From Coverage to Care: Strengthening India’s Public Health System

After Reading This Article You Can Solve This UPSC Mains Model Questions:

India’s healthcare challenge is no longer just about financial protection but about ensuring actual access to care. Discuss the key challenges in India’s public health system and suggest measures to strengthen public sector hospital capacity. 15 Marks (GS-2, Social Justice)

Introduction

• India’s public health sector stands at a defining moment expanding insurance coverage through schemes like Ayushman Bharat PMJAY has broadened financial access, yet the system continues to grapple with deep structural gaps in quality, affordability, and equity.
• The recently released 80th Round of the Household Social Consumption (Health) Survey by the National Statistical Office (NSO) India’s first comprehensive health survey in the post-COVID era reveals that having an insurance card still does not guarantee access to a hospital bed, making the journey from coverage to care India’s most urgent health policy challenge.

Background: Key Highlights of the NSO 80th Round Health Survey

• Survey Scope: The National Statistical Office (NSO) released the 80th Round of the Household Social Consumption (Health) Survey India’s first comprehensive post-pandemic health survey and after Pradhan Mantri Jan Arogya Yojana–PMJAY attained maturity, covering 1,39,732 households (76,296 rural; 63,436 urban) to assess healthcare access, affordability, and utilisation. Moreover, previous surveys of the same kind (64th and 75th rounds) had shown that most Indians lacked any form of health insurance.

A. Health-Seeking Behaviour

• PPRA Nearly Doubles: The Proportion of Population Reported Ailing (PPRA) rose from 6.8% to 12.2% in rural and 9.1% to 14.9% in urban areas (2017–18 to 2025), signalling improved proactive health-seeking behaviour, not a deterioration in health.
• Epidemiological Transition: India shows a decline in infectious diseases and rising Non-Communicable Diseases (NCDs) including diabetes and cardiovascular conditions aided by Information, Education and Communication (IEC) efforts and community screening.

B. Out-of-Pocket Expenditure (OOPE)

• Median ₹11,285 Per Hospitalisation: Over half of all hospitalisations involve low expenditure; only a few high-cost cases surgeries and cancer push up the mean. At public health facilities, the median OOPE per hospitalisation is just ₹1,100, and for outpatient care it is zero supported by the Free Drugs Service Initiative (FDSI), Free Diagnostics Initiative (FDI) (2015), and 1.84 lakh Ayushman Arogya Mandirs (AAMs).
• Poor Benefit Most: The bottom two consumption quintiles show a declining OOPE trajectory, confirming that government interventions are effectively reaching the most economically vulnerable.

C. Health Insurance Coverage

• Threefold Expansion Under PMJAY: Coverage under Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) and State schemes rose from 12.9% to 45.5% in rural and 8.9% to 31.8% in urban areas, protecting vulnerable populations from catastrophic health expenditure.

D. Public Facility Utilisation

• Rural Outpatient Utilisation: 28% → 35%: Use of public facilities for outpatient care rose from 28% (2014) to 35% (2025) in rural areas, driven by preventive, promotive, and early diagnostic care under AAMs.

E. Maternal and Child Health

• Near-Universal Institutional Deliveries: Institutional deliveries rose from 90.5% to 95.6% in rural and 96.1% to 97.8% in urban areas (2017–18 to 2025), driven by Janani Suraksha Yojana (JSY), Janani Shishu Suraksha Karyakaram (JSSK), and Pradhan Mantri Surakshit Matritva Abhiyan (PMSMA). Notably, 66.8% of rural deliveries now take place in government health facilities (urban: 47%).

Challenges in India’s Public Health Sector

1. Structural Weakness in Public Hospitals

• India spends only about 2.1% of GDP on health (2021–22) well below the WHO-recommended 5% and far behind nations like Brazil (9.6%) and Thailand (3.7%).
• India has approximately 0.55 hospital beds per 1,000 population against the WHO norm of 3 per 1,000, revealing a chronic infrastructure deficit in the public sector.
• Public hospitals are severely short-staffed: India has just 0.65 doctors per 1,000 people (WHO recommends 1 per 1,000), with acute shortages in rural and semi-urban areas.
• Private hospitals dominate tertiary and super-speciality care while public facilities remain largely confined to primary and basic secondary care, creating a dual-tier healthcare system.

2. Insurance Coverage Without Genuine Access

• PMJAY reimbursement rates are often below market rates, making many private hospitals reluctant to empanel or causing them to recover costs through separate charges on patients.
• The survey confirms: while insurance coverage has grown threefold, the hospitalisation rate has not returned to pre-2014 levels showing that the poor remain practically excluded despite being nominally covered.
• Awareness gaps about entitlements and empanelled hospitals further reduce the effective utilisation of insurance, especially among women, elderly, and marginalised communities.

3. Underfunded Preventive and Chronic Care

• The Ayushman Arogya Mandir (AAM) network formerly Health and Wellness Centres which provides free medicines and diagnostics, is significantly underfunded relative to NCD management needs.
• India’s NCD burden is rising rapidly: NCDs account for over 60% of all deaths in India (ICMR, 2023), requiring sustained medicines, diagnostics, and specialist follow-ups all expensive and largely private.
• Generic medicine availability under Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP) is patchy in rural areas, limiting affordable access to essential chronic care drugs.

4. Financial Risk Despite Nominal Protection

• The catastrophic health expenditure defined as OOPE exceeding 10% of household income still affects roughly 17% of Indian households (National Health Accounts, 2022).
• The 80th Round confirms this duality: while the median OOPE has dropped, the mean OOPE has roughly doubled, reflecting that a minority of households face very high expenditures particularly for surgeries, cancer treatment, and organ care.
• Health expenditure remains a leading cause of indebtedness and poverty in India, with an estimated 55 million people pushed into poverty annually due to healthcare costs (World Bank).

5. Urban-Rural and Gender Disparities

• Rural areas have far fewer public health facilities per capita, with only 25,743 Community Health Centres against a requirement of over 35,000 (RHS 2022–23).
• Women’s access to healthcare is constrained by mobility, social norms, and the concentration of gynaecology and maternal care facilities primarily in district hospitals.

Government Initiatives: Building the Architecture of Universal Health Coverage

• Ayushman Bharat PMJAY (2018): Provides health cover of ₹5 lakh per family per year for secondary and tertiary hospitalisation to over 12 crore poor and vulnerable families the world’s largest government-funded health insurance scheme.
• Ayushman Arogya Mandir (AAM): Converted from Sub-Health Centres and PHCs to provide comprehensive primary care including free essential medicines, diagnostics, and telehealth services; over 1.72 lakh centres operationalised by 2024.
• Pradhan Mantri Jan Arogya Yojana (PM-JAY) Expansion (2024): Extended to cover all citizens above 70 years of age irrespective of income, addressing the vulnerable elderly population.
• National Health Mission (NHM): Aims to strengthen rural health infrastructure, focusing on maternal and child health, immunisation, and disease control through a network of ASHAs, ANMs, and health workers.
• PM Ayushman Bharat Health Infrastructure Mission (PM-ABHIM): A ₹64,180 crore scheme to develop critical healthcare infrastructure at the block, district, and metropolitan levels, particularly strengthening public hospitals for pandemic preparedness and tertiary care.
• Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP): Over 10,000 Janaushadhi Kendras provide generic medicines at 50–90% less than market prices, reducing OOPE for chronic disease patients.
• eSanjeevani Telemedicine: India’s national telemedicine platform has recorded over 30 crore consultations (2024), bridging specialist access in rural and remote areas.

Global Best Practices: Lessons India Can Learn

• Thailand’s Universal Coverage Scheme (UCS): Thailand achieved near-universal health coverage by investing heavily in public hospital networks and setting regulated fees for all facilities, resulting in the private sector’s OOPE share dropping to under 12%. India can adopt regulated pricing mechanisms for PMJAY-empanelled hospitals.
• Brazil’s Sistema Único de Saúde (SUS): Brazil’s unified public health system, funded by dedicated taxes, provides free universal healthcare through strong primary care — reducing hospitalisation by preventive management. India’s shift toward strengthening primary care through AAM mirrors this model.
• Rwanda’s Community-Based Health Insurance (CBHI): Rwanda achieved over 90% insurance coverage by integrating community health workers into insurance enrolment and care delivery a model relevant to India’s ASHA network.

Way Forward: Strengthening India’s Public Health Sector

A. Expand and Upgrade Public Hospital Capacity

• India must urgently increase public sector hospital beds from 0.55 to at least 2 per 1,000 population, with a special focus on district hospitals and medical colleges to enable tertiary care competition with the private sector.
• Under PM-ABHIM, fast-tracking the development of Critical Care Blocks in every district will reduce dependence on expensive private hospitals for emergency and speciality care.

B. Reform PMJAY Reimbursement and Regulate Private Providers

• Reimbursement rates under PMJAY must be periodically revised to reflect actual treatment costs, and empanelled hospitals must be prohibited from charging separately for diagnostics and ancillary services already included in packages.
• A dedicated Health Regulatory Authority similar to the Insurance Regulatory and Development Authority (IRDAI) can monitor hospital billing, quality standards, and patient grievances.

C. Adequately Fund the AAM Network for NCD Management

• The Ayushman Arogya Mandir (AAM) network  must receive dedicated NCD care funding including point-of-care diagnostics for diabetes, hypertension, and cancer screening so that chronic disease patients are managed at the primary level, reducing costly hospitalisations.
• Universal free essential medicines for NCDs at all public health facilities, similar to Tamil Nadu’s model, can dramatically cut OOPE for the poor.

D. Strengthen Health Workforce

• India must produce more doctors, nurses, and paramedics the National Medical Commission’s push to increase MBBS seats must be matched by expanding post-graduate medical education to reduce the specialist shortage.
• Community Health Officers (CHOs) deployed at Health and Wellness Centres should be expanded and empowered to provide first-line chronic disease management.

E. Increase Public Health Expenditure

• India must progressively increase public health expenditure to 2.5% of GDP as committed in the National Health Policy 2017, and further toward the WHO-recommended 5% with dedicated funds for public hospital upgradation and telemedicine infrastructure.
• States should be incentivised through GST devolution conditionalities tied to health infrastructure outcomes, encouraging higher state-level health spending.

F. Leverage Technology and Data

• The Ayushman Bharat Digital Mission (ABDM) creating unique health IDs, digitising health records, and enabling health data exchange must be accelerated to reduce duplication of diagnostics and improve clinical decision-making.
• Real-time OOPE and disease burden data from surveys like the 80th Round must be integrated into health policy planning cycles at the state level for targeted interventions.

Conclusion

• The 80th Round of the Household Social Consumption (Health) Survey by the National Statistical Office (NSO) clearly shows that while insurance coverage has expanded, gaps in access, infrastructure, and affordability continue to persist.
• India must now focus on strengthening public hospital infrastructure for tertiary care, regulating private providers under insurance schemes, fully funding preventive and chronic care, and progressively increasing public health expenditure — so that every Indian citizen’s right to affordable, quality healthcare moves from a constitutional aspiration to a lived reality.