Covering a swathe of healthcare issues, the 176^th parliamentary panel report on “Affordability and Accessibility of Healthcare Facilities in Public and Private Sector” acknowledges that over 60% of inpatient care and 70% of outpatient care, especially in urban areas, is delivered by the private sector | Photo Credit: istock.com

Complaints of opaque tariffs and hidden costs in private hospital bills, are often heard from patient families. But a recent Parliamentary panel report has flagged similar concerns, and called for a cap on prices — bracketing them with a three-star hotel in the same region.

Unhappy with being equated to the hospitality industry, healthcare associations are pointing to their layered costs and several compliances that add to their costs.

“A hospital room is not just a room — it comes with additional services such as nursing care, round-the-clock medical supervision, emergency support, monitoring devices, infection control practices,” said, Dr Girdhar Gyani, director general of the Association of Healthcare Providers of India (AHPI) — representing over 20,000 hospitals. “Instead of a three-star hotel benchmark, a more useful approach might be to regulate the methodology through which hospitals fix their room rent in transparent manner,” he said, responding to a businessline query.

Covering a swathe of healthcare issues, the recently tabled 176^th parliamentary panel report on “Affordability and Accessibility of Healthcare Facilities in Public and Private Sector” makes about 368 recommendations including calling for a mechanism to “standardize and cap” the costs of essential treatments, diagnostics, and routine procedures across all private hospitals, among other things.

Analysing the fragmented healthcare landscape, the report acknowledges that over 60 percent of inpatient care and 70 percent of outpatient care, especially in urban areas, is delivered by the private sector made-up of varied organisations that could be owned by a single person, a trust or a corporate. “Corporate hospital chains such as Apollo Hospitals, Fortis Healthcare, Max Healthcare, Narayana Health, and Manipal Hospitals dominate the urban tertiary care market, offering advanced treatments and global standards of care,” it points out.

But pointing to “India‘s deepening healthcare affordability crisis”, the report notes, “treatment in private hospitals is often five to ten times costlier than in government facilities, with childbirth and serious illnesses like cancer, heart disease, and kidney failure reflecting the sharpest divides.

The average cost of inpatient treatment for an illness in India is about ₹37,858, while out-of-pocket expenditure is about ₹34,064. The average cost of hospitalisation is ₹6,631 in government hospitals compared to ₹50,508 in private hospitals. The gap widens further for serious illnesses such as cancer, heart disease and kidney failure.” Infact, healthcare costs were not uniform across India, it noted, with treatment costs being higher in the south and some more developed states.

The parliamentary standing committee, that brought out this report, adds that “rampant commercialisation of private healthcare, characterised by grievances of excessive billing, unnecessary diagnostics, and soaring costs for routine procedures ... is directly pushing vulnerable households into catastrophic debt and distress causing asset sales.”  

The report urges government to mandate “absolute price transparency prior to admission”, with fast-track grievance redressal mechanisms to audit excessive billing and resolve insurance claim disputes in the private sector.

Pointing to the high tariffs for hospital stays in metros, the committee says it analysed the break-up of the hospital billing structure and believed that “rationalising of room charges needs to be done on an emergent basis.” It recommended that “room charges for a hospital should not exceed the average room tariffs prevailing in three star hotels in the peripheral area or vicinity of the hospital.”

Calling for a mandatory benchmark, the report said, “the resident doctor cost, nursing cost, disposable costs of consumables, meal charges, laundry charges can be added to the basic room tariff so that the entire cost is rationalized.”

AHPI’s Gyani says, “Price control on room already exists under insurance, CGHS, PMJAY so let us leave for those who come under cash paying and those under medical tourism, the choice which they can afford. If we unnecessarily cap, it will discourage investment.”.

Siddhartha Bhattacharya, Secretary General with Nathealth points to the 25,000-odd healthcare compliances and critical features like infection control, that add to hospital costs. Industry has been seeking input tax credit on GST or zero-rating, lower duties on healthcare equipment, and infrastructure-sector lending at concessional rates to improve healthcare financing, he says, which in turn would impact cost. He called for a comprehensive costing exercise across different categories of hospitals, geographies, and care settings, when standardised treatment packages and room-rent benchmarks are evaluated.  

“Pricing and costing are not the same, particularly when subsidies and differing operational efficiencies influence the risk-reward equation of various care delivery models. It is worth noting that healthcare requires over $300 billion in immediate investment capital, while the sector grapples with twin pressures: ensuring affordability and sustainable pricing on the revenue side, while also attracting capital despite having one of the lowest returns on investment among the top 20 sectors of the economy. Whether public or private, healthcare delivery, unlike the hospitality sector, involves significant costs related to infection control, specialised infrastructure, regulatory compliance, medical technology, and round-the-clock clinical support,” he added.

Published on August 13, 2026