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Role of the Private Sector in Escalating Medical Inflation
The dominance of the private sector as the provider of healthcare induces inflationary pressure on the household budget and potentially on the government health budget through the insurance route. Analysing 75th round NSS data, it is found that treatment costs in private commercial hospitals as well as in private charitable hospitals are manifold compared to public facilities.
The Union Budget 2020–21 emphasised greater reliance on the private sector for the provision of healthcare and proposed the setting up of new hospitals and attaching certain medical colleges to existing district hospitals in the public–private partnership (PPP) mode. The establishment of new hospitals in the PPP mode was announced to run the Pradhan Mantri Jan Arogya Yojana (PMJAY) in tier-2 and tier-3 cities without empanelled hospitals. There is no doubt that the private sector is gradually being put in the driver’s seat in Indian economy and the health sector is not an exception. India is also one among countries with the lowest share of healthcare spending in gross domestic product (GDP).
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