By M Muneer, Fortune-500 advisor, start-up investor, and co-founder, Medici Institute for Innovation X: @MuneerMuh
India’s healthcare system, for all its advances, remains deeply skewed — profits disproportionately favour hospital owners while doctors, patients, and healthcare workers are left to grapple with systemic inequities. This glaring imbalance reflects a troubling reality: a sector that puts profit over equitable care, yet has escaped meaningful reform. How has an industry, where one player reaps most of the gains, resisted disruption for so long?
At the heart of the issue lies the privatisation and commercialisation of healthcare, where hospitals operate largely as profit-driven entities. Private players control nearly 70% of healthcare infrastructure, and deliver 80% of outpatient and 60% of inpatient care. This translates to exorbitant fees for patients, exploitative working conditions, and a system resistant to innovation and accountability.
Doctors, the backbone of healthcare delivery, earn modest salaries compared to the revenues hospitals generate. Entry-level doctors in reputable private hospitals earn `50,000-70,000 per month, while nurses and paramedics earn much worse. Meanwhile, patients bear escalating costs, with out-of-pocket expenses accounting for over 60% of healthcare spending in India.
This creates a vicious cycle: millions remain without access to quality care, while hospital owners consolidate wealth and power. Disrupting this status quo is imperative. The solution lies in shifting focus from profit to patient-centric, equitable, and efficient delivery. Here’s how this transformation can be achieved.
Embrace tech-driven solutions: Visualise a futuristic mirror stationed in a hospital OPD, scanning a patient’s face for 30 seconds and producing a spectrum of vitals, cardio health, physical and psychological states, and even blood results through facial blood flow recognition. In under two minutes, preliminary diagnostics are complete at a fraction of conventional costs, freeing doctors for clinical assessments. This is no longer a fantasy. Yet, hospitals resist, wary of artificial intelligence’s (AI) incursion for obvious reasons: it will eliminate a major revenue stream.
Digital technologies like telemedicine, AI, and wearable devices will improve accessibility, affordability, and efficiency. During the pandemic, teleconsultations surged by over 500%, triggering their potential as cost-effective and scalable. AI-driven diagnostics, developed by companies like Forus, Qure.ai, and Niramai, are improving the early detection of diseases such as tuberculosis and breast cancer. These technologies and wearables reduce errors and costs, especially in rural areas with limited access to specialists.
A PwC study estimates that digital health tools could save India $10 billion annually by enhancing operational efficiency and preventing disease progression.
Promote decentralised care: Centralised care in large urban hospitals contributes greatly to the high costs and inefficiencies. Decentralised models including community health centres and home-based care offer a sustainable alternative. Strengthening primary healthcare infrastructure through public-private partnerships can reduce reliance on tertiary care.
States like Kerala and Delhi have shown how robust primary healthcare systems can deliver better outcomes at low costs. But they need continual upgrade and better service quality to be competitive.
Companies like Care24 are pioneering home-based care for post-surgical recovery and chronic disease management. These business models reduce costs while enhancing patient satisfaction.
Disrupt payment models: India’s fee-for-service model incentivises unnecessary treatments and prolonged hospital stays. Shifting to value-based care, where hospitals are compensated based on patient outcomes rather than services rendered, will realign incentives and reduce costs. Globally, such models have shown promise. Pilot plans have demonstrated lower healthcare costs and improved care quality.
Expanding and refining insurance schemes like Ayushman Bharat can protect patients from catastrophic expenditures, but stringent monitoring is essential to prevent private hospitals from exploiting the system. (Many hospitals have lower rates for the non-insured.)
Empower professionals: Redistributing revenues more equitably is critical. Doctors, nurses, and paramedics deserve better pay and working conditions. During the pandemic, health workers took immense personal risks but were compensated inadequately. Fair wages, rather than symbolic gestures, are needed to sustain morale and commitment.
Encouraging health professionals to collectively own and manage hospitals can help redistribute profits. Cooperative hospitals in Kerala serve as a successful example. Additionally, regulations mandating profit-sharing between hospital owners and employees could ensure fair compensation.
Redefine unit of business: The current hospital-centric model incentivises maximising per-patient revenues, leading to unethical practices such as expensive tests, prolonged hospitalisation, and unnecessary surgeries. This profit-driven system has caused mistrust and contempt.
Disruptors like Clinikk, a chain of small clinics run by a two-member team, aim to minimise patient costs. By combining fixed annuities with connected insurance, free medicines, and essential tests, Clinikk focuses on reducing costs to earn profits and doctors spend more time with patients, prescribing fewer tests and medications. This approach has the potential to disrupt traditional hospital models.
Reform policies: The government must address systemic issues that perpetuate inequity. There is a cap on prices of essential drugs and medical devices like stents and knee implants. Such measures should be expanded to include diagnostic services and surgical procedures to make care more affordable.
Start-ups and innovators should be incentivised with tax breaks and funding to accelerate the adoption of disruptive technologies in healthcare. Investment in government hospitals and clinics should be increased. India spends only 1.5% of GDP on healthcare, far below the global average of 6%.
Rationalising fees across private colleges or nationalising them can improve the financial returns for medical professionals, address shortages of doctors, and make medical education more accessible.
Road ahead
Disrupting the system is no small feat. Resistance from entrenched players, lack of regulatory enforcement, corruption, and the sheer scale of the problem are significant hurdles.
Narayana Health, which pioneered low-cost, high-volume surgeries, is a good example of how standardising procedures and leveraging economies of scale can reduce costs without compromising quality. Similarly, the Aravind Eye Care System has delivered millions of cataract surgeries at a fraction of the cost charged by private hospitals.
As Gandhiji once said, “The best way to find yourself is to lose yourself in the service of others.” In healthcare, this service begins with creating a system that values every stakeholder equally and prioritises the well-being of the nation over profits.
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