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Alleviating the Menace of Private Healthcare

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December 24, 2022

Why in news?

The private health sector plays a dominant role in Indian healthcare system, yet, the discourse on addressing high healthcare costs remains limited to the government.

What is the status of healthcare in India?

  • India’s public health expenditure as a percentage of its GDP is 1.28%.
  • The share of general government expenditure dedicated to health is 4.8%.
  • Per capita health spending growth has not kept pace with rising incomes.
  • Private spending still constitutes nearly 60% of overall expenditure on health.

How about the private sector in India?

  • The private sector in India is dispersed, with marked inequities between rural and urban areas and widespread market failure.
  • The income disparities, backwardness, and under-regulation aided the private sector to differentiate into a host of organisations that provide care at inexpensive rates but of poor quality.
  • Such contexts offer few incentives for consolidation and achieving this solely through public health insurance is difficult.

Sustainable Development Goal 3 – “Ensure healthy lives and promote well-being for all at all ages"

What is the need of the hour?

  • Overarching policies - There is a need for overarching policies that drive down private healthcare costs even for the self-paying consumer with little or no government subsidy.
  • A wide range of policy instruments that alter the operating conditions of the private sector have to be enshrined in the national health policy.
  • Business process innovations - The business process innovations (BPI) such as the innovations by Aravind Eye Clinic and Narayana Hrudayalaya that find little mainstream policy or research attention can be propagated.
  • Task shifting - The National Commission for Allied and Healthcare Professions Act, 2021 can be a boost to task shifting in healthcare to hold down costs, especially in under-resourced settings.
  • Regional health boards - Regional health boards (in Canada) that have organised care equitably within regions to bring down healthcare cost, can be replicated in India as well.
  • Medical education - The high costs of medical education warrants policy attention.
  • Affordable health insurance - Creating affordable and effective private health insurance products is another important option.
  • Affordable private healthcare must only supplement strong public healthcare, while in turn having a complementary effect in enhancing the efficiency of government health spending.



  1. The Hindu | Alleviating the scourge of private healthcare


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