It is an accepted fact that the government is unable to cope with demand of the healthcare services. The government is unable to provide comprehensive quality healthcare. Infrastructural bottlenecks in public system have made the State and Central Governments to invite private players to deliver critical healthcare. There is a big opportunity for private healthcare to fill up this gap.

The private sectors have the potential to contribute to the health industry as they can get the financial aid from bankers, venture capitalists, pharmaceuticals, business houses, etc.

Healthcare no longer is restricted to providing just health service but it has evolved into a competitive, performance –driven industry, which demands the best management skills related to manpower, technology and finance. To provide this qualitative healthcare, it becomes important for the entry of private players which are blessed with funds.

The recent NHP, 2017 lays emphasis on systemic strengthening and strategic engagement with the private sector to comprehensively improve health service delivery in the country.

Will privatization of healthcare work in India?

  • India opened up markets to private participation 30 years ago and reaped its benefits on multiple dimensions.
  • As the general pattern shows, the value delivered for prices charged—or ‘value for money’—has risen in arenas that have come to be dominated by private players and also boast of a fair degree of competitive intensity.
  • However, two critical sectors that have gone the private way, even as state provisions withered, should cause us profound unease: education and healthcare.
  • Neither can operate on a laissez-faire model, given their special need for oversight, nor can our trend of service privatization be relied upon to give us the base of human capital needed for long-term economic success.
  • At another level, both are welfare assurers and thus ought to have the government as their predominant both are welfare assurers and thus ought to have the government as their predominant provider.
  • With state inadequacies exposed by the covid pandemic, our need to attain a balance is particularly acute in healthcare, where less than a fifth of all Indians avail of public facilities, as estimated.

Benefits of Privatization

  • Access to Specialized Healthcare: PPP model would improve accessibility to specialized health care in terms of human expertise, technology and equipment
  • Enhance Infrastructural Quality: PPP model would provide a mechanism for private sector to engage with the public utilising government facilities and infrastructure of district hospitals. A viability gap funding by the state government needs to be set up for this.
  • Economies of Scale: Private parties would share ambulance services, mortuary services and blood banks with the district hospitals while public hospitals benefit from superior quality of human resources as well as increased capital of private players
  • Better Diagnosis: It would ensure timely diagnosis and detection of diseases given the expedition of advanced medical devices reducing regional disparity in provision of such services
    • GeneXpert devices to diagnose TB
  • Holistic Medical Growth: Expansion of Private-sector servicesà Greater investment in research and developmentà Greater procurement of medical infrastructureà Job creation and growth in the medical field

Challenges associate with privatization of healthcare:

  • Privatization will increase the gap between rich and poorwhich will encourage survival of the richest, which cannot be the goal of any civilized society.
  • The public hospitals offer subsidized and other free services which makes most of the people move away from private hospitals.
  • The uninsured patientswill suffer from high bills of the treatment.
  • The lack of regulation of private playersis likely to exploit its clients and customers either financially or physically.
  • There is no answerability of private sectorto government regulatory board over their functioning and operations.

Measures needed:

  • Government should make the guidelines regarding the provision of services provided, areas of involvement, quality of services providedand many more such factors before opting for privatization of healthcare sector.
  • Multidisciplinary approachwith public health experts taking the lead role can help in establishing a better healthcare environment in India.
  • States should create a health advisory committee with expertsfrom the faculty of public health, business management/health administration institutions, not-for-profit health NGOs, for-profit health organizations, and state health departments.
  • Block-wise analysis up to sub-centre levelshould be done for each district in order to have a shared understanding of strengths and weaknesses of the health system, activate joint action plans, minimize duplication of efforts, and optimize scarce resources.
  • Computerization of the health service input and output data according to the institutions shall be a primary requirement to identify better performing institutions/individuals based upon agreed minimum indicators for strengthening accountability in the system.
  • separate public health cadre at district levelshould be created with suitable avenues for upgradation of educational qualification to postgraduate level, i.e. Master of Public Health and MD in Community Medicine.

Way forward:

  • The goal of the private firms should not involve only profit-making as their motivation for the provision of quality services but they should also focus on efficiency and effectiveness in healthcare.
  • Privatization is beneficial if the structures are set properly, otherwise, it will defeat the purpose and goal of healthcare.
  • For ensuring equitable representation of both private and public sector interests, it is necessary that the governing body includes members nominated from the private sector also.
  • Government should study the breadth of the healthcare landscape and benchmark the standards with other developing and developed countries and identify critical areas and gaps.


The primary responsibility for providing affordable universal healthcare services rests on the state. A well regulated private sector based on the pillars of trust, accountability and efficiency can be a boon to India’s citizens.

Notify of
Inline Feedbacks
View all comments