Addressing systemic inefficiencies requires immediate policy integration, strategic investments, and the adoption of technology-driven innovations through multilateral collaborations.
Over the past few years, a recurring trend has emerged in India’s news media regarding healthcare: a stark contrast between the availability of medical services in rural and urban India.
For instance, in Odisha and Jharkhand, reports highlight how patients often travel 50-100 km—sometimes twice a month—for chemotherapy. The cost of transportation and lodging frequently exceeds the cost of treatment itself, placing an immense financial and emotional burden on already vulnerable families. The situation is further exacerbated by non-functional health centres, the absence of trained personnel, and a lack of last-mile service delivery and proper referral systems.
Meanwhile, in metros like Delhi and Bengaluru, a healthcare revolution is underway, fuelled by technology. Telemedicine, digital health records, and home-based monitoring systems are transforming patient experiences in urban India.
This disparity goes beyond geography and infrastructure; it reflects a fragmented health system struggling to deliver integrated and equitable care. Bridging this gap requires systemic reforms, including closing the digital divide, strengthening primary healthcare, and ensuring last-mile access to quality services.
India has a strong track record in public health—from eradicating smallpox to achieving polio-free status. These successes showcase the country’s capacity for large-scale interventions, surveillance, and community engagement. Yet, the COVID-19 pandemic exposed deep vulnerabilities: fragile primary care, workforce shortages, broken supply chains, and a widening digital gap that left millions without timely care.
Core challenges in India’s health system
India’s public health expenditure remains among the lowest globally—just 2 per cent of GDP, compared to 16 per cent in the USA and 4.8 per cent in Thailand. While increased investment is essential, inefficiencies in spending and gaps in utilisation pose additional challenges. For many households, a health emergency means debt, asset sales, or delayed treatment—healthcare remains a financial burden rather than a safeguarded right. The issue is not just how much is spent, but how effectively these resources reach the grassroots level.
Non-communicable diseases (NCDs) have become one of India’s leading health crises. Accounting for around 5.87 million (60 per cent) of all deaths in the country (GBD study, ICMR-PHFI), NCDs such as diabetes, hypertension, cardiovascular diseases, chronic respiratory illnesses, cancers, and mental health disorders are no longer limited to urban populations or older age groups. They are widespread, often undetected, and poorly managed, particularly in rural and underserved areas. India’s healthcare system, historically designed to tackle acute and infectious illnesses, must now evolve to address chronic diseases, mental health, and elder care. Workforce adaptation is key—frontline workers and primary healthcare providers need training in chronic disease management and mental health interventions.
The existing system is not entirely to blame—there is also a deeply ingrained public perception that treats NCDs as less urgent than acute, episodic illnesses. It is crucial to move beyond this mindset, prioritise NCD prevention, and ensure proper healthcare support. Without this shift, India risks facing a dual healthcare crisis—lingering infectious diseases compounded by a rising tide of chronic illnesses—an unsustainable trajectory for a nation aspiring to global leadership.
Strengthening the health system
The lesson is clear: India must transition from fragmented interventions to comprehensive Health System Strengthening (HSS). This means systemic policy integration and better infrastructure management to ensure equity, effectiveness, and long-term sustainability through public-private partnerships. The National Health Policy (NHP) 2017 and various digital health initiatives mark important first steps, but true transformation demands a paradigm shift.
The private sector—including hospitals, clinics, and insurance—accounts for over 32 per cent of current health expenditure. When combined with out-of-pocket expenses (39 per cent), this figure exceeds 60 per cent (As per National Health Assessments – 2024 report). Approximately 70 per cent of Indians seek outpatient care, and 58 per cent seek inpatient care from private healthcare providers (Niti Ayog data).
The reliance on the private sector for both healthcare services and financing has significant policy implications—especially as India moves towards Universal Health Coverage (UHC).
We need to ensure that this reliance doesn’t translate into exploitation of patients, which can be done by strengthening the licensing system, and improving the process by which facilities are given accreditation (e.g. NABH). We also need regulatory oversight, including pricing caps on essential services and medicines to ensure that the private sector does not arm-twist the public (especially in the wake of a public health emergency).
Also, the high out-of-pocket expenses call for collective action for both the public and private sectors to improve the utilisation of financial protection schemes and a strong primary healthcare system. The private sector’s contribution to national health data is limited, making surveillance and planning difficult (as per PSI’s Report on Advancing Private Sector Reporting). We need to build or expand existing mechanisms so that private sector data can be meaningfully incorporated into national platforms like the Health Management Information System (HMIS) and the Integrated Health Information Platform (IHIP).
This convergence—anchored in interoperable data standards and strategic incentives—can improve surveillance, sharpen policymaking, and enhance accountability. However, achieving this will require encouraging private sector participation through appropriate incentives and clear data-sharing guidelines. In doing so, we move closer to a healthcare system that is not only more responsive and accountable but also more equitable—one that serves every person, especially the most vulnerable.
Integrating AI-based solutions in India’s healthcare
India’s health system stands to gain significantly from emerging health-tech and pharma-tech innovations. AI-driven platforms, smart supply chains, and digital tools can streamline care delivery, close access gaps, and optimise resource use. For instance, AI-powered chatbots and decision-support tools can equip frontline workers with real-time diagnostics, treatment protocols, and referral pathways. When embedded into public health programs, these technologies can strengthen pharmaceutical logistics and ensure uninterrupted access to essential medicines—particularly in underserved and remote areas.
India’s healthcare system stands at a crossroads—fragmented and overstretched, yet brimming with transformative potential. Addressing systemic inefficiencies requires immediate policy integration, strategic investments, and the adoption of technology-driven innovations through multilateral collaborations.
A healthier nation will not emerge from isolated fixes but from a fundamental reimagination of its healthcare system—one that is grounded in data, designed for people, and built to last.