The healthcare cost has been on an unprecedented rise in the past few years. Growing almost head-to-head with retail inflation, the health inflation rate witnessed a y-o-y rise of 7.7% in June 2021. A microscopic look into the subgroups point at an increase in the medicine price – 8.6% y-o-y rise, increase in medical test costs 6.2%, consultation fees 4.5%, and hospitalization charges 5.9%. These numbers are not just worrisome for the economists but also for the end users of the healthcare ecosystem as they now have to arrange high hospitalization costs in India.
While the pinch of health inflation is felt across the entire healthcare ecosystem, for the end users it is more visible in private hospital admission rate in India. The difference in public vs private healthcare in India is stark. A treatment which would lie in thousands in the former would increase to lakhs in the latter.
Today, we are going to look into the difference in the hospitalization costs in India from the look of private vs. public healthcare. But before we dive into the state of the comparison, let us investigate the reason behind the cost difference.
Why is healthcare so expensive in India in private hospitals?
Public hospitals in India are known to operate on low manpower and technological support and long waiting lines. While the pandemic brought the sorry state of the public hospitalization system on the surface, even in the non-pandemic times, the reach of public sector was extremely limited and patients – in both rural and urban cities depended on the public health providers. This grim picture is despite the fact that the average hospitalization costs in India between public vs private hospitals bends towards private care.
The inefficiency in public healthcare is one of the key reasons why the private hospitalization cost has come to a rise.
Now that we have looked into the high-level reasons behind the rising average cost of hospitalization in India in the private sector, let us dive into some numbers.
Hospitalization costs in India
The cases of hospitalizations between public and private hospitals in the rural and urban cities show somewhat of a similar pattern – private hospitals seeing more admissions compared to their public counterparts. The percent of hospitalizations in private hospital in urban areas stands at 61.4% compared to 35.3% in the rural areas, while that in public hospital stands at 51.9% and 45.7% respectively.
Private vs. public hospitalization costs in India
The cost of admission in public vs private hospitals in India continue to be extremely disproportionate owed to the reasons we shared above.
Times of India recently did a Bangalore-focused check on the comparative cost of treatment in government and private hospitals in the city. They found that hospitalization in private establishments was 2-20 times costlier than in public hospitals. They found that a day stay in ICU in a public hospital cost Rs. 1,500, while the same stay in a private hospital came with Rs. 30,000 bills.
They further found that the cost of medical procedures also varied greatly between the two healthcare providers type. An open-heart surgery in a private hospital cost somewhere around Rs. 2.8 Lakh, while the same in a public hospital was Rs. 95,000. Likewise, knee replacement surgery would cost Rs. 65,000 in a government hospital and exactly four to five times more in a private hospital. Out of all the medical procedures, they found Cancer treatments to be the most disparate. In a private hospital, it cost Rs. 93,305 on average while in public hospitals it was Rs. 22,520.
Apart from the medical treatments and the bed cost, elements like diagnostic tests, doctors’ fees, package components, medicines, etc. were all equally disproportionately divided between public and private hospitals.
The difference in both minor and major surgery costs in India from the view of Public vs. Private gets all the more prevalent when we bring the urban vs. rural factor into consideration. The hospitalization costs in urban areas are a lot expensive than those in rural areas, as you can gather from the image of states with the highest hospitalization costs below.
Now, although there’s a stark difference in the hospitalization costs in India between a private and public hospital setup irrespective of whether you are in a rural area or an urban one. The undeniable reality is that health inflation continues to be on a rise. What you can do to be better prepared for these expenses is invested in a comprehensive health insurance plan.
How can insurance save you from the growing hospitalization cost?
By investing in a comprehensive insurance plan that looks into both pre- and post-hospitalization expenses you can prevent yourself from huge financial implications in the events of hospitalizations. In fact, there are a number of insurance plans, like the ones included in Onsurity membership that offer cashless hospitalization – meaning you won’t have to make any payment to the hospital other than the operational expenses. Moreover, as a way to protect your savings from the rising medical inflation, insurance companies charge market-driven premium amounts from you on an annual basis, meaning you never have to prepare for medical expenses thinking about inflation adjustments.
Above everything else, insurance gives you mental peace that your health is covered, and you won’t have to worry about arranging funds in times of emergencies.