India’s Top Health Institute Wasted $6.7M Worth of Devices, Report Claims

Even as healthcare remains out of reach for much of the population in India, unused medical equipment worth several lakhs were found expired in the store rooms of the country’s premier health institute, a recent report concluded.

Medical devices worth at least Rs 67 lakh ($6.7 million) were purchased by the surgical department of the All India Institute of Medical Sciences (AIIMS) from 2009 to 2012, but were not used and found expired during a physical verification by a vigilance committee earlier this year.

The irregularities have been referred to the Central Bureau of Investigation for a detailed probe, Union health minister J.P. Nadda informed Parliament.

The report of the committee, constituted by AIIMS itself, highlights items worth Rs 60 lakh ($6 million) were found unused and expired, thereby “causing loss to the Institute.” Besides, the inspecting team also noticed several items which were purchased by the surgical department of the institute but were not used. “This shows gross negligence on the part of department and leads to blockage of funds amounting to Rs 700,000,” the report points out. Nadda also submitted the report of the committee to the House.

“Institute has issued instructions to all concerned to follow purchase procedure as laid down in GFR (General Financial Rules), 2005,” Nadda said. The institute has also asked all its departments to give quarterly report on various types of procurement made by them.

The alleged irregularity is significant mainly because India is struggling with its healthcare spending, which as a percentage of gross domestic product (GDP) is among the lowest in emerging markets. During 2012, India spent a total of around 4 percent of GDP on healthcare, whereas Brazil and China spent 9.3 percent and 5.4 percent, respectively.

Experts say such wastage of valuable resources and blockage of funds are intolerable in a country where many are struggling to access quality healthcare. Moreover, such irregularities result in financial loss to the state exchequer.

According to the report, the department also allegedly flouted procurement rules by placing purchase orders for “surgical open item” in divided manner instead of making bulk purchases.

But AIIMS director Dr. M.C. Misra, head of the surgery department during this period, has denied the committee’s findings. In his response to the institute, he said all unused equipment found during verification were re-sterilized and used; only expired equipment was discarded.