India’s parliamentary committee cautions that increased foreign direct investment in private hospitals could accelerate corporate mergers, raise healthcare costs, and reduce patient affordability, while advocating for targeted regulation and support in underserved areas.
A parliamentary panel in India has called for a fresh review of foreign direct investment rules covering private hospitals, warning that heavier inflows of overseas capital could accelerate consolidation, weaken affordability and turn healthcare into a profit-driven business at the expense of patients.
The Department-related Parliamentary Standing Committee on Health and Family Welfare, chaired by Samajwadi Party lawmaker Ram Gopal Yadav, said foreign money should be encouraged in medical devices, consumables and specialised drugs, but scrutinised more closely when it is used to buy or run hospitals. The panel argued that larger corporate groups have been acquiring mid-sized facilities that are often seen as lower-cost alternatives, a trend it described as aggressive corporatisation.
The committee linked its concerns to a widening price gap between private and public care. Citing the 80th round of the National Sample Survey, it said the average cost of hospitalisation was ₹50,508 in private hospitals, compared with ₹6,631 in government facilities. It urged the government to standardise and cap charges for essential treatment, diagnostics and routine procedures, while also expanding public multi-speciality hospitals so patients are not forced to travel to major cities for advanced care.
Its warning about consolidation echoes findings from recent research in the United States. A study highlighted by Yale School of Management found that when hospital systems acquired private practices, prices rose for both hospital and physician services, without any measurable improvement in quality. A National Bureau of Economic Research paper on hospital corporatisation from 2000 to 2020 found that acquired hospitals tended to charge more and cut operating costs through staff reductions, raising concerns about some aspects of patient care.
The Indian panel also proposed stronger support for private investment in underserved areas, including tax breaks, soft loans, subsidised land and cheaper electricity for hospitals in tier-2 and tier-3 cities and rural districts. At the same time, it said private providers receiving public support should reserve more beds for poor and vulnerable patients, strengthen ethics oversight and face tighter regulation to ensure promises of affordable care are actually kept.
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