India’s Hospital Boom Expands Care—but Leaves Millions Priced Out of Critical Treatment
MIRAJ, India — On a recent visit to Miraj, the small western Indian town where I grew up, I counted more than 50 multi-specialty hospitals, diagnostic centers and health clinics along a five-kilometer stretch of road.
Many of them have opened in just the past five years, even though the town has long been a regional medical hub in Maharashtra state.
Their proliferation tells the story of an unprecedented boom in India’s private healthcare industry. Hospital chains are adding thousands of beds each quarter, diagnostic companies are pushing into smaller towns, and medical institutes are raising hundreds of millions of dollars in public markets to expand across the country.
In early August, Manipal Health, India’s largest multi-specialty hospital, raised nearly $1 billion in what became the country’s second-largest initial public offering this year.
The sector has also become a favorite of global private equity investors. Between 2022 and 2024, Indian healthcare and pharmaceutical companies recorded nearly 600 mergers and acquisitions and private equity transactions valued at more than $30 billion. According to Grant Thornton, 40% of those funds went to hospitals. More recent data the consultancy provided to the BBC shows the sector raised an additional $20 billion over the past two years.
The investment wave has undeniably improved access to health infrastructure. But it has also priced millions of Indians out of care.
That divide is at the center of a new report from a government panel, which describes India’s expanding healthcare economy as strikingly unequal and warns of a “deepening affordability crisis” in private hospitals.
The panel found that treatment in private hospitals is often five to 10 times more expensive than in government facilities, with the gap widening further for serious illnesses such as cancer, heart disease and kidney failure.
It said the “unbridled” growth of clinics, nursing homes and diagnostic centers, combined with uneven enforcement of regulatory standards, has produced “glaring disparities in both the quality and cost of care in private sector, leaving patients vulnerable to arbitrary pricing and substandard practices.”
The report also blamed “rampant commercialization of private healthcare” for rising patient grievances over excessive billing, unnecessary diagnostics and soaring costs for routine procedures such as childbirth. Those practices, it said, are “directly pushing vulnerable households into catastrophic debt and distress, causing asset sales.”
Earlier this week, the food and drug regulator in Maharashtra, India’s richest state, found intravenous sets being sold in hospitals at an astonishing profit margin of 2,800%, raising concerns about medical device pricing, which it said was almost entirely unmonitored.
The government panel offered a range of recommendations: capping hospital room tariffs at the level of the nearest three-star hotel, regulating prices for essential treatments, diagnostics and routine procedures across all private hospitals, and issuing standard treatment guidelines to prevent over-treatment. It also red-flagged foreign ownership of more than 51% in hospital chains.
India’s private hospitals have pushed back against some of the proposals.
In a statement to the BBC, Siddhartha Bhattacharya, secretary general of NATHEALTH, an association representing India’s private healthcare sector, said the government should focus on reducing the structural costs of healthcare delivery—including taxes, land, capital, manpower and regulatory compliance—rather than capping rates.
Healthcare delivery, he said, is capital-intensive and investment-heavy, and the return on capital employed “hovers at around 10%, significantly lower than many other sectors of the economy, which often generate 1.5-2.5 times higher returns on capital.”
He also cautioned against comparing hospital tariffs with hotel tariffs, saying that view overlooks key compliance requirements hospitals must meet, such as infection control standards and patient safety norms, all of which add to costs.
The country’s biggest hospital chains, from Max Healthcare to Fortis, have warned that arbitrary caps will “stifle” investment in the sector and scare away foreign investors if they cannot earn risk-free returns.
Relatives of patients wait inside a government-run hospital in Kolkata. [NurPhoto via Getty Images]
Public health experts say price regulation deserves serious debate, especially because private healthcare in India is currently a seller’s market.
“With big foreign private equity money coming in, especially in tertiary care, it is people outside the country who are basically making decisions on price points. That should not be the case,” Dr. Srinath Reddy of the Public Health Foundation of India told the BBC.
Government intervention is even more critical given the “super profits” many hospitals have been making, said Vivek ND, another health policy expert.
“The increased emphasis of these hospitals on conducting various tests, pushing for diagnostics which might not be required, must also be looked into,” he said.
Some proposals—such as a fairer goods and services tax regime recommended by the panel—could help reduce the cost of private healthcare, according to Vivek, though he added that wider consultations with the industry are needed before any recommendation becomes binding.
Dr. Reddy agreed. Before the government imposes price caps, he said, it needs proper nationwide estimates of the precise cost of private healthcare.
“Costs will differ state to state and city by city, so you can’t impose blanket caps across the country,” he said.
India is weighing a cap on hospital room rates. [Hindustan Times via Getty Images]
But as the debate heats up, experts say the broader priority must be strengthening public healthcare to bring down patient costs—a step the panel also recommends.
India’s government health expenditure currently stands at 1.4% of gross domestic product, below the 2.5% target set in the National Health Policy nearly a decade ago and far behind the 5% prescribed by the World Health Organization.
The panel’s report notes that disproportionately low spending on secondary and tertiary healthcare has driven citizens toward expensive private facilities, resulting in “catastrophic out-of-pocket expenditure.”
The government will “have to up its game” with more public investment to reduce ordinary people’s dependence on private hospitals, Vivek said.
At the same time, India needs an estimated $300 billion in additional healthcare investment to build capacity. A large share of that capital will inevitably come from private domestic and foreign investors, leaving policymakers with a difficult task: ensure investors do not flee while making sure ordinary people are not priced out of essential services.
Follow BBC News India on Instagram, YouTube, X and Facebook.