There are charitable hospitals in India sponsored by well-regarded religious organizations, such as the Ramakrishna Mission and various Christian groups. These hospitals are generally free to the poor and at a very low cost to those who can afford to pay a little. They focus on primary medical care, which provides the most benefit from the organization's limited resources. Amma even sponsors a few small charitable hospitals and clinics herself. One might wonder then why Amma chose to establish AIMS as a large super specialty hospital where very few of its patients actually receive free care. Her website gives this reason:
"It is love that prompted Amma to create a hospital in Kerala where the poor could receive free advanced medical care, such as heart operations and kidney transplants, in an atmosphere of love and compassion. She saw that while the poor did receive basic medical care through various charitable clinics, advanced care was beyond their means."It is true that free and low cost basic medical care is widely available in Kerala, a communist state that prides itself on its social services. Kerala's literacy rate of 94% is the highest in India. Kerala now has 26 western-style medical schools. All fourteen Kerala districts have government-run hospitals and primary health centers. Kerala's infant and maternal mortality is comparable to those of many developed countries. Its life expectancy is 74 years, versus 64 for all of India, and 67 for the world as a whole.
What about Amma's statement that the poor are not able to receive advanced medical care, such as heart operations and kidney transplants? The government of India has long been aware of this situation. Years ago, they empowered the Prime Minister's National Relief Fund (PMNRF) to reimburse hospitals for care to the poor with respect to advanced procedures such as heart surgeries, kidney transplants, and cancer treatment. In order to receive these funds, hospitals have to be approved by the PMNRF. In Kerala, all five-government hospitals are approved, as are twenty-one private hospitals, including two others in the Kochi area besides AIMS, both of which have been in existence longer than AIMS (http://pmindia.nic.in/relief.php?nodeid=108). So there are actually a number of specialty care hospitals that provide exactly the kind of care for the poor that Amma says is lacking..
If one really wants to provide additional advanced care to the poor, the normal way to do this is to set up a charitable super specialty hospital with an endowment to fund free care. (According to the former Joint Secretary in charge of Accounts, AIMS was established as free hospital in order to receive duty concessions, but never operated as one.) When I was there, AIMS had no endowment. They only gave about 5% of their care to the poor, and no medications, since these are not covered by the PMNRF. (Now they have a drug bank in which other patients give their leftover medications to the poor so the hospital still does not have to pay for them.) The PMNRF paid most of that 5%, so the hospital made a profit even on its care to the poor. In contrast to this, two endowed Sri Sathya Sai super specialty hospitals in south India give advanced care, such as heart operations and kidney transplants, freely to all (http://en.wikipedia.org/wiki/Sri_Sathya_Sai_Super_Speciality_Hospital). The Shirdi Sai Baba organization also has an endowed super specialty hospital that freely provides advanced medical care (https://www.shrisaibabasansthan.org/new_eng template_shirdi/shri saibaba trust/saibabahospital.html).
Could there be some other reason that Amma wanted to have a super specialty hospital? Here is one possibility to consider. All medical colleges require a hospital. Instead of caring for the poor, Amma's organization could utilize donations and other funds to build a large health services college complex next to AIMS. The organization could do this, since Amma's educational institutions are categorized as "humanitarian activities."
Having a super specialty hospital with very expensive equipment and specialty doctors (not to mention Amma's good name as Chancellor of her colleges) means Amma's medical college can charge a hefty premium. In fact, her medical college charges almost twice as much as all the self-financing medical colleges in Kerala, and even more compared to the government medical colleges:
http://www.hindu.com/2011/04/20/stories/2011042061900400.htm
http://aims.amrita.edu/school-of-medicine/mbbs_admission.php.
The costs of attending Amma's colleges are so high that the colleges send recruiters to Middle East countries seeking wealthy students. Just as AIMS benefits the wealthiest doctors - some specialists were paid 4 lakh (around $90,000) a year in 2001 when I was there - its medical college benefits the wealthiest families, who are the ones that can afford to send their children there.
Here is an example from the Amrita School of Medicine website. The medical college accepts 100 students per year into their MBBS program that lasts 4.5 years.
Therefore, there are 450 basic medical students there at any time. Annual tuition, room, and board per Indian student is 518,000 Rs, or $9400. (Non-resident Indians and foreigners are charged $28000 per year just for tuition.) Even if you assume there are no foreigners there, the school generates $4.23 million in revenue each year from these 450 students!
For the 240 BDS dental students (60 per year for 4 years) paying 422,000 Rs, or $7680, per year (we will ignore the foreign students who pay $15,000 just for tuition each year), the school's annual revenue is $1.84 million. From just the MBBS and BDS programs, the Amrita medical and dental schools generate over $6 million in revenue each year. These are only 2 of the more than 15 degree programs offered in the health service colleges adjacent to AIMS.
Part 2 of the analysis shows financial simulations which reinforce this theories.