Alleviating the scourge of private healthcare – Making Private Healthcare More Affordable | 24th December 2022 | UPSC Daily Editorial Analysis

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What's the article about?

  • It first analyses the reasons behind expensive private healthcare in India and then offers some suggestions to make it more affordable.


  • GS2: Issues Relating to Development and Management of Social Sector/Services relating to Health, Education, Human Resources;
  • Essay


  • India ranks poorly on multiple health financing indicators.
  • Its public health expenditure as a percentage of its GDP (1.28%) and share of general government expenditure dedicated to health (4.8%) remain akin to the poorest countries.
  • As a result, the role of private healthcare in keeping Indians healthy becomes crucial.
  • Private spending still constitutes nearly 60% of overall expenditure on health.
  • Unfortunately, due to the high cost of private healthcare, a significant portion of the population cannot afford it.

Why is private healthcare not affordable in India?

  • Dispersed sector:
    • The private healthcare sector is greatly fragmented in India. Thus, there exist great disparities between urban and rural areas. Quality private healthcare is generally limited to high-cost urban areas, thus excluding poor rural households.
  • Nonviable Public health insurance schemes:
    • Such schemes have unreasonable package rates on empanelled private providers with a weak regard for actual costs of care.
  • The legal and institutional framework in India requires a complete overhaul because it does not incentivize innovative practices and does not reflect the society's current situation.
  • Nexus between large private healthcare and political leaders:
    • Many States have their own Clinical Establishments Acts that are stuck short of full implementation. Strong political will and the purging of unnecessary restrictions is needed to allay resistance.
  • High cost of Medical education in India:
    • The high costs of medical education trigger cost recovery through resource-intensive ways of practice.
    • While multiple steps to reduce entry barriers in medical education have been taken lately, medical education costs have sharply increased over the past decade or so.

Suggestion to make private healthcare affordable in India:

  • To deal with dispersed sector problems, organised networks of providers like health maintenance organisations (HMOs), which can be regulated easily, can be created.
  • To deal with Nonviable Public health insurance schemes, business process innovations (BPI) that lie scattered across the healthcare landscape, can be utilised.
  • It is important to ensure that efforts to the initiatives that seek to make private healthcare more affordable should not affect the care quality.

Way Forward:

  • While we endeavour to make private healthcare more affordable, caution must be exercised that it doesn’t substitute adequate public spending on health.
  • No country in the world has ever achieved universal healthcare through predominantly private means.
  • Affordable private healthcare must only come to supplement strong public healthcare, while in turn having a complementary effect in enhancing the efficiency of government health spending.

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