Healthcare paradox: More access, but who pays?

There is something deeply unsettling about a healthcare system in which the patient can become financially sick before becoming medically well.

Just the other day, a neighbour rushed his elderly father to a well-known hospital after he complained of severe chest pain. The family assumed the hardest part was over once admitted. What followed was a bewildering maze of tests, consultations, procedures and bills. By the time the patient was medically stable, the family was financially shaken. Why haven’t policymakers asked this question yet: What happens when access to healthcare improves faster than the quality, transparency and value of the care being delivered?

India's healthcare industry is scaling high with expanding hospital chains, mushrooming medical colleges, improved insurance penetration, and growing PE interest in hospitals, diagnostics, health-tech and pharmaceuticals. Is this growth story a great one for Indians? Probably yes.


But shouldn’t we build a healthcare system that is genuinely better? Perhaps the metrics are not exactly right for India. The number of hospitals built, beds added, health-tech growth, or policies sold are not the right metrics. Quantity, affordability and access matter. But none of them can substitute for quality.

Even after decades, India's health expenditure by the government is still below 2% of GDP (with private investments, it is nearing 4%). Out-of-pocket expenses are between 39% and 46% of total expenses for an individual, which is one of the highest in the world. Government data is lower of course because policymakers take media limelight for reduction. Crores of Indians are still carrying a substantial part of their health insurance in their wallets, despite valid policies.

And health issues happen when the wallet is least prepared. A sickness cannot be postponed like new clothes or a trip. That is where India's healthcare model shows the stress. The patient enters the system at perhaps the weakest moment of his life, with limited medical knowledge, little ability to judge alternatives and almost no capacity to negotiate prices. The provider knows considerably more: The insurer only knows the policy fine print by heart, the hospital knows how to maximise revenue per patient, and the pharma company knows the drug economics, while the patient just knows that he is not well and in discomfort.

Such an information imbalance would have triggered loud consumer-protection calls, but not in India. For the healthcare industry, it’s just another day.

Metrics are meaningless here. The number of medical colleges in India rose from 387 before 2014 to 823 today, while MBBS seats more than doubled from 51348 to 129000. A medical college in a metro does not automatically put a doctor in a district hospital in eastern Uttar Pradesh. The education is so expensive (Rs 50L and above in private) and the salary so paltry (barely Rs 6000 for an MBBS), a doctor will never be willing to go to remote villages.

There is also another financial trap. NITI Aayog estimates that around 40 crore people from the famed “Middle Class” lack adequate financial protection for healthcare. They are neither poor enough to fall within government-supported schemes nor affluent enough to regard private health insurance as an insignificant expense. This is a bleak situation. One major disease for a family member can turn a household into deep poverty and despair. We all know of many such families who have sold their house for funds and then begged for cloud funding for treatment. NITI Aayog research has documented households borrowing, selling assets or relying on relatives to meet hospital expenses. In its study of hospitalised children, about 18% of respondents reported borrowing, selling assets or seeking financial help. There is a serious systemic issue.

The best hospitals with latest equipment and eminent specialists fail in India for good patient care. Registration at one counter, payment at another. Specialists behave like Maggi 2-minutes and prescribe more tests without spending more time, no follow up calls from the hospital, and so on. Worse when it comes to procedures and processes. For instance, even if the doctor discharges at 9 am, the discharge summary won’t be ready before 5 pm in most hospitals. Yet, they all display quality certificates on walls. As of Dec 2025, there are 50000 public health facilities that have received National Quality Assurance Standards certification. But care is far from satisfactory… how many patients receive safe, timely, effective treatment and leave without being financially destroyed?

Indubitably, India needs both private and public money in healthcare. Just as we did with our constitution, we need a hybrid policy that combines the best the UK’s NHS for process, the German system for outcome efficiency and our own “jugaad”. We don’t need a USA-type unaffordable system. So what shall policymakers do?

First, mandate hospitals to do transparent billing. Patients should know what a procedure costs upfront, what insurance covers and what comes out of their own pocket. Wherever clinically feasible, standardised treatment packages should be the norm, not unpleasant surprises.

Second, give the “missing middle” a layer of financial-protection. NITI Aayog has already proposed affordable, comprehensive insurance products for this population. But avoid policies that require magnifying lenses to read the hidden fine print. Bring affordable premiums, decent outpatient and medicine coverage, and more transparent claims processes.

Third, monitor pharma and diagnostics integrity. The recent tragedies involving contaminated medicines are grim reminders that healthcare begins much earlier—with what enters the patient's body and with whether the information reaching the doctor is accurate.

Fourth, emulate the Delhi and Kerala models to put primary healthcare in the driver’s seat. A healthcare system that waits for a disease to become expensive before taking it seriously is a time bomb. Early detection, prevention, chronic-disease management and affordability will keep people healthier. Hospitals should not be allowed to turn people poorer.

Finally, stop accrediting hospitals for having the right paperwork and hold them accountable for patient outcomes. Quality is about reporting infections, complications, re-admissions, surgical mortality, waiting times and patient complaints. If the numbers are consistently ugly, accreditation must be suspended.

What India needs is a system in which getting sick does not become a financial punishment for having survived long enough to need care.