Hospital is an ever growing industry, but with increase there comes a role of responsibility. The responsibility cannot always be placed on the Government who takes care of majority of facilities to be provided. For the last 5 decades the Government of India has systematically nurtured the private health sector. The unwritten policy of the Government runs parallel to the neglect and now the gradual withdrawal of the state from the responsibility of people’s health. Such a consistent support and encouragement to the private health sector are very important reasons for the failure to provide universal basic health care to all people of the country.

Today there are about 11,25,000  practitioners of different medicinal systems registered with various medical councils of India. Out of which only 1,25,000 are in Govt. Services (including those in Central health service, the armed forces, railways, state insurance etc), that leaves about a million doctors floating around in the private sector, 60-65% of the practitioners are concentrated in cities. The States in India offer subsidies, loans, tax waivers and other benefits for the setting up of private practices, hospitals, diagnostic centres and pharmaceuticals e.g. the Government subsidises the unethical and exploitative private health sector via medical education at the expense of medical exchequer. Assuming that the Govt. Spends about Rs 10 lakhs (1 million) at current prices on the education and training of each doctor and about 80% of the out turn of public medical schools either joins the private sector or migrates abroad, the country looses large resources which could have been used for public benefit. The country bears a loss of Rs4000-5000 million due to the out-migration of four to five thousand doctors every year. Thus with such support the private health sector has grown into a giant, it is the largest health sector in the world, with 60-80% of healthcare sought in the private sector and households contributing 4-6% of their incomes, at present crossing over 500 billion healthcare market in India.

While the expansion of the private sector is mainly responsible for high and increasing inequity in access to healthcare, its internal functioning is riddled with problems and its claim of better efficiency and quality service are yet to be objectively proven.  Further malpractice is very common, irrational and unnecessary diagnostic tests and surgeries are rampant and ethics are by and large discarded.


  1. Development would be faster.
  2. Effective and time bound results.
  3. Cost cutting and fund savings.
  4. Improve the performance and quality of work.
  5. Increase the productivity.
  6. Significant growth in business.
  7. Innovative solutions.
  8. Promotion of technological advancement.
  9. Development of capital market.
  10. Raising extra-revenues for the government.
  11. Eliminating hidden unemployment and reducing the power of public employee unions and monopoly.
  12. Share the workload and burden of the Government.
  13. Minimising the wastage of resources with the objective of optimum utilization of them for obtaining the pre-determined objectives, properly and effectively.
  14. To control the inflation rate.
  15. To make a global image among the developed countries for worldwide recognition and reputation.


There are advantages as well as disadvantages of growing privatization in healthcare industry. Some of the advantages are:-

  1. Basic advantage in privatization is accurateness and commitment towards the service as private organizations are very much concerned about the profits they make ultimately which depend on the quality of service being provided by them and the public response towards it.
  2. Privatization generates more revenue s compared to Govt. Enterprises, thus Govt. Can indirectly earn a bit more by leasing out enterprise to private firms.
  3. Customer support and satisfaction basically is of much interest in private firms comparatively.
  4. Save tax payers money:- By applying a variety of privatization techniques to state services, infrastructure, facilities, enterprises, a land, a construction cost, comprehensive state privatization programs can reduce program cost.
    Along with this privatization also creates a steady stream of new tax revenues from private contractors and corporations who pay taxes and license fees, while state units do not.
  5. Increase flexibility:-Privatization gives state officials greater flexibility to meet program or project needs/demands, various long term project plans are there, so according to that Govt. Can replace the private firm if it is not meeting contract standards, cut back on service. Add to service during peak periods or downsize as needed.
  6. Improve service quality:- A number of surveys have indicated that public officialsbelieved service quality was better after privatization.
  7. Increase efficiency and innovation:- Pvt. Mgmt. Can significantly lower the operating costs through the use of more flexible personnel management and practices, Job description and Job categories, streamlined SOP’s (standard operating procedures), simplified procurement and procedures as compared to hard, complex and rigid nature of public sector and its management style.
  8. Allow policymakers to steer, rather than row:- Privatization allows state or Govt. Officials to spend less time in managing personnel and maintaining equipments and facilities to be provided to the citizens.
  9. Provides greater choice to the patients for their level of treatment.
  10. Reduce waiting lists- The waiting lists of patients will automatically reduce with increase in number of private practitioners.


  1. The biggest threat is the reliability, there is nothing that backs up the private organization, whereas Govt. Can control and back-up its enterprises easily in terms of funds.
  2. There are more chances of bankruptcy in private organization where are chances are very less in Govt. Organizations.
  3. Quality of services may be little compromised to gain more profit.
  4. Some departments need social responsibility which can be done only by Govt. example police department, law, traffic etc.
  5. Jobs for relatives, biasness and partiality may raise the serious impact on society like unemployment and dissatisfaction.
  6. Owner’s association and monopoly.
  7. of branches and development in rural areas, as private players are money/profit minded so that they are least interested in such places.
  8. Always a threat and pressure on working staff.
  9. As private players are purely commercial in Nature and lack ethical behaviour in human morale at times if not all but certain organizations, this could be a great barrier and inconvenience for poor and uneducated people.
  10. Private firms are not transparent as Govt. System is.
  11. If the private party is inefficient, there is every possibility of the business winding up.
  12. Private players are not powerful and face lot of restrictions on many things but Govt. Is more powerful and dominating in governance /authority.