Source: The post Healthcare system in India has been created, based on the article “Building Health for 1.4 billion Indians” published in “The Hindu” on 29th August 2025. Healthcare system in India.
UPSC Syllabus Topic: GS Paper-2- Health- Government Policies & Interventions
Context: India’s healthcare system stands at a defining juncture. With over 1.4 billion citizens, the dual challenge is to ensure universal access while maintaining affordability and quality. Recent initiatives like Ayushman Bharat and the push for digital health highlight India’s transition from crisis-based care to preventive, inclusive, and technology-enabled healthcare.
Key Challenges
- Low Insurance Penetration: There are only 15–18% of Indians who are insured. The premium-to-GDP ratio is 3.7% vs the global average of 7%.
- Affordability Concerns: Even modest premiums (₹5k–20k) remain unaffordable for many people. Catastrophic health expenditure continues to push families into financial distress due to the absence of adequate risk coverage.
- Infrastructure Gaps: Tier-2 and tier-3 cities remain underserved despite India’s ability to deliver high-quality care at scale.
- Regulation & Trust Deficit: Unfair pricing, environmental factors, and lack of grievance redressal reduce faith in insurers.
- Skewed Investments: $5.5 billion private equity investment (2023) largely flowed to metros, leaving rural and semi-urban regions behind.
- Lifestyle & NCD Burden: Rising diabetes, hypertension, and chronic illnesses raise costs with inadequate preventive focus.
Way Forward
- Strengthening Insurance as a Risk Pool: There is a need to broaden coverage under PM-JAY, ensure fair reimbursement to private providers, and increase penetration beyond 500 million beneficiaries.
- Focus on Prevention: the insurance should be redesigned to cover outpatient & diagnostics. Also, there is a need for national campaigns for lifestyle modification and NCD awareness.
- Leverage Technology: There should be the use of AI for early detection (sepsis, cardiac issues). Also, there is a need to expand telemedicine under Ayushman Bharat Digital Mission for rural outreach.
- Enhance Regulation & Transparency: Strengthen IRDAI mechanisms, ensure fair pricing, and build trust to encourage uptake.
- Equity in Investment: Direct capital is needed towards tier-2 and tier-3 cities, primary care, and training of healthcare professionals.
- Public–Private Partnerships (PPPs): There is a need to align state capacity with private sector efficiency for inclusive and sustainable models.
Question: India’s healthcare system is at an inflexion point. Discuss the challenges and the way forward to ensure affordable and inclusive healthcare for all.
