Hospital treatment has become more privatized and more expensive in India between 2017-18 and 2025, even as more Indians are covered by government-sponsored health insurance programs, government data released on Monday showed.
The average non-partum hospitalization in India requires an out-of-pocket (OOP) outlay of $34,604 in 2025. This number, about 1.64 times the average monthly expenditure of an Indian household in 2023-24, underscores the potential economic shock a household could face from emergency health spending.
These figures are from the report Household Social Consumption: Health, released by the National Statistics Office (NSO) on Monday, which is based on a survey of 139,732 households in calendar year 2025.
There are three main takeaways in the data. The proportion of people seeking treatment in private hospitals has increased in India. The cost of private health care has increased much faster than the cost of public health care; The growth in OOP spending on hospitalization exceeds both the aggregate and health inflation components of the Consumer Price Index (CPI).
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The average OOP spending was on medical costs – including costs for doctor’s fees, diagnostic tests, bed charges, devices, blood, oxygen, etc., but not transportation and food – for treatment $34,604 for admission to hospital (excluding maternity), $14.755 for childbirth and $861 for non-hospitalization cases
These headline figures mask a wide disparity between the costs of using public and private health care in the country. The ratio of private hospitals to public health facilities of OOP spending on hospitalization (excluding maternity) was 7.6 in 2025 compared to 6.8 in 2017-18 (according to the same survey conducted in July 2017-June 2018). Likewise, for outpatient treatment, the ratio of private hospitals and private doctor/clinic with public health facilities was 5 and 3.3 in 2025, respectively, compared to 3.4 and 1.9 in 2017-18.
Treatment in private hospitals is growing with the overall share declining in rural and urban India
Treatment in private hospitals has not only become more expensive, but also more widespread. The share of hospitalizations (excluding childbirth) in public health facilities decreased from 45.7% in 2017-2018 to 39.2% in 2025 in rural areas; And from 35.3% to 32.2% in urban areas.
To be sure, out-of-hospital treatment in public facilities saw a marginal rise from 33% to 35% in rural areas, but declined from 26% to 25% in urban areas during this period.
The result of the high and widespread cost of treatment in private hospitals was that spending outside hospitals exceeded not only total inflation but also health inflation in the country between 2017 and 2018. Out-of-hospital spending on hospitalizations excluding labor, delivery, and out-of-hospital treatments increased 1.88, 2-fold, and 1.42-fold between 2017 and 2018 and 2025. Health spending as seen in the 2011 CPI series also increased by 1.52 times while the overall CPI increased by 1.43 times during this period.
The disproportionate rise in spending on overseas operations – where insurance reimbursements are deducted to arrive at this figure – has occurred despite significant growth in the number of people covered by health insurance or schemes. The proportion of people covered by health insurance/financing plans increased from 14.1% in 2017-2018 to 47.4% in rural areas; And from 19.1% to 44.3% in urban areas. Most of this growth is due to government-sponsored schemes. The share covered by government-sponsored schemes increased from 12.9% in 2017-18 to 45.5% in rural areas; And from 8.9% to 31.8% in urban areas.
