Private healthcare in India-An Analysis

Contents hide

It is imperative to ensure that the association with the private sector, as far as healthcare is concerned, is rooted in principles of justice rather than financial expedience

  • The Niti Aayog and the Union Health Ministry have put forward a proposal to allow private entities to use the premises of the district hospitals to provide treatment for cardiac and pulmonary diseases and cancer.

  • Recently, the Niti Aayog and Union health ministry have also  put forward a public-private partnership (PPP) model for the management of non-communicable diseases in tier 2 and 3 cities across the country, with World Bank will be serving as a technical partner.

  • The private hospitals said some provisions need to be clarified. This include the rates that can be charged to patient who aren’t covered by National Health Protection (NHPS), Rashtriya Swasthya Bima Yojana (RSBY), Central Government Health Scheme (CGHS), or state insurance schemes.

  • There is shortage of infrastructure and human resources, 72% of the rural population and 79% of those living in urban areas have sought access to healthcare in the private sector.


  • The potential of India’s district hospital system to dramatically expand access to quality secondary and tertiary health care has never really been realised.

  • The majority of patients today use the facilities created mostly by for-profit urban hospitals. 

  • Yet, contracting out services in a virtually unregulated and largely commercial private system is fraught with risks.

  • One major concern in such an arrangement is to ensure that the bulk of health spending, whether from government funds, subsidy or private insurance, goes into actual care provision, and that administrative expenditure is capped under the contract. 


  • In consonance with the goal to provide health for all under the National Health Policy, care should be universal, and free at the point of delivery.

  • A market-driven approach to providing district hospital beds for only those with the means would defeat the objective.

  • Given the already high prevalence of cardiac and pulmonary conditions, some arising from diabetes and hypertension, and cancers, having more beds for treatment is a necessity.

  • Strong oversight is also necessary to ensure that ethical and rational treatment protocols are followed in the new facilities, and procurement and distribution of drugs are centralised to keep costs under control.

  • Ultimately, the success of such systems depends on medical outcomes on the one hand, and community satisfaction on the other. Both dimensions must find place in a contract, and be assessed periodically.

  • A provision for audits, penalties and cancellation of contracts is essential. Given the recourse to tax funds for viability gap funding and use of public infrastructure, the operations should be audited by the Comptroller and Auditor General.


A common point between the NITI Aayog proposal and the national health policy is that both support government schemes which provide preferential care to government employees in the present and future. India’s privileged elite believe they deserve quality care before others. Economists such as Adam Smith and Amartya Sen have focused on justice as equally as economics—the two being inseparable, since without justice, economics is merely budgeting devoid of ethics.

Source:TH & Livemint

Leave a Reply