India’s healthcare system stands at a critical juncture. Like many low- and middle-income nations, a diverse and expanding private sector dominates India's healthcare landscape. In the last decade, this sector has undergone rapid corporatisation. Large private hospital chains have emerged and taken over medium-sized and charitable hospitals.
While private healthcare has undeniably expanded access to advanced medical facilities for millions, the unchecked commercialization of the sector has given rise to serious concerns. Reports of exorbitant charges, opaque and commercially driven unscientific treatment practices, and denying basic patient rights have become alarmingly frequent. The darker side of the system which is driven by profit over care is evident more than ever now.
In June 2024, a family in Mumbai faced a distressing situation when a private hospital refused to release their relative’s body unless they paid an additional ₹40 lakhs, despite already having paid nearly ₹6 lakhs in medical bills. Desperate for help, they contacted the SATHI (Support for Advocacy and Training to Health Initiative) helpline and were guided on their legal rights, including regulations requiring hospitals to display rates transparently and provide itemized bills.
Armed with this information, the family successfully negotiated with the hospital and secured the release of their loved one’s body without paying the exorbitant amount.
This case exposed two critical issues: first, the likelihood of grossly inflated medical billing, and second, the inhumane, unlawful practice of holding a deceased person’s body hostage that legal awareness could protect from.
The Patients’ Rights Charter, as reinforced by the Clinical Establishments (Registration and Regulation) Act (CEA), mandates transparency in hospital practices. It requires healthcare providers to display rates for all services prominently, issue itemized bills, and ensure that patients or their families are not subjected to unfair financial demands.
The charter also emphasizes the right to dignity, even after death, ensuring that no hospital can withhold a deceased patient’s body over payment disputes. Additionally, all hospitals must have a grievance redressal system with a designated officer to address complaints. If the hospital fails to resolve an issue, patients can escalate their concerns to the district registering authority for further assistance.
These provisions, when effectively implemented under the CEA, can prevent incidents like the one in Mumbai, safeguarding families from undue distress and financial coercion.
The rapid corporatisation of healthcare in India has brought significant concerns to the forefront. For example, cash-for-referral schemes have emerged which involve healthcare providers or diagnostic laboratories giving money or rewards to doctors or others for referring patients. This can lead to unethical practices, unnecessary treatments, and inflated healthcare costs.
Corporatisation has also contributed to a shift from small clinics to large private hospitals. Doctors in these hospitals are expected to follow strict protocols set by hospital management to increase profits. This focus on revenue over patient care has weakened trust between doctors and patients. Many patients, who suffer from the violence inflicted by the corporate hospitals, feel doctors are motivated by money and neglect their responsibilities. This has been linked to increased aggression and violence against doctors.
The solution to the profiteering in the private health system exists, albeit only on paper - the Clinical Establishments Act (CEA), a legislative solution that is one and a half decades old. Passed in 2010 with Rules enacted in 2012, the CEA provides solutions to many of the sector’s pressing issues, with specific sections addressing rate standardization, billing transparency, treatment guidelines, and patient rights. Yet over a decade later, implementation remains staggeringly inadequate.
As of now, 11 states and 5 Union Territories in India are provisionally registered under the Clinical Establishments (Registration and Regulation) Act, 2010 (CEA). The Act has been implemented in Arunachal Pradesh, Himachal Pradesh, Mizoram, and Sikkim, along with all Union Territories except Delhi. Additionally, Uttar Pradesh, Uttarakhand, Rajasthan, Bihar, Jharkhand, Assam, and Haryana have adopted the Act under Article 252(1) of the Constitution, empowering Parliament to legislate on their behalf. However, despite over a decade since its enactment, the registration remains provisional, with little to no progress in its effective implementation.
The costs of delay in implementation of the Clinical Establishments Act
The COVID-19 pandemic laid bare the unchecked commercialization of private healthcare. Hospitals, instead of serving as sanctuaries of care, turned the crisis into a profit-making venture.
Families were handed exorbitant bills—sometimes as high as ₹1 Lakh per day for ICU care—leaving them in debt. These stories, some of which have been compiled in a document containing striking patient voices during the COVID-19 pandemic, are symptoms of a system that looks at health care as a ‘market opportunity’ to maximize profits.
The CEA rules, particularly Section 9, provide a framework for rate standardization to curb such practices. However, the absence of implementation undermines its potential. Strict enforcement of rate ceilings and penalties for violations are essential to ensure healthcare affordability and protect patients from exploitation.
Inflated medicine prices
In India, there are no effective restrictions on the markups hospitals can impose during the sale of medicines. Prices of the vast majority of medicines remain outside the ambit of the Drug Price Control Order (DPCO).
In this situation, many private hospitals compel patients to purchase drugs exclusively from their in-house pharmacies at highly inflated prices. This exploitative practice not only places an additional financial strain on patients but also limits their ability to seek more affordable alternatives elsewhere.
A study during the COVID-19 pandemic revealed a large number of instances where medicine prices charged by private hospitals were majorly inflated compared to their purchase prices. Trade margins frequently charged by the hospital were found to be in the range of 200 to 400%.
To help prevent this, Section XV of the Patients’ Rights Charter asserts that patients must have the freedom to procure medicines from any source of their choice. Strict enforcement of this provision is crucial to empowering patients, reducing healthcare expenditure, and preventing hospitals from exploiting vulnerable individuals.
Lack of transparency: the need to display rates and itemized bills
Many private hospitals in India fail to display rate charts or provide itemized bills, leading to disputes and eroding patient trust. While a recent campaign in Maharashtra advocating for rate chart transparency has shown promise, such practices remain the exception rather than the rule.
Bills often vary widely in format and detail, with some hospitals issuing vague or incomplete statements. A survey by LocalCircles in 2024, involving nearly 23,000 citizens across 305 districts in India, revealed that only 47% of respondents who received hospital bills found them to be fully itemized, while 43% reported incomplete breakdowns, and 10% received only package charges with no details.
Similar instances have been reported from other parts of the country. In 2023, five private hospitals in Raipur and Bilaspur were fined for collecting excess and irrelevant tariffs against the prescribed norms under the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana and the state’s health insurance scheme.
Even in corporate hospitals, which are a subset of private hospitals known for their larger scale, irregularities in billing persist. A 2023 study by Dr. Marathe and colleagues revealed instances where patients reported receiving handwritten bills for substantial amounts—sometimes exceeding ₹200,000—that lacked basic details such as the hospital’s name.
Transparent billing is essential for rationalizing hospital charges. Both the CEA Rules (Section 9) and Patients’ Rights Charter (Sections II and III) require hospitals to prominently display rates and provide itemized bills.
To achieve this, standardized hospital billing categories and formats must be legally mandated. Healthcare packages should include comprehensive specifications of services and items to minimize ambiguity. Additional charges on medicines levied by hospitals or their ancillary units must also be regulated to prevent price inflation.
The way forward
The CEA offers solutions to many of the issues faced by patients due to unregulated private healthcare—ranging from exorbitant pricing and unethical practices to the denial of basic patient rights. Yet, its implementation remains stalled, primarily due to the influence of a powerful commercial medical lobby, a lack of political will, and insufficient pressure from civil society.
The Ministry of Health and Family Welfare must take immediate action to rectify this gross negligence. The notification of CEA minimum standards, pending since 2014, must be expedited to make registration under the Act operational.
Similarly, the framework for rate standardization stalled for over a decade, must be finalized without delay. Most importantly, the Patients’ Rights Charter must be effectively and universally implemented to curb the rampant violations and exploitation in private healthcare.
It is high time the civil societies united to demand enforcement of the CEA and Patients’ Rights Charter. Without collective action, the suffering of patients will continue, and the promise of equitable and regulated healthcare will remain unfulfilled.
Every day of inaction perpetuates suffering, financial ruin, and loss of dignity for countless patients—a systemic failure that cannot be condoned, and demands no further evasion of accountability. Ensuring affordable, ethical, and patient-centered healthcare is not a privilege but a fundamental right that needs to be delivered to every citizen of the country.
Edited by Parth
Image by Gayatri
