Difference Between Public and Private Healthcare in India

Onsurity Editorial
August 20, 2025
9 min read

Table of Contents

The Indian healthcare ecosystem is a complex blend of private and public health centers. While public healthcare is supposed to be the primary provider of medical services, many people still rely on private healthcare for treatment and medical care. However, this results in a significant health gap and high out-of-pocket expenses, limiting access to quality care, particularly in rural areas.

While the urban-rural divide is significant and the system is not without its challenges, there are still some exceptions where India’s healthcare sector shines. Despite the highest medical inflation in Asia, healthcare in India continues to attract medical tourism. Health insurance penetration is slowly but surely growing through various government and private channels.

The digital healthcare ecosystem is reducing the health burden (at least for outpatient facilities) on healthcare centers and improving the way these services are accessed. It is also unifying patient data and providing a digital interface/tech for teleconsultations or health monitoring.

However, at the heart of this system lies a critical choice: public or private healthcare. And it is not just about picking one to access medical care; it is a critical decision that impacts how quickly you get the care, how much it costs you, and how effective the treatment is. With the rising healthcare costs, this is the most important decision one can make. Therefore, it is important to understand the nuance between public and private healthcare.

It is often said that good healthcare in India is often a matter of geography, income, and information. Let’s find out if it’s truly the case, or are there any myth-breaking exceptions.

In this blog, we’ll break down the key differences, help you understand your options, and empower you with the knowledge to make an informed decision for yourself and your loved ones.

Also read: Private and Public Hospitalisation Costs in India

Decoding India’s Healthcare System

Healthcare in India is delivered via a large, government-funded public sector and a rapidly expanding private sector. Both impact the access, quality, and affordability of medical services for 1.4 billion people.

1. Public Healthcare

The public health sector is funded and managed by the government (both central and state). It includes services like community health centers, primary health centers, and government hospitals. The public sector is designed to provide universal healthcare at little to no cost.

These government-led healthcare facilities have a broader reach (specially in rural areas), occasionally cost-exempt services, and oftentimes low-cost medical care.
However, these centers are often built on poor infrastructure. Additionally, they are underfunded, understaffed, and overcrowded, which negatively impacts their quality.

2. Private Healthcare

On the other hand, the private sector, which offers a wide range of services, is run by individuals, trusts, or corporations. More than 60% people in India prefer private healthcare over public healthcare, even at the cost of high out-of-pocket expenses.

These centers offer better infrastructure, shorter wait time, perceived higher quality of care, and better access for specialised care.

Despite being a popular choice, private healthcare in India has frequently been criticised for providing expensive care with profit-driven aspirations in the backend and being unregulated in smaller facilities.

Quick read: Medical Inflation in India

The Good: Progress and Initiatives

In the past two decades and specially since the pandemic, Indian healthcare has made significant improvements in the healthcare delivery systems. Owing to various government and private initiatives like vaccination drives, maternal health programs, and nutritional schemes like Janani Suraksha Yojana and POSHAN Abhiyaan, India’s life expectancy has remarkably improved (it increased from 63 years to 70 years in 2023), the infant mortality ratio (IMR) has significantly dropped to 27 per 1000 live births in 2021, a notable improvement from 39 per 1000 live births in 2014.

Universal health coverage programs, such as Ayushman Bharat – PMJAY, have made quality healthcare more accessible to low-income families. Furthermore, these initiatives have also been instrumental in the eradication of various diseases, including polio and Tetanus.

The Challenges: What Needs Improving?

No sector or industry is without its challenges, and the same is with healthcare in India. Among BRICS and G20 nations, India spends the least on public health. This low contribution results in overcrowded public hospitals and overpriced private healthcare.

In addition to this, India has a serious shortage of healthcare workers (only 1 doctor per 1,500 people, against the WHO norm of 1:1,000). In addition to this, there are several other low-hanging fruits like fragmented/unregulated private centers, poor infrastructure, increasing burden of lifestyle diseases, and low health insurance penetration.

What to Expect from India’s Healthcare System Today?

Given the progress and challenges, it is obvious that there are certain things that we can and cannot expect from India’s healthcare ecosystem. If you are concerned about what to expect, then here are some of the things that you can expect from the public and private sectors, respectively.

Expectations from Public Healthcare

Affordability: Most services are free or can be availed at little to no cost.
Wide Reach: Extensive network of healthcare centers, specially in rural areas.
Preventive Focus: Strong emphasis on immunisation, maternal care, and disease control programs.
Key Challenges: Overcrowding, limited resources, and variable quality.

Expectations from Private Healthcare

Quality and Comfort: Modern infrastructure, specialised care, shorter wait times, and personalized care.
Specialist Access: Better access to specialists/expert doctors and advanced treatments.
Cost: High out-of-pocket medical expenses and expensive private insurance premiums.
Limitations: Can be prohibitively expensive for many, specially without insurance. Also, smaller facilities are unregulated and warrant malpractices.

Relevant read: Pre and Post Hospitalisation Expenses

6 Key Differences Between Public and Private Healthcare In India

Let’s break down the core differences to help you make the right choice:

1. Accessibility

Accessibility for both public and private healthcare is generally examined on the geographical reach, access to specialised care, cost barriers, transportation/proximity, wait time, and availability of emergency care to patients.

Public healthcare has little to no cost barriers and better geographical access, but these centers are often overcrowded, warranting a longer wait time and narrow access to emergency care.

Private centers are highly equipped and offer specialised/advanced treatment, but they often come at a significant financial burden without any insurance or medical coverage. These centers are rarely present in rural/remote areas, and transportation can be challenging specially during a medical emergency.

2. Cost of Treatment

Cost is a critical barrier in getting quality healthcare in India, and on this front, both public and private sectors are at opposing ends of a pole.

Public hospitals and health centers are designed to reduce the burden on out-of-pocket expenses, making them the preferred choice for economically vulnerable groups. Most treatments, consultations, and medicines are free or heavily subsidised.

On the contrary, private hospitals charge a significantly higher amount for consultations, procedures, room rent, and medicines. Costs can be 20X higher than public hospitals. For example, an ICU in a public hospital can cost around Rs. 1,500 versus Rs. 30,000 for a private one; open-heart surgery costs roughly Rs. 95,000 in public vs. Rs. 2.8 lakh in private. Without medical coverage, treatment at a private hospital can push families into debt.

3. Quality of Care

Getting quality care is a grey area, as both public and private healthcare have some notable exceptions.

However, a larger share of private hospitals are recognised for delivering excellent patient care and robust healthcare infrastructure that comes with better individualised care and comfort. Service quality, in terms of tangibility, empathy, reliability, and responsiveness, is rated higher in private hospitals.

Many public hospitals are also known for providing excellent care, but they are often overcrowded and face workforce shortages that severely affect patient experience and health outcomes.

4. Waiting Time

Public healthcare institutions experience longer wait times due to excessive patient loads and limited resources. The treatment cycle is also prolonged due to individual waiting times for consultation, diagnosis, and procedure, respectively.

Due to efficient staffing and a low patient-to-doctor ratio, private hospitals offer quicker appointments, diagnostics, and treatment.

Average waiting time in private hospitals for OPD is around 15.5 minutes versus 20.3 minutes in public hospitals, with longer delays in emergency care.

5. Staffing & Expertise

Both public and private healthcare have highly qualified professionals. However, the doctors in public hospitals are often overburdened with high patient volumes and therefore are unable to provide individualised attention to patients. Due to this, the availability of specialists is also inconsistent in public hospitals.

Private hospitals attract top talent due to better support staff, competitive salaries, and better working conditions. Owing to this, access to specialists and super-specialists is easier and faster at private hospitals.

6. Insurance Ease

Much like healthcare, insurance is also delivered in two ways, i.e., via public sector companies and private insurers. The private insurance providers have better access and reach in private healthcare centers. They offer faster insurance claims in a user-friendly way. Most private insurers have a strong network of private hospitals where patients can attain cashless treatment.

Traditionally, public hospitals do not accept insurance, but with the introduction of government-led insurance schemes, this is changing. With schemes like Ayushman Bharat – PMJAY, patients can get cashless treatment at empanelled public and private facilities.

The claim process for such schemes can be more bureaucratic and time-consuming compared to private care.

A Comparative View: Public Vs. Private Healthcare In India

Feature	Public Healthcare	Private Healthcare
Accessibility	Extensive, especially rural	Urban-centric, limited rural reach
Cost	Free or subsidized	Expensive, out-of-pocket
Quality	Varies, often basic	Generally higher, modern
Waiting Time	Long	Short
Expertise	Qualified but overstretched	Abundant, specialist-driven
Insurance	Limited, improving	Widely accepted

Public Vs. Private Hospitals: When To Choose What?

When to Choose a Private Hospital?

Emergency Situations: When time is critical and immediate intervention is needed.
Specialised Treatments: For complex surgeries or advanced diagnostics not available in public hospitals.
Comfort & Privacy: If you prefer private rooms, personalized care, and better amenities.
Insurance Coverage: If you have comprehensive health insurance that covers private care.

When to Choose a Public Hospital?

Affordable Care: When cost is a major concern.
Basic and Preventive Services: For immunizations, maternal and child health, and routine check-ups.
Chronic Disease Management: For long-term treatment of conditions like diabetes, tuberculosis, or hypertension.
Government Schemes: When eligible for benefits under government health programs.

Government Schemes That Are Bridging the Gap

The Indian government has introduced several initiatives to make quality healthcare accessible to all, specially the vulnerable income groups. Here are some schemes that are making healthcare more accessible:

1. Pradhan Mantri Jan Arogya Yojana (PMJAY) / Ayushman Bharat

It is the world’s largest government-funded health insurance scheme and it was introduced with the aim of offering universal healthcare to Indians.
Offers medical coverage up to Rs. 5 lakh per family per year for secondary and tertiary care at empanelled public and private hospitals.

2. National Health Mission (NHM)

It is a flagship initiative of the Indian Government, launched in 2013, to offer universal access to equitable, affordable, and quality healthcare services for all citizens.
Strengthens public health infrastructure, in both rural and urban areas, specially for financially vulnerable groups.
The scheme places a strong focus on maternal and child health, communicable diseases, and strengthening the public health system.

3. Employees’ State Insurance (ESI)

It is a comprehensive social security and health insurance program launched under the Employee State Insurance Act, 1948. And it is managed by the Employees’ State Insurance Corporation (ESIC), an autonomous body under the Ministry of Labour and Employment.
The scheme provides financial protection, medical care, and a range of benefits to minimum wage employees (salary up to Rs. 25,000) and their dependents in case of sickness, maternity, disability, or death due to employment injury.
Covers both public and select private hospitals for insured employees.

These government-led schemes are the essential bridge between public and private healthcare, making quality treatment more accessible and affordable for millions.

Conclusion

India’s dual healthcare system is a reflection of its diversity and complexity. Public healthcare is the backbone, ensuring that basic and preventive services reach the masses, especially the most vulnerable. Private healthcare offers advanced treatments and comfort, but often at a steep cost.

The rise of health insurance and government schemes is helping to make private care more accessible, while ongoing reforms are strengthening public health infrastructure. As a consumer, understanding these differences empowers you to make the best choices for your health and finances.

Onsurity is committed to making quality healthcare accessible and affordable for all, with innovative health plans that bridge the gap between public and private care.

FAQs:

1. Is treatment at public hospitals always free?

Most medical services and medicine available at government hospitals are free or heavily subsidised, specially for those below the poverty line.

2. Why is private healthcare so expensive?

Various factors contribute to the healthcare costs at private hospitals, some of them are increasing medical inflation, better medical infrastructure, specialist staff, and state-of-the-art medical tech. Additionally, private hospitals operate on a for-profit model, unlike government hospitals that offer subsidised care.

3. Can I use my health insurance at a government hospital?

Many government hospitals now accept health insurance. However, the coverage and extent of policy benefits that are available at these hospitals mainly depend on your insurance provider.

4. Are there any public-private partnerships in healthcare?

Yes, many government schemes empanel private hospitals to provide care to beneficiaries. Additionally, collaborations in diagnostics, telemedicine, and infrastructure are also growing. Choosing between public and private healthcare in India is about balancing cost, convenience, and quality.

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