How India manages to handle such a huge population and with such a little spending is quite interesting, the fact is when you have a very limited resources you use those resources to the maximum.

At the time when health care cost in U.K. and United States are threatening to bankrupt the government, U.S. and U.K. hospital administration should learn a thing or two from India, when it comes to providing health care at low cost.

According to some estimates Uttar Pradesh, which houses close to 204 million people, spent less than 600 INR or less than $9 per capita on health care during the last financial year, this is ridiculously low when compared to the United States which spent $8000 per capita on healthcare

Though the healthcare system in India is neither the most efficient nor the best in the world, it is somehow managing the pressure of rising health care cost and serving 1.25 billion people. At first, low-cost health care may not seem surprising, after all, wages in India is quite low compared to developed countries, but even when you adjust for  wages the health care cost is still significantly lower, according to a study published in Harvard business review, If Indian hospitals paid their doctors and staff U.S. level salaries, their cost of open heart surgery would still be one-fifth of that in U.S.

How India manages to handle such a huge population and with such a little spending is quite interesting, the fact is when you have a very limited resources you use those resources to the maximum,  this may not seem logical to few but when you have to look after 1.25 billion people with little access to health insurance  you have to innovate. And when it comes to innovation in health care delivery, India has surpassed the top institutions in the world.

The key to this fact is that Indian doctors and hospitals have to operate on a shoestring budget,  consider this according to the economic survey 2016-17 public spending of health is just over 1% of GDP, which is well below the world average of 5.99 % (according to world bank 2014).

On the background of such facts hospitals in India have to operate creatively to serve a vast number of poor population. According to Federation of Indian Chambers of Commerce and Industry (FICCI) when nearly 62% of the total health care spending in India is from out of pocket expense, Indian health care system must deliver value. Consequently, affordable and value-based health care is a reality in India.

Major practices that enable hospitals to reduce cost, while still maintaining quality of care:

In order to serve a large number of people India health care system have come up with a system of hub and spoke, while such system has been existent in developed countries like US and U.K., it has reached a remarkable level of efficiency in India. Indian hospitals have created a hub of main or tertiary hospitals in major metro cities like Delhi, Mumbai, Chennai etc. and small or primary health care centres (PHC) in rural areas or villages. These PHC refers patients to such big hospitals depending upon the need of care a patient require. For example, under Rashtriya Bal Swasth Karakyram (RBSK), PHCs or CHCs are setup in rural areas, doctors from these PHCs and CHCs, conduct regular check-ups in government schools and refer patients to secondary medical centre at the district level.

District level hospitals are relatively better  equipped to handle cases, but when the nature of ailment is serious they refer the patients to larger tertiary hospitals in metros. Thus forming a feeder system for larger hospitals in metros. This tightly coordinated web reduces the cost, by concentrating the expensive equipment and team of experts at the hub.

Specialists at the hub perform a high volume of focused procedures. Hospitals in U.S. follow a similar approach but they are far spread and uncoordinated, they have duplicated care at many places, but often have low volume thus increasing the cost of procedures. According to Harvard business review, an MRI machine is used for 5 to 6 times in a day in U.S. at a cost of $1080 per MRI whereas in Indian hospitals it is used up to 20 times at merely 1500 INR or $23 per MRI at AIIMS New Delhi.

According to FICCI India is dealing with huge shortage of doctors and have a 1:1700 doctor to patient ratio compared to 1:1000 recommended by WHO. So another innovative approach have to be devised in Indian hospitals and that is task shifting. Indian hospitals transfer responsibility for routine task to low-skilled workers leaving doctors to handle complicated procedures. By focusing only on technical part Indian doctors have become incredibly productive, according to some data an Indian doctor in PHCs get more than 100 patients per day. In another story according to Limca book of records “Dr. Ganesh Raj Shivnani, Senior Consultant and Chairman, Department of Cardiac Surgery, Sir Ganga Ram Hospital, New Delhi, has completed 446 consecutive coronary bypass surgeries without any death during hospitalisation from Feb 18, 2013 to Feb 15, 2015.” ( and to take it further “Sankara Eye Foundation organised a massive vision screening program for 14,918 school-going children across India through its different units on Nov 13, 2014 on account of Children’s Day” ( Such records are proof of the sheer hard work and efficiency at which Indian doctors operate.

This innovation has reduced the cost, and not to mention has created millions of jobs for low-skilled workers in the health care sector. By contract in United States, the first cost cutting move it to lay of supporting staff and transfer their duties to doctors clearly under utilising their expertise.

Finally, Indian hospitals are wisely using resources by sterlising and reusing many surgical products that are routinely discarded in U.S. and U.K. on top of that local manufacturing and cheap imports of surgical instruments from nearly south Asian countries have helped in reducing the cost of procedures.

Indian hospitals have also been innovative in compensating doctors, instead of creating an incentive based pay model, many hospitals employ doctors on a fixed salaries regardless of how many patients visit the hospital.

Innovation in India has not flourished in the field of new drug development or state of art medical procedures but in terms of service delivery Indian model has performed considerably well looking at the budget allocation, and level of education and awareness of Indian masses. While U.S. and U.K. are going through the crisis in health care due to repeal and replace of Affordable care act and NHS service breakdown, Indian health care has unique innovation to reduce the cost of health care services.


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