By Ameer Shahul 

The most revealing number in India’s healthcare story after 12 years of BJP rule may not be the number of hospitals built, Ayushman cards issued or medical seats created. It may be 1.43 per cent. That was government health expenditure as a share of GDP in 2022–23 against the 2.5 per cent target set by the National Health Policy 2017.

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India has expanded almost every visible measure of healthcare. Medical colleges and seats have multiplied. The footprint of AIIMS has expanded. Ayushman Bharat has become one of the world’s largest publicly funded health insurance programmes. Yet the latest report of the Parliamentary Standing Committee on Health and Family Welfare finds a system still struggling with basic capacity, affordability and regulation.

Consider medical education. The number of medical colleges has risen to 818 and undergraduate medical seats have reached 1,28,875, an extraordinary expansion. But India’s problem was never simply the number of doctors. It was where they practise, who can afford them and whether the system has the infrastructure to use them. The Committee finds specialist shortages at rural community health centres of roughly 70-80 per cent. There are 17,788 building-less sub-centres. So India has produced many more doctors without solving the problem of distributing healthcare capacity.

Medical education has also become a major commercial sector, with private and PPP models playing an increasingly important role. When medical seats become valuable commercial assets, the integrity of regulation becomes crucial. This raises a question: Who regulates the regulator?

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The same tension runs through healthcare more broadly. The Committee, citing the NSSO 80th round (2025), says more than 60 per cent of hospitalisations and around 70 per cent of outpatient care are serviced by the private sector. Average hospitalisation expenditure is approximately Rs 6,631 in government hospitals against Rs 50,508 in private hospitals. The state does not have to charge a patient Rs 50,000 to impose a Rs 50,000 burden. It only has to fail to provide a realistic public alternative.

This is where the healthcare architecture takes another turn: Financial protection through insurance. Ayushman Bharat has helped millions of families obtain hospital care they might otherwise have been unable to afford. But insurance can pay the bill without controlling its price. If treatment costs Rs 5 lakh and insurance pays Rs 5 lakh, the patient may be protected from immediate financial ruin. But the healthcare system has still consumed Rs 5 lakh. If prices continue rising, somebody eventually pays — government, insurer, employer or patient.

Meanwhile, more than 40 crore Indians — the missing middle — remain outside comprehensive financial protection. Out-of-pocket expenditure, although it has fallen substantially, still accounted for 43.4 per cent of total health expenditure in 2022–23.

As healthcare becomes more expensive and the public system fails to keep pace with demand, private capital enters to fill the gap. Major transactions involving businesses such as Manipal Health Enterprises, CARE Hospitals, KIMS, Rainbow Children’s Hospital and several diagnostic chains illustrate the growing appetite for healthcare assets. Investors are attracted by recurring demand, consolidation opportunities and the ability to build scalable chains. Capital is not inherently bad for healthcare. India needs enormous investment. The question is what that investment produces. Does it create capacity in under-served districts? Does it make treatment cheaper? Does it strengthen primary care? Or does it acquire existing businesses, consolidate markets and pursue the most profitable segments of healthcare?

The 2026 Lancet Commission Report on a Citizen-Centred Health System for India argues for a stronger publicly financed and publicly provided health system as the foundation of universal healthcare. That should be the ultimate test — whether a family is less vulnerable when illness strikes. If the choice remains between a government hospital that may lack capacity and a private hospital it may struggle to afford, then something fundamental remains unfinished.

Shahul’s latest book is The Silent Syndicate: How Big Finance is Destroying India’s Healthcare