5 Factors That Control The Development Of India’s Healthcare System

Despite all the technological advancements in the healthcare industry worldwide, India’s healthcare sector faces so many challenges. The people living in the cities have access to the good health care while the population dwelling in the villages doesn’t have this facility. If the healthcare system interests you too, this article will help you to understand the healthcare scenario in India.

In an ideal world, the government should provide health care to all the citizens. The population of India is so dense and the government has not been able to do much about it. Citizens have to take command of their healthcare in their own hands. Undoubtedly, buying a health insurance plan helps to secure your well-being as well as your finances. Before you buy a health insurance plan, always compare health insurance plans to be able to choose the best out of the rest.

The below mentioned are the 5 things to know in relation to the healthcare system of India.

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1. Rural vs. Urban Divide

The prospect to enter the insurance market is very good. Still, India spends only 4.2 percent (as in March 2016) of its national GDP for healthcare goods and related services. The U.S. spends 18 percent of its national GDP.

When it comes to healthcare, there is a wide gap between urban and rural populations. 70 percent of the Indian population resides in rural areas and has very limited access to the hospitals. The rural population is totally dependent on alternative medicines and government health care programmers, such as the National Urban Health Mission. The Government has partnered with various local private players to pay for the healthcare premiums for the rural individuals. This program hasn’t done any significant improvement till date. In comparison to that, urban areas boast of so many private clinics and hospitals that offer world-class healthcare services. These hospitals and clinics provide better services, doctors, access to medicines.

All these are a result of better profitability for the investors, as the investments made in the urban areas give better results as compared to the meager profits earned in the rural areas.

2. Absence Of Effective Payment Options

It is the key factor that drives India’s healthcare scenario. In our country, the out-of-pocket expenditure is very high. 70 percent of patients pay for doctors’ appointment and hospitals visit in cash. Only 5 percent of the Indians have a health insurance cover. Times are changing and the health insurance penetration has been increasing and becoming one of the fast-growing domains in India.

3. Need For Basic Primary Healthcare And Infrastructure

It is high time that India’s basic healthcare problems must be solved, especially in the areas of malaria, HIV, diarrhea, and tuberculosis. It is so sad that the majority of children under the age of 5 are underweight since birth and 7 percent of them die before they celebrate their fifth birthday. Only a limited percentage of people have access to proper sanitation that aggravates some of the key concerns mentioned above.

When it comes to primary health care, our government spends just 30 percent of the nation’s total healthcare budget. It is a mere fraction of what the UK and the US spend annually. By addressing the infrastructure issue, this problem can be solved to a certain extent. By standardizing the diagnostic procedures, developing health IT systems, building more rural clinics, and improving efficiency, we can address this issue.

There is a constant need for qualified medical graduates, especially in rural areas that fail to attract fresh graduates because of financial constraints. A high percentage of the fresh graduates pursues higher education from abroad and then settles there for their employment.

4. Growth In The Pharmaceutical Domain

As per the Indian Brand Equity Foundation, India is the top third exporter of pharmaceutical products in terms of the volume. Approx. 80 percent of the healthcare domain comprises generic low-priced drugs that seem to be a major driving force of the healthcare industry.

The rising aging population, income of the middle class, and the development of the basic primary care facilities would change the future of the pharmaceutical industry. Our government has taken a few liberal steps by allowing FDI in this sector that is a driving force responsible for the robust growth of the Indian pharmaceutical industry.

5. Underdeveloped Medical Devices Domain

The medical devices domain is the smallest part of India’s healthcare industry. At the same time, it is one of the top fast-growing domains in the nation just like the medical insurance industry. At present, this sector has faced various regulatory challenges that have affected its overall growth and development.


Lately, the government has made some positive changes for the clearing the regulatory hurdles regarding the import & export of the medical devices. It also has a set up related to the clinical trials. As per the Economic Times, the domain of the medical devices is considered as the most promising sector for future development by the regional and foreign investors. These devices are profitable and are always in demand in some countries.

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