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High Cost of Healthcare

M L Satyan M L Satyan
13 Nov 2023

Very recently I watched a YouTube video on how the healthcare system in India is corporatized. It was based on a Zee News report. It contains data on “unwanted surgeries” – 55% heart surgeries; 48% uterus surgeries; 47% cancer surgeries; 48% knee replacement surgeries and 45% C-Section surgeries. These shocking data provoked my thoughts and hence this study to create awareness among the readers.  

All over India we note that private hospitals recommend tests and medicines unnecessarily, just for their profit. Not everyone can afford treatment in private hospitals. Many a time, the doctors in these hospitals give wrong suggestions to the patients in a hurry to make a quick buck. The result is that a vast majority of the common people fall into “debt trap” mainly to meet their medical expenses. 

Healthcare has become one of India’s largest sectors, both in terms of revenue and employment. Healthcare comprises hospitals, medical devices, clinical trials, outsourcing, tele-medicine, medical tourism, health insurance and medical equipment. 

Two sectors of healthcare system 

• The government (public healthcare system) comprises limited secondary and tertiary care institutions in key cities and focuses on providing basic healthcare facilities in the form of Primary Healthcare Centres (PHCs) in rural areas.

• The private sector provides a majority of secondary, tertiary, and quaternary care institutions with major concentration in metros, tier-I and tier-II cities.

• The Indian healthcare sector has seen a three-fold rise. It was expected to generate 27 lakh jobs in India between 2017-23, over 5 Lakh jobs per year.

• India’s public expenditure on healthcare touched 2.1 % of GDP in FY23 and 2.2% in FY22, against 1.6% in FY21, as per the Economic Survey 2022-23.

• In FY22, premiums underwritten by health insurance companies grew to Rs. 73,582.13 crore (US$ 9.21 billion). The health segment has a 33.33% share in the total gross written premiums earned in the country.

• The Indian medical tourism market was valued at US$ 2.89 billion in 2020 and is expected to reach US$ 13.42 billion by 2026. The E-health market size is estimated to reach US$ 10.6 billion by 2025.

Government Initiatives 

• Poshan Abhiyan is a centrally-sponsored scheme with the implementation of the scheme being done by States/UTs. To ensure that all Anganwadi Centres are equipped with Smartphones and Growth Monitoring Devices (GMDs) for mothers and infants, the Ministry has released revised guidelines for technical specifications and replacement of GMDs by the States.

• Under the Union Budget 2023-24, the Ministry of Health and Family Welfare has been allocated Rs.89,155 crore (US$ 10.76 billion), an increase of 3.43% compared to Rs.86,200.65 crore (US$ 10.4 billion) in 2021-22.

• Pradhan Mantri Swasthya Suraksha Yojana (PMSSY) was allocated Rs. 3,365 crore (US$ 0.41 billion).

• Human Resources for Health and Medical Education was allotted Rs.6,500 crore (US$ 780 million).

• National Health Mission was allotted Rs.29,085 crore (US$ 3.51 billion).

• Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) -- was allotted Rs.7,200 crore (US$ 870 million).

India is a land full of opportunities for players in the medical devices industry. The country has also become one of the leading destinations for high-end diagnostic services with tremendous capital investment for advanced diagnostic facilities, thus catering to a greater proportion of the population. 

Besides, Indian medical service consumers have become more conscious towards their healthcare upkeep. Rising income levels, an ageing population, growing health awareness and a changing attitude towards preventive healthcare are expected to boost healthcare services demand in the future. Greater penetration of health insurance aided the rise in healthcare spending, a trend likely to intensify in the coming decade. (Source: Healthcare Industry Report, May, 2023).


• Inadequate Access: Inadequate access to basic healthcare services such as shortage of medical professionals, a lack of quality assurance, insufficient health spending, and, most significantly, insufficient research funding.

• Low Budget: India’s public expenditure on healthcare was only 2.1% of GDP in 2021-22 while Japan, Canada and France spend about 10% of their GDP on public healthcare. Even neighbouring countries like Bangladesh and Pakistan have over 3% of their GDP going towards the public healthcare system.

• Lack of Preventive Care: Preventive care is undervalued in India, despite the fact that it has been shown to be quite beneficial in alleviating a variety of difficulties for patients in terms of unhappiness and financial losses.

• Lack of Medical Research: In India, R&D and cutting-edge technology-led new projects receive little attention.

• Policy-making: Policy-making is undoubtedly crucial in providing effective and efficient healthcare services. In India, the issue is one of supply rather than demand, and policy-making can help.

• Shortage in Professionals: In India, there is a shortage of doctors, nurses, and other healthcare professionals. According to a study presented in Parliament by a minister, India has a shortage of 600,000 doctors.

• Paucity of Resources: Doctors work in extreme conditions ranging from overcrowded out-patient departments, inadequate staff, medicines and infrastructure.

• Commercialization of healthcare: It results in bringing better facilities and infrastructure to the healthcare system. But this leads to high costs that are not affordable to many.

Way forward

• There is an urgent need to improve the infrastructure of public hospitals, which are overburdened as a result of India's large population.

• The government should encourage private hospitals because they make a significant contribution. At the same time there must be a clear policy to regulate the cost of treatment. 

• To improve the sector's capabilities and efficiency, more medical personnel must be inducted.

• In order to connect the dots in the health system, technology must be used. 

• Integrative medicine must be promoted. It emphasizes multi-modal interventions such as conventional health care approaches (like medication, physical rehabilitation, psychotherapy) and complementary health approaches (like acupuncture, yoga, and probiotics) in various combinations, with an emphasis on treating the whole person.

• It is very unfortunate that we in India have adopted the consumeristic culture copied from western countries. Hence, we must make sincere efforts to return to the simple lifestyle (food and living environment) of our ancestors to lead a healthy life.

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