Healthcare in India: Features of one of the most privatised systems in the world

September 1, 2009

By Pinaki Chaudhuri, Sanhati

Americans are currently engaged in a fierce debate regarding healthcare reforms – there is a growing demand for healthcare insurance coverage for all its citizens. Further, there is also a demand that the government should provide for healthcare insurance just like many other developed nations in the Western world. See this article for a basic orientation in the US healthcare debate (

Let us now turn our attention to India. Here, the healthcare industry is dominated by private capital and its growth spiral is almost unregulated. On the other hand, 65 per cent of our population does not have access to modern medicine. It is even worse if one looks at the rural/urban divide : about 80 per cent of doctors, 75 per cent of dispensaries and 60 per cent of hospitals are located in urban areas. Since the process of liberalisation kicked in, the health infrastructure provided by the government has almost broken down. The overall private-public spending on healthcare is very little – it accounts for 4.8 per cent of India’s GDP. Of this, 3.6 per cent is contributed by the private sector and only the balance 1.2 per cent by the Government.

Despite such bleak conditions there is hardly any co-ordinated public demand for revamping the healthcare sector so that proper services are equitably accessible to all segments of the population. In such circumstances, it is instructive to revisit two in-depth studies (published in 2006) which can help us to get a better understanding of the situation in India.

1. Health System in India: Crisis & AlternativesClick here to read [PDF, English] »

Published by National Coordination Committee, Jan Swasthya Abhiyan, October 2006. Jan Swasthya Abhiyan is a peoples’ movement which sees itself as a part of the larger social and political movement to radically restructure India. It has a strong democratic content.


(i) Long Standing Weakness of the Public Health System in India
(ii) How Much Does Our Government Spend on Healthcare? How Much Do We Spend on Healthcare from Our Personal Resources?
(iii) Is Deterioration of the Public Health System Linked with Expansion of the Private Medical Sector?
(iv) The Private Medical Sector – The Camel Which Pushed the Arab Out of the Tent
(v) Brain Drain, Medical Tourism and Outsourcing
(vi) NRHM – Health System Restructuring but in which Direction?
(vii) Communicable Disease Control Programs
(viii) Indigenous Systems of Medicine & Homeopathy
(ix) Conclusion-Towards a System for Universal Access to Healthcare

Essential points

# India has the largest number of medical colleges in the world

# India produces among largest numbers of doctors in the developing world. These doctors are exported to many other countries, and are considered among the best in the world.

# This country gets ‘Medical tourists’ from many developed countries reflecting the high standard of medical skill and expertise here. They seek care in its state-of-the-art, high-tech hospitals which compare with the best in the world.

# Turning to medicines, we find that this country is the fourth largest producer of drugs by volume in the world and is among the largest exporter of drugs in the world.

Despite all these resources, the majority of citizens has very limited access to quality Healthcare, and has poor health indicators (,

* There are low levels of immunisation – in fact less than half of the children are completely immunised (added to this, complete immunisation coverage has declined in recent years).

* Similarly, the minimum of three checkups during pregnancy remains unavailable for half of all pregnant women.

There are massive inequities in access to healthcare – while the rich avail of most modern and expensive health services, the poor, especially in rural areas do not get even rudimentary healthcare.

* Incredibly, hospitalisation rates among the well off are six times higher than rates among the poor

* Despite such a large drug industry which exports medicines across the globe, about two-thirds of the population lack access to essential drugs.

* This is a country of paradoxes where women from well off families suffer due to unnecessary cesarean operations – in some urban centres close to half of deliveries are done by operation – while poorer rural women frequently die during childbirth due to lack of access to the same cesarean operation at time of genuine need.

* Although people spend a lot on healthcare (the poorest spend one-eighth of their total income on healthcare), the government spends much less. Of the total health spending in the country, all levels of government make less than one-fifth, while the remaining major portion is shelled out by ordinary citizens from their pockets. This makes the healthcare system in this country one of the most privatised systems in the world.

* Taking loans or selling assets pays for two out of five hospitalisation episodes. The proportion of people who are unable to access any form of treatment due to inability to pay is quite large and increasing.


2. Government Health Expenditure in India: A Benchmark StudyClick here to read this study [PDF, English] »

Published by Economic Research Foundation, October 2006.

Contents –

(i) Patterns of health expenditure in India
(ii) Central government health expenditure since 1993
(iii) Health expenditure of 14 state governments since 1993
(iv) Evidence on health outcomes
(v) Conclusions and directions for further research

Finally, here is a link to the health profile of all Indian states –

and a study on the healthcare situation in West Bengal, which has been ruled by the Communist Party of India (Marxist) since 1977 –


6 Responses to “Healthcare in India: Features of one of the most privatised systems in the world”

  1. anand Says:
    September 3rd, 2009 at 22:26

    Very enlightening information

  2. pr Says:
    October 1st, 2009 at 16:43

    A major chunk of medical tourists in India are from the SAARC countries, Middle East and some African nations. Europe and north America still form a small proportion of the total(they are definitely increasing in number, with international accreditation and insurance). These corporate hospitals catering to medical tourists are basically minting money.Health care has become a business!!

  3. v.ramarao Says:
    June 22nd, 2010 at 11:43

    health care considered as a profitable trade.common man is neglected a lot in India.PRIMARY CARE IS NOT IMPROVED.BUT MEDICAL TOURISM MADE HISTORY

  4. Kraig Vanzee Says:
    January 13th, 2011 at 19:55

    Healthcare in India: Features of one of the most privatised systems in the world at Sanhati – Great tittle, but when I’m reading this stuff I’m not sure about it … But it’s your blog, so you can write here whatever you want. Anyway have a good day!

  5. Suvina Says:
    March 20th, 2012 at 07:48

    Here is small survey that I am Undertaking to assess awareness about Universal Healthcare coverage program in India

  6. A. tagore Says:
    June 6th, 2012 at 22:28

    AN REALISTIC EXCELLENT ARTICLE. My best regards and congratulations. Looking foreward for many more such great studies.

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