India's public healthcare system faces a serious capacity and affordability challenge, with government hospitals having only 0.79 beds per 1,000 population, while treatment in private hospitals can cost eight to 15 times more than in government facilities, a parliamentary standing committee on health and family welfare has flagged. The panel has also raised concerns over low public spending on secondary and tertiary healthcare, excessive billing and diagnostic procedures in the private sector and inadequate financial protection for millions of people.
The committee said: "The Committee, however, notes with concern that excessive patient loads in government hospitals directly compromise consultation times and service efficiency. The Committee, nevertheless, believes that improving the perceived and actual quality of public healthcare is the most sustainable method to reduce the national burden of out-of-pocket expenditure (OOPE)."
The observations form part of the 176th report of the department-related parliamentary standing committee on health and family welfare, which was presented in the Rajya Sabha and laid on the table of the Lok Sabha on 7 August 2026. The report contains 368 recommendations covering public healthcare infrastructure, private hospital regulation, health insurance, medicine costs and access to secondary and tertiary treatment.
Public Health Spending Remains below Policy Target
The committee has highlighted that government health expenditure is around 1.43% of GDP, significantly below the 2.5% target envisaged under the national health policy.
It has also questioned the existing distribution of public health expenditure. According to the report's analysis of national health accounts data for 2022-23, the government allocates 51% of its health expenditure to primary healthcare, while only 28% goes towards secondary care and 11% towards tertiary care.
The committee acknowledged the importance of preventive and community-based healthcare but warned that inadequate spending on higher levels of care is contributing to greater dependence on private hospitals.
"The disproportionately low spending on secondary (28%) and tertiary (11%) care drives citizens towards expensive private facilities, resulting in catastrophic out-of-pocket expenditure," the committee said.
It has recommended greater capital investment in community health centres, district hospitals and state-run medical colleges, along with upgrades to ensure that secondary-care facilities can provide round-the-clock emergency, obstetric and paediatric services.
The panel has also called for better accommodation and salary incentives for postgraduate doctors working at CHCs and for vacant positions at CHC level to be filled on priority.
Private Treatment Costs Several Times Higher
The committee has cited the 80th round of the national sample survey conducted in 2025 to highlight the substantial difference in treatment costs between public and private hospitals.
According to the report, the average cost of hospitalisation was ₹6,631 in government hospitals compared with ₹50,508 in private hospitals.
The disparity extends to outpatient care. The average cost of a single outpatient treatment during the 15-day reference period was ₹289 in government hospitals, compared with ₹1,447 in private facilities.
Childbirth showed an even wider gap, with the report citing expenditure of around ₹2,299 in government hospitals against ₹30,000 to ₹40,000 in private hospitals.
The committee said the cost differential is contributing to a deepening affordability crisis, particularly for households requiring treatment for serious illnesses such as cancer, heart disease and kidney failure.
Excessive Billing and Unnecessary Diagnostics Flagged
The panel has also expressed concern over complaints involving excessive billing, unnecessary diagnostics and procedures, lack of price transparency and insurance claim disputes in private hospitals.
It has recommended an immediate mechanism to standardise and cap charges for essential treatments, diagnostic tests and routine procedures across private hospitals.
Hospitals should also be required to disclose treatment costs before admission, the committee said. It has proposed a unified, fast-track grievance redressal mechanism or ombudsman to examine excessive billing and settle insurance-related disputes.
The committee has further recommended mandatory quality assurance and price transparency across private clinical establishments instead of relying only on voluntary accreditation.
It has asked the health ministry to work with state governments to ensure uniform adoption and strict enforcement of the Clinical Establishments (Registration and Regulation) Act, 2010.
Public Hospitals Need More Capacity
The report says India's public healthcare network remains particularly important for rural and lower-income populations but suffers from infrastructure shortages, inadequate manpower and overcrowding.
The committee has argued that expanding public-sector capacity is essential to reducing out-of-pocket spending because patients frequently turn to private hospitals when government facilities cannot provide timely or specialised treatment.
It has called for accelerated capacity-building in government hospitals, particularly in high-demand urban centres, including expansion of bed capacity and recruitment of specialised medical personnel.
The panel has also recommended strict implementation of Indian Public Health Standards so that government hospitals have adequate medicines, diagnostics and modern amenities.
Large Private Sector, Uneven Regulation
The report notes that the private sector accounts for more than 60% of inpatient care and 70% of outpatient care, particularly in urban areas.
While corporate hospital chains have expanded advanced treatment capacity and adopted technologies such as robotic surgery, AI-based diagnostics and telemedicine, the committee has expressed concern about the uneven regulation of the wider private healthcare sector.
It has pointed to the proliferation of small clinics, nursing homes and diagnostic centres and uneven implementation of the Clinical Establishments Act across states.
The committee has also called for stronger oversight of the growing commercialisation of healthcare, including greater scrutiny of pricing and transparency.
Insurance Coverage Leaves Gaps
The committee has also highlighted the vulnerability of people who do not have access to either government health schemes or affordable private insurance.
It has recommended a well-designed voluntary and contributory insurance model involving the government and private sector to widen financial protection.
The panel has also argued that existing insurance arrangements do not adequately cover outpatient treatment, diagnostics and other expenses that can continue to push households into debt even when hospitalisation is insured.
It has recommended broadening national health insurance schemes to include outpatient treatment and diagnostics.
Jan Aushadhi Kendras in Hospitals
To reduce the cost of medicines, the committee has recommended establishing Jan Aushadhi Kendras within all district hospitals, CHCs and large private hospitals empanelled under government schemes.
The panel said medicines remain a significant component of household healthcare expenditure and that expanding access to affordable generic medicines could help reduce financial distress.
It has also recommended technology-enabled audits to ensure that pregnant women and newborns receive the free medicines, diagnostics and transport promised under government programmes.
More Public Investment Needed in Secondary, Tertiary Care
The committee's recommendations seek a shift from a healthcare model heavily dependent on private providers for specialised treatment towards one in which government hospitals have sufficient infrastructure and manpower to deliver secondary and tertiary care.
It has recommended faster implementation of the Pradhan Mantri Ayushman Bharat Health Infrastructure Mission, including critical-care blocks and integrated public health laboratories at the district level.
The panel also wants greater integration between public infrastructure and Ayushman Bharat PM-JAY, so that government hospitals can treat a larger share of insured patients rather than leaving public funds to flow predominantly to private providers.
The committee has further recommended a comprehensive review of the GST (goods and services tax) framework applicable to healthcare.
It has proposed establishing an additional independently administered AIIMS facility or a fully equipped satellite centre in northern Delhi to decentralise tertiary-care demand and improve access for the wider region.
The 176th report contains recommendations for the health ministry and other authorities rather than binding directions. Their implementation will depend on subsequent government decisions.
The committee's central concern, however, is clear: expanding insurance coverage without simultaneously strengthening public hospitals could leave patients financially protected on paper but still dependent on a private healthcare system where treatment costs are several times higher.
