India's health system: public, private and in between

India's health system is a mix. The public system is organised in three tiers: sub-centres and primary health centres for villages and small towns, community health centres for blocks, and district hospitals and medical colleges for referrals. The National Health Mission, formed by merging the National Rural Health Mission (launched 2005) and the National Urban Health Mission under one umbrella in 2013, funds much of this network and supports a large cadre of ASHA community health workers who link villages to clinics. Health is primarily a state subject, so the quality of this network varies greatly between states.

The private sector, however, provides most outpatient care and a large share of hospital care, ranging from corporate hospitals in metros to single-doctor clinics and informal practitioners in villages. Households pay a high share of health costs out of pocket, which means a serious illness can push a family into debt — the problem economists call catastrophic health expenditure. Public spending on health has historically been low compared with other large economies, and shortages of doctors, nurses, drugs and equipment in public facilities push even poor patients toward private care.

The system also faces a double burden of disease. Infectious diseases, maternal and child conditions and undernutrition remain major problems, especially in poorer states, while non-communicable diseases — heart disease, diabetes, cancers and chronic lung disease — now cause a growing share of deaths as lifestyles, diets and life expectancy change. A health system built for infections and childbirth must now also manage lifelong conditions that need regular medicines, screening and follow-up.

Reform debates therefore focus on three questions: how much public money should go to health and to what — primary care, hospitals, or insurance; how to regulate private providers on price and quality; and how to staff rural facilities. The Ayushman Bharat programme, covered in the next note, is the largest recent attempt to answer the financing question, but the underlying structure — a thin public system alongside a large, unevenly regulated private sector — remains the defining feature of Indian health care.