On 27 October 2026, a bench of the Supreme Court in Delhi was hearing a public interest petition. Before the bench of Justice Vikram Nath and Justice Sandeep Mehta, the story of one patient was placed, and it laid bare the state of India’s healthcare system. The wife of a drug distributor was being treated for cancer at a large private hospital. A chemotherapy injection that the dealer himself could buy on the market for ₹11,000 was one the hospital would not allow to be brought in from outside, and it added the same injection to the patient’s bill at ₹1.30 lakh.
The bench asked a pointed question: Can any justification be offered for this open plunder? Why is there such a vast gap, and where does the money leaving the patient’s pocket ultimately go? The court’s remark made headlines across the country’s major news outlets.
Several other startling facts emerged during the hearing. The court pointed out that a saline drip line that a retailer gets for just ₹15 is sold on the hospital bill for ₹250. The bench also observed that although government schemes such as Ayushman Bharat provide health cover of up to ₹5 lakh, ordinary families are still having to pay heavy hospital bills. The court remarked acerbically that around 90 per cent of medicines still fall outside the ambit of price control, and that the Centre’s recent decision touches only a very small part of the market.
Additional Solicitor General Aishwarya Bhati, appearing for the Centre, argued that the government keeps its pricing policies under constant review. The court said in plain words that a bill of ₹1.30 lakh for an injection costing ₹11,000 cannot be called an ordinary adjustment. The bench said bluntly that these are people’s lives, not a commercial trade.
For the private hospitals, senior advocate Mukul Rohatgi argued that private hospitals have to make up for the shortcomings in the country’s public healthcare infrastructure themselves. He said that reducing profit margins on medicines could disrupt the hospitals’ day-to-day operations, since they have to keep their facilities running round the clock.
The court rejected this argument outright. The bench said hospitals can sustain themselves by other means, but an institution that already charges for every service, such as beds, tests and operations, cannot sell medicines to patients at 100-200 times their price. After a detailed hearing, the Supreme Court reserved its verdict and directed all parties to submit their written arguments.
This was not an isolated question that arose suddenly. On 29 September, too, the court had expressed deep concern over expensive cancer drugs. At the hearing on 12 October, the court had described the government’s reply, which set a 30 per cent margin cap on cancer drugs, as inadequate, and had asked why no such cap could be imposed on the other essential medicines.
Mukul Rohatgi’s argument that private hospitals make up for the gaps in public infrastructure is a claim that will be evaluated in this article, along with other issues. If private hospitals are indispensable because the government system has serious gaps, it becomes essential to examine what those gaps in government hospitals actually are, and how an ordinary patients ends up paying for essential services our of their own pockets.
Just before this heated debate began in court, the Union Ministry of Chemicals and Fertilisers took a major step on 8 October. The ministry announced that the trade margin on all non-scheduled cancer drugs would be capped at a maximum of 30% over the Price to Retailer (PTR) to arrive at the MRP. The government estimates that this will bring a drop of up to 70 per cent in the MRP of some cancer drugs and will save patients across the country about ₹2,500 crore directly each year.
It is very important to understand the difference between ‘scheduled’ and ‘non-scheduled’ drugs here. For drugs under the schedule, the government already fixes a ceiling price, an upper limit on the price. For non-scheduled drugs, however, there is no such control, which leaves room for arbitrary profit among drug companies, distributors and hospitals. The government’s latest decision is meant for this second category.
This is not the first time the government has taken such a step. Earlier, in February 2019, the National Pharmaceutical Pricing Authority (NPPA) had imposed a similar 30 per cent margin cap on 42 selected non-scheduled cancer drugs. At that time, MRPs fell by up to 91 per cent, and annual savings of ₹984 crore were recorded across 526 brands. According to market data, India’s cancer drug market comprises roughly 225 drugs and 500 formulations, with annual sales of about ₹12,500 crore. Scheduled drugs account for roughly ₹2,250 crore of this.
In the early stages, citing government sources, 110 drugs (including 35 patented ones) were mentioned. Later, the NPPA’s formal gazette notification included a total of 137 non-scheduled cancer drugs. The revised prices are due to come into force across the country from 9 November 2026.
According to a media report of 28 October 2026, the NPPA has revised the MRP of 543 cancer-related drugs (including different brands and packs). In some selected cases, the cut was dramatic.
Even so, many of the costliest and life-saving drugs remain outside this ambit, and their prices are unchanged. For example, Keytruda, the much-discussed immunotherapy drug used to treat more than 21 types of cancer, is still being sold at ₹2,16,500. Ribociclib, a breast cancer drug, remains at ₹24,435. There has also been no relief in the MRP of Tagrisso, Tecentriq, Darzalex and Imfinzi.
Malini Aisola, an activist with the All India Drug Action Network (AIDAN), a group that campaigns for patients’ rights, says that one major reason is that the government has kept out of this price control those drugs which companies supply free or at heavy discounts under their ‘patient assistance programmes’ (PAPs). In these programmes, the third vial is often given free when two are bought. Aisola argues that she has been firmly opposed to keeping PAPs outside this ambit, because it gives hospitals and middlemen a chance to make huge profits. She also underlined that, under the formula by which the price cuts have been fixed in many cases, the hospital or distributor still earns a margin of up to 42.8 per cent. (This is the patient groups’ side of the argument, on which the government has taken a different view.)
So far, this entire discussion has revolved around big private hospitals and extremely expensive cancer drugs. But it is also true that the majority of patients in the country do not suffer from illnesses like cancer. According to government health surveys, the patients who visit hospitals most often in the country are those grappling with common problems such as fever, ordinary infections, hypertension and diabetes. For them, the biggest question is how light an ordinary patient’s pocket actually gets at a government hospital that is called a bastion of ‘free treatment’ on paper.
The most authentic and detailed answer to this question comes from the 80th round of the National Sample Survey (NSS). The Ministry of Statistics and Programme Implementation (MoSPI) conducted a comprehensive survey on Household Social Consumption: Health between January and December 2025. The survey gathered data from 1,39,732 households across the country (including 76,296 rural and 63,436 urban households), and its official results were made public on 20 April 2026.
The survey calculates Out-of-Pocket Medical Expenditure (OOPME) precisely. This simply means deducting from the total medical bill the amount that the patient gets back from an insurance company or employer. This medical expenditure includes all costs such as the doctor’s or surgeon’s fee, medicines, diagnostic tests, bed charges, and blood, oxygen and physiotherapy.
(Note: in the overall figures for all hospitals, average expenditure was ₹31,484 in rural areas and ₹38,688 in urban areas. The median was recorded at ₹10,500 in rural areas and ₹12,400 in urban areas.)
At first glance, the picture appears quite clear. Average expenditure on admission to a private hospital is about seven and a half times that at a government hospital (₹50,508 against ₹6,631). At the median level the gulf is even wider, ₹24,000 against ₹1,100, or roughly 22 times.
Two important points deserve attention here. First, ‘government hospital’ covers sub-health centres, primary health centres (PHCs), community health centres (CHCs) and Ayushman Arogya Mandirs. Second, private hospitals contracted or empanelled under PM-JAY, CGHS, ECHS, ESIC and various state health insurance schemes have also been counted in the ‘private hospital’ category. This means that a poor patient who went to a private hospital for treatment with a government insurance card has also contributed to this ₹50,508 figure, after deducting the scheme coverage amount.
The same trend is visible in institutional childbirth. The average out-of-pocket expenditure for deliveries in government hospitals is ₹2,299 (median ₹801), whereas in private hospitals the average jumps to ₹37,630 (median ₹32,000). About 96.2 per cent of all births in the country now take place in hospitals (95.6 per cent in villages and 97.8 per cent in cities).
The picture for outpatient departments, or OPDs, is slightly different. The national average out-of-pocket expenditure on treating an illness over a 15-day period was ₹861 (₹847 in villages and ₹884 in cities), and the median was ₹400. In government hospital OPDs, however, the average expenditure was only ₹289, and the median was zero, which means that more than half of the treatment in government OPDs was entirely free of charge.
Even so, the biggest and most worrying question is this: despite such low costs, what percentage of people still turn to government hospitals for admission?
According to analytical reports citing NSS 80th round data, the government hospitals’ share of total hospital admissions in the country has fallen to just 36.7 per cent. By contrast, in the previous survey (2017-18), government hospitals accounted for about 42 per cent and private hospitals for about 55 per cent. According to an analysis by Oommen C. Kurian, a health expert at the Observer Research Foundation (ORF), 57.9 per cent of admissions in villages and 64.6 per cent in cities in 2025 were recorded in private hospitals.
The plain meaning is that even today two out of every three patients in the country are compelled to take shelter in the private sector for hospital admission. To find the roots of this compulsion, we must look at what is actually going on ‘inside the gates’ of government hospitals.
It is vital here to understand the difference between average and median. Suppose ten patients are admitted to a hospital. Nine of them are treated at a very low cost, ₹1,000, but the expenditure of one seriously ill patient reaches ₹60,000. When you calculate the average in this situation, it comes to ₹6,900, whereas the reality is that nine patients paid only ₹1,000. The median is the exact middle point, with half of the patients spending above it and half below.
The median at government hospitals is ₹1,100, which means that at least half of the patients paid even less than that. But the average climbs to ₹6,631, which shows that there were also some patients whose expenses rose very high. Although the survey does not make clear what serious illnesses those high-spending patients were suffering from, the coming sections will make clear that the internal failings of the government system, such as the lack of medicines, tests and specialists, weigh most heavily on exactly those patients who need long and complex treatment.
The government also has a strong case to make about its achievements. The median expenditure of zero in government OPDs is evidence that the ‘Free Drugs Service’ and ‘Free Diagnostics Service’ launched in 2015 have had some effect on the ground. In rural areas, dependence on government facilities for OPD treatment has risen from 28 per cent in 2014 to 35 per cent in 2025. In addition, health insurance coverage in the country has also expanded rapidly. Whereas in 2017-18 only 14.1% of people in rural areas and 19.1% in urban areas had any insurance cover, in 2025 this has risen to 47.4 per cent in villages and 44.3 per cent in cities.
Government-sponsored health assurance schemes are driving the overwhelming majority of this growth.
But despite all this, the burden on the patient’s pocket has not been entirely eliminated. According to the ORF analysis, even families in the poorest fifth had to bear an average medical expenditure per admission, across all hospitals combined, of about ₹25,704 in villages and about ₹25,178 in cities, which is disturbingly close to the spending of the wealthiest groups. A Business Today investigation shows that the average total medical expenditure per admission across all hospitals has risen from ₹20,135 in 2017-18 to ₹37,858 in 2025.
Beyond this, behind these survey figures lies another hidden cost: non-medical expenditure. The survey counts only direct medical bills, while travel to and from the hospital, and the cost of lodging and food, are not included. In the previous round (2017-18), the average medical expenditure for admission to a government hospital was ₹4,452, but when travel and other non-medical costs were added, the total cost rose to about ₹6,050. In other words, the real financial burden on the common man’s pocket is far deeper than the figures seen in the headlines.
The assurance of ‘free treatment’ given to patients begins to crack on three fundamental fronts, the moment they step inside a government hospital. It is these three cracks- the unavailability of medicines, diagnostic machines lying idle, and vacant posts of specialist doctors- that break the patient’s trust and compel him to turn to the private market.
At a government hospital, the patients usually start facing the reality first at the hospital’s drug dispensing counter. Under health policy rules, any medicine the doctor writes on the prescription should be available entirely free from the hospital store. For this, state governments draw up their Essential Drug Lists (EDLs), the state medical services corporation buys medicines in bulk and delivers them to hospitals, and hospitals send in demand according to their needs. But the moment any one link in this supply chain breaks, an established sentence is written at the back of the doctor’s prescription: ‘Get this medicine from an outside medical store.’
Firm evidence of this chain breaking is recorded in various state-level audit reports of the Comptroller and Auditor General of India (CAG)-
The latest ground reports in the media also confirm the same reality. For example, in its report on Jaipur’s government hospitals, Rajasthan Patrika said that the claims of the free-medicine scheme were proving weak on the ground, and that on average 30 per cent of medicines are out of stock at the counter.
The poor, who come hoping for everything from the government hospital, bear the brunt of this shortage of medicines. Notably, no single institution keeps account of this shortfall. That is why the survey figure, in which the medicine amount is not shown separately, does not tell the whole story. The ₹15 saline drip that became ₹250, mentioned in the Supreme Court, was a story about a private hospital. The irony in government hospitals is that the medicine is either not there at all, or is there in such short supply that the patient is directed to private shops outside, where he has to buy the same medicine at full MRP.
After medicines, the second biggest channel that empties the patient’s pocket is diagnostic tests such as X-rays, ultrasound, CT scans, MRI and pathology tests. The ‘Free Diagnostics Service Initiative’ launched in 2015 was intended to make basic and advanced tests available free of cost to patients visiting government hospitals. This scheme is considered largely responsible for the median expenditure of zero in OPDs. But as soon as a patient is admitted in a serious condition and needs a CT scan or MRI, this free-service structure collapses.
A machine being present in the hospital and the patient actually getting the test are two entirely different things. To run a CT or MRI machine smoothly, trained technicians, radiologists, permission from the Atomic Energy Regulatory Board (AERB), and a timely annual maintenance contract (AMC) are needed. If even one of these links breaks, a machine worth crores gathers dust, and the patient is forced to knock on the door of a private diagnostic lab.
CAG audit reports have exposed this failure openly-
Uttar Pradesh: CT scan machines at the district hospitals of Banda and Saharanpur lay idle because there were no qualified technicians to operate them. The ultrasound machine at Banda’s women’s hospital was in the same state.
Uttarakhand: An audit of health institutions found that no hospital had taken out an annual maintenance contract (AMC) for its radiology equipment. Some X-ray machines had been out of order since 2015 and a mammography machine since April 2014.
Jharkhand: A severe shortage of pathology equipment (53 to 80 per cent) was recorded in district hospitals, and in many hospitals essential equipment was found useless because of technical faults or lack of repair.
Karnataka: In several district and teaching hospitals of the state (such as those in Vijayapura and Shivamogga, and KIMS in Hubballi), ultrasound machines proved useless for want of radiologists. In many district hospitals, CT scanners had not been installed at all.
The difference between village and city is visible too. According to a Moneylife report citing Sudhir Kumar Shukla of the Health Systems Transformation Platform, facilities such as specialists, medicines, blood banks and imaging are generally better in urban government hospitals, whereas rural centres refer patients elsewhere for tests, medicines or specialists, which pushes up the family’s expenses. Indranil Mukhopadhyay of O.P. Jindal Global University said in the same report that in chronic illnesses the cost of daily medication, repeated doctor consultations and periodic tests keeps recurring.
This problem is made more serious by the rising pace of non-communicable diseases (NCDs) in the country. According to the 2025 MoSPI survey, the morbidity rate in the survey period rose to 13.1 per cent, and about 43.9 per cent of people above 60 years of age suffer from some chronic illness. These illnesses, such as hypertension, diabetes and thyroid disorders, require patients to have blood and other tests repeatedly. When machines are found out of order at the government hospital every time, the heavy bill from a private lab breaks the back of a poor family each time.
Behind this crisis of medicines and tests lies another big truth: where, after all, are the doctors and specialists who provide the treatment? The annual report of the Union Ministry of Health and Family Welfare, ‘Health Dynamics of India’, is the most authentic document on this human-resource famine.
The shortfall of general doctors at primary health centres (PHCs) may appear to be less than four per cent, but the real and alarming crisis is that of specialist doctors. Under Indian health norms, every community health centre (CHC) in rural areas, serving a population of 80,000 to 1,20,000, must have four main specialists: a surgeon, a physician, an obstetrician-gynaecologist and a paediatrician.
But according to official figures from the Health Ministry, rural CHCs are carrying huge vacancies of these specialist doctors against sanctioned posts.
According to the 2022-23 report, in March 2023 the requirement for surgeons, obstetrician-gynaecologists, physicians and paediatricians at rural community health centres (CHCs) was 21,964, but only 4,413 were available. That is a shortfall of 17,551, or about 79.9 per cent. The shortfall was 83.3 per cent among surgeons, 81.9 per cent among physicians and 74.2 per cent among obstetrician-gynaecologists. District hospitals had 27,304 doctors and specialists in position against 33,964 sanctioned posts, which means about 20 per cent of posts were vacant.
Figures from different states make the crisis clearer-
This shortfall is neither new nor shrinking. It was 17,525 in 2014-15, 17,459 in 2018-19, 17,519 in 2020-21 and 17,551 in 2023. In 2005 it was 6,110. Specialists at CHCs rose from 3,550 in 2005 to 4,413 in 2023, but the requirement rose at the same pace. Dr T. Sundararaman, a former head of the National Health Systems Resource Centre and now associated with the Jan Swasthya Abhiyan, said on the causes that very few postgraduate (PG) doctors want to work in villages.
The ‘Health Dynamics of India 2023-24’ report was released on 12 May 2026. Medical Dialogues reported that more than 80% of specialist posts in Punjab’s CHCs are vacant, and that not one of the state’s 84 functioning rural CHCs has all four required specialists (surgeon, physician, obstetrician-gynaecologist and paediatrician). Citing the Hindustan Times, it wrote that Punjab has not made regular recruitment of specialist doctors since 2022. In Haryana, only 10 specialists were found against 34 sanctioned posts (70.6 per cent of posts vacant), and in Rajasthan 1,098 of 1,844 sanctioned posts were vacant (59.5 per cent). Experts said such shortages could lead to delays in diagnosis and treatment, higher health expenditure for families and poorer outcomes.
Nursing staff are under strain too. An analysis by PRS Legislative Research cites a Health Ministry statement of December 2023, according to which the country has one nurse for every 476 people, whereas the World Health Organization’s norm is one nurse for every 300 people.
The CHC is called the ‘first referral unit’ for this reason. It is supposed to have 30 beds, an operating theatre, X-ray, a labour room and a laboratory, and it takes patients from the four surrounding PHCs. When there is no surgeon, obstetrician-gynaecologist or physician even here, every serious case, whether a complication in childbirth, a broken bone, an abdominal operation or chest pain, has to be sent onward.
The direct effect of this severe shortage of specialists is that the operating theatres (OTs) of rural CHCs lie idle. Even routine treatment such as caesarean deliveries, appendix operations, hernia repairs or serious fractures cannot be carried out at these centres. As a result, the patient has either to travel a long distance to the district headquarters or a medical college, or, out of compulsion, to knock on the door of a local private nursing home.
When a government hospital offers no medicine, no working CT scan machine and no specialist doctor, an administrative compulsion is born, called ‘systematic referral’.
The government health system is designed as a hierarchy: sub-centre to PHC, PHC to CHC, and CHC to district hospital. But when the units at the initial level themselves lack specialists or basic facilities, doctors are forced to write “Referred to Higher Centre” on the slip.
During this referral process, the patient’s relatives have to bear several kinds of additional costs-
We must say clearly here that we found no public national data showing how many patients “referred” from government hospitals reached private hospitals and what it cost them. This link can therefore be joined only through signs in the evidence.
The first sign is the fall in the government share of admissions: from about 42 per cent (2017-18) to about 36.7 per cent (2025). The second is the ORF analysis that, despite insurance coverage having roughly tripled, the admission rate in 2025 is 27 per thousand population in villages and 32 in cities, whereas in 2014 it was about 35 and 44. ORF has said that more analysis is needed to find the reason. The third sign is the most direct: the argument of the private hospitals’ lawyer in the Supreme Court that they make up for the shortcomings of public infrastructure.
In other words, the very shortcoming for which the court cornered private hospitals has its roots in the government hospital’s medicine window, its diagnostic machine and its doctor’s chair. The question now is how much the government’s biggest scheme protects the patient once he steps outside the gate.
The Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (PM-JAY) promises every family cashless treatment of up to ₹5 lakh a year. In September 2024, all citizens aged 70 and above were also added. As of 28 August 2026, more than 38,700 hospitals across the country were empanelled under the scheme.
But having a card is no guarantee that your pocket will be spared, and the most concrete proof lies in a study done for the government’s own think tank.
In March this year, reports emerged that an evaluation study had been submitted to NITI Aayog’s Development Monitoring and Evaluation Office (DMEO). The study was conducted by IQVIA Consulting and covered 2,283 households in 13 states and union territories. According to it, the average out-of-pocket expenditure per admission of beneficiaries treated in private hospitals under PM-JAY was ₹53,965, while in government hospitals it was ₹21,827. The average expenditure of uninsured patients in private hospitals was found to be ₹74,847.
Only 35 per cent of beneficiaries had fully cashless treatment, while 65 per cent had to pay something out of pocket under one head or another. The biggest expenses were medicines, tests and travel. According to reports, the study acknowledged that transport costs are not covered by the scheme at all, and that medicines and tests which should have been within the package were often not available at empanelled hospitals.
Two cautions are necessary with these figures. First, we could not find the study’s original report in the public domain, so these figures are taken from media and analytical sources. Second, this study covers only PM-JAY beneficiaries, whereas the NSS figure of ₹6,631 is the average for all patients. The two numbers therefore cannot be directly added or subtracted. But one thing emerges from both together: out-of-pocket expenditure in a private hospital is several times that in a government hospital, even if the patient holds a government card.
This story should not be one-sided. A study of 772 people in Haryana found that the direct medical out-of-pocket expenditure of PM-JAY beneficiaries was about 65 per cent lower than that of non-beneficiaries. The abstract of the study puts the difference at ₹11,131 against ₹31,675. In empanelled private hospitals, non-beneficiaries’ expenditure was about three times that of beneficiaries, while in empanelled government hospitals the expenditure of the two was about equal. Indirect costs such as food, travel and loss of wages also remained outside the scheme and were sometimes higher for beneficiaries. In other words, the scheme has genuinely covered a large part of the private hospital bill, but not all of it.
The other side of this comes from the private hospitals. In Haryana, in August 2025, about 650 private hospitals suspended PM-JAY services in protest against ₹490 crore in unpaid dues. On 1 September 2026, the state’s empanelled private hospitals again shut Ayushman services for a day. An association of private hospitals in Jammu and Kashmir had warned that it would withdraw from the scheme from 1 July 2026, citing delayed claim payments and inadequate package rates. In a ground report by ThePrint, a hospital representative said it is not only a matter of dues: the package rates are below the cost of treatment and have remained the same since 2021.
This is the hospital’s side, and it needs to be examined. But place it alongside the NITI study and a pattern emerges. According to the study, medicines and tests that should have been included in the package often had to be obtained from outside by patients. Private hospitals are also accused of splitting packages into parts, billing separately and selling unnecessary services, charges that the CAG’s audit report on PM-JAY had also raised (IASGyan). We are not claiming that arrears or low package rates are the cause of these recoveries. We are saying only that both things exist at the same time, and in between is the patient’s pocket. In the same hearing, the Supreme Court bench had said exactly this: that families face heavy bills despite a ₹5 lakh scheme.
The survey’s out-of-pocket figure is medical expenditure only. The real burden of admission is larger than this, because many of the costs that accompany the patient fall outside this figure.
National figures for these non-medical components of out-of-pocket spending in the 2025 survey will appear in separate tables in the full report, and national analysis of them has not yet emerged on a large scale. Until it does, it is safe to assume that the figures of ₹6,631 and ₹50,508 are a minimum estimate of the real burden.
Now the question that is bigger even than the Supreme Court’s ‘where does the money go?’: who is bearing the total health expenditure in the country? The answer is found in the National Health Accounts (NHA). The Health Ministry released the estimates for 2022-23 on 27 May 2026. This is the most recent report available, but it should be noted that it is a picture of 2022-23, whereas the NSS survey is of 2025.
The positive part of the report first. Government health expenditure has roughly tripled over the past decade, to ₹3.85 lakh crore in 2022-23. Per capita government expenditure rose from ₹1,042 in 2013-14 to ₹2,786 in 2022-23, about 2.7 times. As a share of the country’s GDP, government health expenditure rose from 1.15 per cent to 1.43 per cent (1.48 per cent in the new GDP series). The share of health in total government expenditure rose from 3.78 per cent to 4.89 per cent.
The effect was visible in the pocket as well. The share of out-of-pocket expenditure in total health expenditure fell from 64.2 per cent in 2013-14 to 43.4 per cent in 2022-23, a drop of about 21 percentage points. Over the same period, the government’s share in total health expenditure rose from 28.6 per cent to 43.7 per cent. The share of ‘social security expenditure’, such as government insurance schemes and medical reimbursement, rose from 6 to 9.9 per cent, and the share of private insurance from 3.4 to 9.2 per cent.
Now read the same figures from the other side. In 2022-23 the government’s share was 43.7 per cent and the out-of-pocket share was 43.4 per cent. This means that of every ₹100 spent on health in the country, the government is putting in about ₹43, and families are paying about ₹43 from their own pockets. The rest comes from insurance and other sources. The out-of-pocket share has fallen considerably over the decade, but it is still almost equal to the government’s share.
Compare with the previous year and the picture gets more tangled. During the Covid period the government had made one-time additional expenditure, so in 2021-22 the out-of-pocket share had fallen to 39.4 per cent. According to an analysis by The South First, in 2022-23 total government health expenditure fell by more than ₹48,000 crore compared with 2021-22, and per capita out-of-pocket expenditure rose from ₹2,600 to ₹2,767. In other words, the trend over a decade is one of a falling out-of-pocket burden, but over the past two years this decline has stalled and partly reversed.
There is another way of looking at it as well. The Hindu, citing Sudhir Kumar Shukla of the Health Systems Transformation Platform, wrote that in ‘current health expenditure’ (excluding capital expenditure such as hospital buildings and machinery), the out-of-pocket share works out to about 49.9 per cent. That means families themselves bear nearly half of the day-to-day expenditure on treatment. The government’s figures and the expert’s calculation differ because their bases differ. But both show that out-of-pocket spending is still one of the biggest payers in the health system.
The National Health Policy 2017 had set a target of raising government health expenditure to 2.5 per cent of GDP. In 2022-23 it is 1.43 per cent. This gap is in itself one answer to this story: when medicines, tests and specialists fall short at government hospitals, someone makes up the difference. Either the patient’s pocket, or the private hospital, or both.
All the threads so far meet at one point. The Supreme Court asked private hospitals why a ₹11,000 injection costs ₹1.30 lakh. The private hospitals’ lawyer replied that they have to make up for the shortcomings of public infrastructure. The government’s own figures show that this gap genuinely exists: 80 per cent of specialists are missing at CHCs, machines at district hospitals lie idle without technicians, and audits find medicines missing from stock for months and years.
But this truth raises a second question, which the court has raised. Does the shortfall in public infrastructure determine that private hospitals may earn one hundred to two hundred times on medicines? And if the government, knowing of this gap, kept the ambit of drug price control very small, whose is the accountability? These questions are not ours; they have already been asked in court, and the answers are awaited.
Both sides must be recorded equally. Private hospitals say they run services round the clock and that the cost is recovered from medicines. The government says it has been reviewing prices, has imposed a margin cap on cancer drugs for the second time, and that insurance coverage has expanded rapidly. Patient groups say that there has been no relief on the costliest drugs and that the room for profit is still large. Each of these three positions holds a truth of its own. The one thing that remains constant among them all is the family’s pocket.
The next page of this story is yet to be written. Four things will determine what it looks like.
The drug distributor’s wife, whose story opened the court hearing, was one whose family said they could have bought the injection for ₹11,000. Had the same family gone to the OPD of a government hospital, then according to the survey, treatment would have been free in half the cases. But with a serious illness like cancer, they would have had to go further for tests, specialists and admission, and this is the turning point at which the promise of free treatment and the real expenditure figures begin to part ways.
The data from MoSPI’s 2025 health survey and the ‘Health Dynamics of India’ reports bear witness that India has made remarkable progress in taking institutional deliveries to 96.2% and in expanding health insurance. But this progress has still not achieved the basic goal in which an ordinary citizen can step through the door of a government hospital and get treated free of cost.
The average out-of-pocket expenditure of ₹6,631 on admission to a government hospital is not merely a statistic. It is living evidence of the level at which our public health supply chain is leaking: why medicines are missing from the counters, why diagnostic machines are gathering dust, and why the specialists’ chairs in rural CHCs lie empty. Read about any major accident or health crisis, and the news report also invariably includes that the injured persons were shifted or referred to that big hospital in the big city, usually the state capital. The rural
Until the country’s public health infrastructure is financially strengthened, primary health and OPD services are made fully free and effective, and the deployment of doctors in rural areas is ensured, the government’s claim of “free treatment” will remain on paper.
The Supreme Court’s remark of 27 October, ‘these are people’s lives, not a business’, is not only a warning to private hospitals; it is a mirror held up to the entire system of governance. Until everyone from policymakers to health administrators accepts the truth that health is not a commodity but a fundamental human right, this story of the patient’s pocket being picked will go on echoing through the corridors of every government and private hospital in the country.
An analytical deep-dive into why large-scale hydroelectric projects are strategically and economically vital for India. The piece explores the necessity of Himalayan mega-dams for grid stability, countering Chinese hydro-hegemony, and exposing the foreign financial networks behind recent infrastructure protests.
From finding a suitable donor to hospital registration and organ allocation, patients face medical, financial and geographical barriers. Unequal access, incomplete reporting and lifelong treatment make transplantation far more complicated than surgery alone for families.
As global supply chains fracture, the government is accelerating the National Strategy for Additive Manufacturing (NSAM 2.0). Discover how industrial 3D printing is replacing legacy manufacturing across India’s aerospace, defence, and infrastructure sectors to secure long-term strategic sovereignty.
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