lahore High Court while dismissing petitions of Shaukat Khanum Memorial Trust and others held that the Punjab Healthcare Commission (PHC) is empowered to regulate and control the pricing of healthcare services rendered by healthcare establishments.

The court said regulating prices for essential healthcare services directly serves the constitutional mandate by preventing arbitrary overcharging and ensuring equitable access.

The State, therefore, carries a constitutional and affirmative obligation to ensure the availability, accessibility and affordability of healthcare to all citizens, the court held.

This obligation extends not only to the direct provision of such services by the State but also to the facilitation and regulation of private participation in the healthcare sector, the court said , adding that such participation must be subject to strict oversight so as to preclude exploitation and the accrual of windfall profits at the expense of public welfare.

The court observed that the Punjab Healthcare Commission Act, 2010 (the Act), clearly confers upon commission the authority to regulate and control the prices of healthcare services, including those provided by diagnostic labs.

The court further observed that section 40(2)(m) of the Act also unequivocally grants the power to the commission to formulate regulations regarding the control of prices of healthcare services.

The court said, sub-regulation (10) of the PHC (Pricing of Healthcare Services) Regulations, that lays down mechanism for pricing, provides the commission a crucial safety valve to intervene where submitted costing data is found to be unreliable, to address emergent situations that demand price stability, or to establish benchmark prices for commonly undertaken procedures in the public interest.

The regulation ensures that the commission can fulfill its functions even in the face of non-compliance, market failures or systemic irregularities by a healthcare establishment, thereby upholding the integrity of the entire pricing mechanism and safeguarding the public from undue financial burden, the court added.

The court observed that the impugned regulations are not an arbitrary exercise of power by the commission. Instead, the regulations require healthcare establishments to perform their own activity-based costing, thereby entrusting them with the primary role of determining their service prices, the court added.

The court said the core objective of price control under the Act, is to ensure fair and controlled pricing across all healthcare services, regardless of the specific type of establishment providing them.

The court said to ensure fairness and accuracy, the commission’s pricing cell is empowered to verify, re-assess, and validate the submitted costing data. If inaccuracies are found, the commission can determine a rationalized price to be charged by the establishment, the court added.

The court said the application of uniform pricing controls for specific services across all relevant healthcare establishments is a rational and non-discriminatory approach to achieve objectives of the Act.

Therefore, the pricing controls, framed reasonably within the express powers conferred by the Act, are not only necessary but also represent a proportionate measure to fulfill a vital public interest and prevent undue financial burden on patients, the court concluded.

Copyright Business Recorder, 2025