Parliamentary Panel Proposes Cross-Subsidy to Fund Poor Patients' Treatment
The Parliamentary Standing Committee on Health and Family Welfare has recommended that corporate hospitals use revenue earned from medical tourism and affluent patients to subsidise treatment for economically weaker sections. The proposal aims to make advanced tertiary care more affordable amid rising healthcare costs and low insurance penetration in India.
The committee, chaired by Samajwadi Party MP Ram Gopal Yadav, submitted its report on the affordability and accessibility of healthcare. It noted that India's corporate hospital sector has grown significantly due to high-value procedures, increasing medical tourism, and higher revenue per occupied bed. While acknowledging India's emergence as a global healthcare destination, the panel stressed that the benefits of this growth must reach patients who cannot afford expensive treatment.
A key recommendation is the adoption of a cross-subsidisation model, where revenue from high-paying patients and foreign medical tourists is earmarked to fund the treatment of poorer Indians. The panel argued that hospitals benefiting from government concessions—such as subsidised land, tax incentives, and 100% foreign direct investment—should give back to society by supporting advanced care for the underprivileged.
The committee also proposed that corporate hospitals reserve a defined quota of beds under government-funded health insurance schemes, such as Ayushman Bharat- PMJAY, at standard package rates. This would ensure that beneficiaries have access to advanced treatment at leading private hospitals, which are often beyond their financial reach.
To address the uneven distribution of healthcare infrastructure, the panel recommended linking government incentives to investments in tier-2, tier-3, and rural areas. It suggested expanding public-private partnerships and extending financial and technological support to smaller hospitals in underserved regions. This approach aims to reduce regional disparities in healthcare access.
Other measures proposed include capping private hospital room rents in major metropolitan cities at the average tariff of nearby three-star hotels, standardising treatment package rates, improving price transparency, and expanding government health spending. These steps are intended to reduce out-of-pocket expenditure, which currently pushes many families into financial distress.
The committee noted that private health insurance penetration remains low in India, leaving a large portion of the population vulnerable to high medical costs. A structured cross-subsidy mechanism, it said, could improve access to life-saving tertiary care for the poor without overburdening the public healthcare system.
The recommendations are part of a broader roadmap to make healthcare more affordable and accessible. However, they are advisory in nature, and the government will decide on their implementation. The committee's report highlights the ongoing debate about the role of the private sector in India's healthcare system and the need to balance profitability with social responsibility.
