TL;DR: The Parliamentary Standing Committee’s 176^th Report highlights a high (43.4%) out-of-pocket health expenditure, driven by heavy private sector dependence, high drug costs, a 40-crore uninsured “missing middle,” and acute public bed shortages. It recommends a legally binding 2.5% GDP spending target, private rate capping, and outpatient insurance. 

Context

India’s healthcare system has expanded significantly over the past decade, with increases in medical colleges, doctors, nurses, hospital beds and primary healthcare facilities. Government spending on health and the coverage of publicly funded health schemes have also increased, contributing to a decline in households’ out-of-pocket expenditure (OOPE) as a share of total health expenditure. However, affordability and accessibility remain concerns. A large share of healthcare utilisation continues to take place in the private sector, where treatment costs are substantially higher than in government facilities. Medicines, diagnostics and outpatient care also remain major sources of household expenditure and are not adequately covered by existing insurance mechanisms. Against this backdrop, the Department-related Parliamentary Standing Committee on Health and Family Welfare examined the affordability and accessibility of healthcare in the public and private sectors and made recommendations to strengthen financial protection and public healthcare delivery.

Who compiles this data?
The findings presented in this article are based on the 176th Report of the Department-related Parliamentary Standing Committee on Health and Family Welfare, Affordability and Accessibility of Healthcare Facilities in Public and Private Sector, presented in Parliament on 7 August 2026. The report draws on data from several sources, including National Health Accounts (NHA), National Sample Survey Office (NSSO/NSO), and National Family Health Survey (NFHS).

Where can I download clean & structured data related to this?

Clean, structured, and ready-to-use collection of datasets related to healthcare is available on Dataful. There are collections covering different aspects of healthcare such as NFHS, Infrastructure, Diseases Outbreak, and more.

 Key Insights

• According to NHA, India’s out-of-pocket expenditure (OOPE) fell from 64.2% of total health expenditure in 2013-14 to 39.4% in 2021-22 but increased to 43.4% in 2022-23. Government health expenditure stood at 1.43% of GDP, below the 2.5% target envisaged under the National Health Policy, 2017.

• Nearly 60% of hospitalisations and 70% of outpatient services are delivered by the private sector. The Committee noted that this dependence exposes households to higher and often unregulated costs, particularly for medicines, diagnostics and outpatient care.

• Average out-of-pocket expense for a hospital stay in a private facility is ₹50,508, compared to ₹6,631 in a government facility. This means patients pay roughly 7.6 times more out-of-pocket when receiving care in private hospitals than in public health facilities, which exposes households to significant financial risk and potential debt whenever public healthcare is unavailable or inadequate.

• This wide disparity is also reflected in childbirth care, where private hospital deliveries average ₹37,630 out-of-pocket compared to just ₹2,299 in public facilities.

• In government hospitals, where bed charges and doctor fees are nominal, medicines constitute the single largest out-of-pocket expense for patients. They represent roughly 35% of total hospitalisation costs in both rural areas (₹2,603 of ₹7,330) and urban areas (₹2,241 of ₹6,413), underscoring that out-of-pocket drug purchases remain a primary financial burden even within public healthcare facilities.

• While NITI Aayog estimates that around 70% of India’s population is covered by some form of health insurance or assurance, nearly 30%, or over 40 crore people, remain outside effective financial protection. The Committee identifies these people as the “missing middle”, including informal-sector workers and self-employed people who may not qualify for government schemes but cannot afford existing private insurance.

• Despite the expansion of healthcare infrastructure, India has 1.3 hospital beds per 1,000 population, compared with the WHO norm of 3.5. The public sector accounts for only 0.79 beds per 1,000 population, with significant regional disparities.

Recommendations of the committee

Based on these findings, the standing committee made some key recommendations as listed below.

• The committee recommended establishing a legally binding, multi-year fiscal roadmap to scale Government Health Expenditure (GHE) from 1.43% to the National Health Policy target of 2.5% of GDP. This will ring-fence public health funding and protect household budgets from volatile, out-of-pocket medical costs.

• Formulation of a binding regulatory mechanism to standardise and cap prices for common hospital procedures, diagnostic tests (such as PET-CT and MRI), and surgical implants across all private facilities. It also called for mandating absolute price transparency prior to admission and enforcing the nationwide implementation of the Clinical Establishments Act to curb excessive billing.

• Enforcement of strict caps on trade margins across pharmaceutical supply chains and expansion of price controls under the National List of Essential Medicines (NLEM). The committee advised expanding the physical footprint of Jan Aushadhi Kendras to all public hospitals and mandating generic prescribing to eliminate out-of-pocket drug expenses.

• Broadening public health schemes like PM-JAY to formally cover outpatient consultations (OPD), diagnostic evaluations, and recurring drug costs for chronic illnesses. Additionally, the committee recommended introducing a low-cost, voluntary, and contributory insurance model tailored specifically for the 40 crore “missing middle” population.

• Establishing a dedicated Healthcare CAPEX Fund to rehabilitate rural primary and secondary health infrastructure. To address specialist shortages, the committee directed State Governments to create fast-track recruitment boards to fill the critical 79%+ specialist vacancy gap at Community Health Centres (CHCs) in strict alignment with IPHS standards.

Key Numbers

• 43.4% – Out-of-pocket share of total health expenditure in 2022-23.

• 1.43% vs 2.5% – Public health spending (% of GDP) vs National Health Policy target.

• 7.6x – Hospital stay cost multiplier in private vs government facilities.

• 40 Crore+ – Uninsured “missing middle” population lacking financial protection.

• 1.3 vs 3.5 – Hospital beds per 1,000 people vs WHO benchmark