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Why suspend the licence of the hospital?

One of the branches of Max hospital in Delhi was in news recently for all the wrong reasons. The hospital had declared a premature newborn dead even though he was alive. It was definitely an act of negligence on the part of the doctors and the paramedical staff who were handling the case. Strict action must be taken against them. But the Delhi government chose to take an exalted view and suspend the licence of the entire hospital, which doesn't seem right.
The intent of the government was to send out a harsh message, one that keeps the medical team on their toes. But it isn't the right way to go about it. The decision affected hundreds of employees and more importantly the patients, who were getting treated there. Most of the public hospitals in Delhi are in a deplorable state. Most of the people therefore prefer private hospitals and Max is one of the popular choices. The decision to suspend the licence doesn't help. The government should instead improve the state of public hospitals and get them to compete with their private counterparts.
-Moni Jaiswal, Dubai