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Nearly 60 percent of private hospital users reported dissatisfaction with public hospital quality or said they trusted doctors more at private institutions.
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India’s public healthcare system is battling a crisis of confidence. Despite offering free or highly subsidised care, public hospitals often play second fiddle to their private counterparts. The real rush? It is towards private hospitals.
According to the NSS Health Survey (2017-18), nearly 2 in every three patients opted for private healthcare across hospitals, doctors, and clinics, while only one-third turned to public facilities. Interestingly, this preference spans across economic strata. Among the poorest Indians (monthly per capita expenditure below Rs1,250), more than 65 percent still chose private facilities when seeking medical help.
This is striking given that 78 percent of those who went to private hospitals were not covered by health insurance, neither public nor private. They ended up paying for private care nearly six times more than what public hospitals charge. The average amount per hospitalisation case ranges from Rs27,347 to Rs38,822 in private hospitals versus Rs4,290 to Rs4,837 in public hospitals. Many even travelled outside their district or state, spending Rs700 to Rs900 on transport per case, despite nearby public options.
To afford timely care in the absence of health coverage, most patients (75 percent) rely on savings, and on borrowings (13 percent). The financial consequences are dire. A recent NITI Aayog report found that over 7 percent of India’s population is pushed into poverty every year due to healthcare costs.
The question is, why is there an overwhelming preference for private healthcare?
Nearly 60 percent of private hospital users reported dissatisfaction with public hospital quality or said they trusted doctors more at private institutions. Other studies have similarly found that patients perceive private hospitals as offering better value for money and superior in terms of service quality, including infrastructure, resource availability, administrative efficiency, shorter wait times, staff attitude, and information transparency. Clearly, there is a trust deficit in public healthcare.
But it all boils down to one pivotal question: Does opting for private care truly result in better medical outcomes? Or are we simply paying a premium for the illusion of better healthcare?
The answer, predictably, is far from binary. India’s private healthcare landscape is marked by stark heterogeneity across the quality of care, size of facilities, and cost structures. At one end of the spectrum are high-end institutions like Medanta – The Medicity, Indraprastha Apollo Hospitals, Fortis Memorial Research Institute, Max Healthcare, and Kokilaben Dhirubhai Ambani Hospital. These ‘five-star’ hospitals rival the most advanced facilities in OECD countries. At the other extreme, several studies have flagged alarming lapses in smaller private clinics, ranging from poor standards of care and unqualified personnel to inappropriate clinical practices.
Yet, despite the variability in quality and the financial burden associated with high-end care, Indian patients continue to prefer private healthcare. This highlights the central role that trust plays in shaping healthcare decisions in India. Internationally, too, studies in the US confirm that trust in the healthcare system significantly shapes health-seeking behaviour.
Also read: How GE HealthCare wants to tap India for the next 10 years
This shows a clear need to include trust as one of the focus areas in healthcare policies. So far, healthcare policies in India have mainly focused only on improving health access and healthcare utilisation. There should be a focus on reshaping perceptions around public healthcare and helping patients believe in the competence and empathy of government doctors.
A shining example of a successful health campaign through the public system has been the Pulse Polio program launched in 1995, which officially led to the eradication of deadly Polio from India in 2014. Today, we need much more than adequate vaccination. Considering the remote geographies and diverse cultures in India, trust in public healthcare can only be built by the active involvement of local communities. A system encompassing well-trained healthcare professionals, government, civil society, infrastructure, inventory, and delivery mechanisms is required to ensure reliable healthcare facilities at both primary and specialised levels.
As in the case of financial inclusion through United Payments Interface (UPI), we can use applications and social media to create awareness about the availability of public healthcare schemes and services. A conveniently overlooked sight outside government hospitals is patients and their family members waiting all night to get an appointment for the day. This practice must be done away with. If people do not even know whether their patients will get a medical opinion in government hospitals, how can we expect them to trust public healthcare facilities?
With over 85 percent of households in India owning at least one smartphone with internet access, the government can leverage this wide digital reach by launching an app for online booking at government hospitals. The app can show available time slots along with details of the doctors, including their qualifications and experience. Adding local language options would make the app more accessible. It can also send follow-up messages to remind patients about check-ups, medicines, and ask for updates on their health condition. Finally, a proper feedback mechanism within the app can ensure that genuine grievances can be quickly addressed at the hospital level.
With all of the government machinery at its disposal, public healthcare can be made even more effective by leveraging the communication and delivery channels of other departments. For instance, awareness about the government’s healthcare initiatives can be spread through government schools and postal offices. Better healthcare awareness leads to improved preventive care and early diagnosis, reducing the risk of serious ailments and hospitalisations.
Post-COVID pandemic, people have increasingly realised that health is indeed the real wealth of any society. Hence, at a broader level, adequate investment in public healthcare should be a priority. However, as of 2023-24, India’s total public expenditure (state and central government) on healthcare is at 1.9 percent of GDP, which is woefully short of the global average of 6.14 percent. There is an imminent need to invest much more in public healthcare to instil trust in public healthcare.
Still, shifting patient preference isn’t as straightforward. The psychological phenomenon of inertia explains why many individuals stick to their familiar choices, avoiding the perceived effort of change, even when presented with rational alternatives. In such cases, instead of attempting to uproot preferences, the policy approach could focus on integrating private healthcare into public systems. This might include empanelling more private hospitals under publicly funded insurance schemes or strengthening public-private partnerships for service delivery. Some efforts in this direction have yielded mixed results. Private hospitals are reluctant to join or leave the ambitious Ayushman Bharat scheme due to insufficient reimbursements or delays in payments by the government. The ultimate agenda is health coverage, whether it comes by reimbursing costs at private facilities or delivering free, high-quality care through public hospitals.
At the end of the day, the public-versus-private debate misses the larger picture. What matters most is creating a healthcare system that is accessible, affordable, effective, and above all, trusted. Only then can we move closer to a future where every patient receives the care they need, regardless of the door they walk through.
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[This article has been published with permission from IIM Bangalore. www.iimb.ac.in Views expressed are personal.]
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