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23th December 2023 (8 Topics)

Healthcare Sector in India


The Indian government is considering the establishment of a comprehensive health sector regulator, merging private and government insurance schemes, to enhance accessibility and affordability of healthcare.

Key Demand: Doctors' associations have advocated for a unified regulatory body to oversee both private and public insurance, aiming to provide better tertiary care access to citizens.


  • Current discussions between the Ministries of Finance and Health reveal a potential initiative to create a health sector regulator in India.
  • This regulatory body would bring under its purview both private and government health insurance schemes, addressing the call for a unified approach by doctors' bodies.
  • The move is in response to the increasing penetration of private insurance and the need for restructuring government insurance schemes.


  • A crucial aspect driving the consideration for a health sector regulator is the goal outlined in the IRDAI Vision 2047, aiming to achieve 'Insurance for All' by 2047.
  • The intent is to ensure that every citizen has appropriate life, health, and property insurance coverage.
  • The current challenges include lower penetration, inadequate coverage, and escalating healthcare costs, leaving over 400 million individuals without health insurance.

Present System:

  • The present system faces challenges related to standardization of treatment costs, settlement of health claims, and disparities in policy terms and claim restrictions across insurers.
  • A report by the National Insurance Agency emphasizes the need for concentrated efforts to drive health insurance penetration and affordability.
  • The National Health Authority (NHA) has already taken steps, such as the development of the National Health Claims Exchange (HCX), to address interoperability of health claims.

Proposed System:

  • The proposed health sector regulator would not only oversee private and government insurance but also play a crucial role in standardizing treatment costs and settling health claims.
  • It may collaborate with stakeholders, including insurance companies, to develop a detailed plan for enhancing health insurance coverage.
  • The regulator could function as an industry watchdog, broadening the scope of the National Health Claims Exchange.


  • The establishment of a health sector regulator holds the potential to standardize and lower costs in the health insurance segment.
  • It aligns with the National Health Policy, 2017, emphasizing the need for a regulatory mechanism to address market failures resulting from information asymmetry.
  • The regulator could contribute to achieving the goal of 'Insurance for All by 2047' by ensuring appropriate coverage for every citizen.


  • Challenges in implementing a healthcare regulator include the complex nature of the healthcare sector, varying institutions, and the need for a district-level presence to address diverse issues.
  • The Clinical Establishments Act (2010) requires further attention, and a multi-stakeholder approach is suggested to address patient issues.
  • Balancing regulation for both public and private healthcare institutions, considering factors like pricing and infrastructure, presents a significant challenge.

Possible Suggestions:

  • Experts propose an accountable social regulation approach, considering differential realities in different regions.
  • Multi-stakeholder bodies, without an inspection-centric approach, may address patient issues effectively.
  • The regulatory system should involve an accredited quality system, universally applied and audited, covering aspects like infrastructure, pricing, and electronic health records.

The establishment of a health sector regulator in India is a critical step toward achieving comprehensive and inclusive health insurance coverage. The proposed regulator, guided by the principles of the National Health Policy, 2017, can address existing challenges, ensure accountability, and contribute to the realization of the 'Insurance for All by 2047' visio

Analysis and Reasons

Patient Experiences and Calls for Regulation: Cases

  • Recent public hearings, such as the 'Jan Sunwai' in Pune, shed light on challenges faced by patients in private hospitals during the pandemic.
  • Despite government rate caps, instances of overcharging persist, forcing families into high-interest borrowing.
  • The need for a healthcare regulator, advocating for accountable social regulation that adapts to diverse realities across regions.

Economic Survey's Endorsement and Complexity of Implementation:

  • The Economic Survey supports the idea of a sectoral regulator to address market failures due to information asymmetry in healthcare.
  • However, veterans in healthcare highlight the complexity of implementing such regulation.
  • Unlike sectors with few players, healthcare encompasses institutions of varying sizes and structures.
  • , emphasizing the intricacies of healthcare issues from overcharging A multi-stakeholder approach to medical negligence.

Even-Handed Approach and Differentiating Responsibilities:

  • The importance of an even-handed regulator that differentiates between public and private healthcare entities, considering their diversity.
  • The need to separate pricing and regulatory issues, drawing parallels with the pharmaceutical sector's distinct bodies handling pricing and regulatory matters.
  • The clarity required on the regulator's objectives and suggests a quality system universally applied and audited.

Quality, Infrastructure, and Pricing Considerations:

  • The rationale behind a regulator to standardize healthcare matters.
  • T he regulator's role in assessing quality, infrastructure, and pricing.
  • The challenges of implementing electronic records universally but sees them as a necessary component for an effective regulatory system.

Current Position and Scope of Digital Healthcare Services in India:

National Digital Health Mission (NDHM): Launched under the National Health Policy, 2017, NDHM aims to create a comprehensive digital health ecosystem. It includes initiatives like the creation of digital health IDs, electronic health records, and the National Health Portal. The ABDM, a relaunch of NDHM, intends to digitize the entire health ecosystem, though participation is voluntary.

Telemedicine and Teleconsultation: The Telemedicine Practice Guidelines under the NMC Act, 2019, regulate telemedicine in India. These guidelines outline prescription protocols and the responsibilities of registered medical practitioners during online consultations. The Information Technology Act, 2000, governs data collection by teleconsultation intermediaries.

E-Pharmacies: Despite the absence of specific regulations, e-pharmacies are governed by the IT Act. Recent developments involve a draft amendment to the Drugs and Cosmetics Amendment Rules, 2018, which proposes mandatory registration with the Central Licensing Authority for e-pharmacies.

Government Initiatives: The Indian government has launched various initiatives such as digital health IDs, electronic health records, the National Health Portal, e-hospital, 'Mera Aspataal' for patient feedback, and vaccine tracker mobile apps under the ABDM to enhance healthcare services.

Regulation of Medical Devices: Under the Drugs and Cosmetics (D&C) Act and its rules, all medical devices, including software or accessories designed for diagnosis, prevention, monitoring, or treatment, are classified as 'drugs.' Compliance with the D&C Act is required for their development and distribution.

Data Privacy, Confidentiality, and Funding:

Data Protection: The Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules, 2011, govern data protection. These rules apply to healthcare businesses, emphasizing obtaining patient consent and implementing security practices.

Cybersecurity Directives: Healthcare service providers in India must comply with cybersecurity directives from the Indian Computer Emergency Response Team (CERT-In). This includes mandatory reporting of specific cybersecurity incidents within six hours.

Funding and Investments: The introduction of ABDM has spurred investments in the digital healthcare sector. Notable investments include HealthKart raising funds in Series H rounds and Tata 1mg becoming a unicorn with substantial funding.

Impact of the COVID-19 Pandemic:

Vaccine Campaign and Legal Changes: The Indian government accelerated the vaccine approval process, capped vaccine prices, and provided fiscal support. Legal changes included caps on drug prices, amendments to the Epidemic Disease Act, and regulations for countering COVID-19.

Digital Technology Response: The pandemic accelerated the adoption of digital technology in healthcare, leading to increased use of telemedicine and e-pharmacy services.

Financial Aid: The government provided financial aid through initiatives like the Pradhan Mantri Garib Kalyan Yojana and the Loan Guarantee Scheme for Covid Affected Sectors.

Future Outlook and New Opportunities:

Telemedicine and AI Adoption: Telemedicine, AI, and 3D printing have become significant contributors to India's healthcare sector. The future promises increased accessibility, improved healthcare delivery, specialist consultations, chronic disease management, home healthcare, and regulatory support.

Public–Private Partnerships (PPP): The healthcare sector in India is witnessing a growth in PPP models, focusing on infrastructure, service delivery, and accessibility. Schemes like Pradhan Mantri Swasthya Suraksha Yojana utilize PPP for establishing and upgrading medical institutions.

Natural Health and Herbal Medicine Products: The market for natural health and herbal medicine products is expanding, with regulations in place for manufacturing and sale. Established companies like Dabur India Ltd, Baidyanath Group, Himalaya Drug Company, and Zandu Pharmaceuticals play a significant role.

Medical Tourism: The Indian government actively promotes medical tourism, collaborating with healthcare providers to ensure patient safety and quality care. Initiatives like the Medical Value Travel Facilitation Portal and e-Medical visa facilitate international patients.

India's healthcare sector is evolving with a focus on digitalization, public-private partnerships, and natural health products. Despite challenges, the integration of technology, regulatory reforms, and collaborative efforts position India's healthcare ecosystem for positive transformation, aiming for universal health coverage and improved health outcomes for its citizens

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