Study On The Not-For-Profit Hospital Model In India

July 2, 2021

Study On The Not-For-Profit Hospital Model In India

In the recent past, the NITI Aayog has been endeavoring to study the Private Sector Healthcare Delivery landscape in India to ascertain the reach of quality healthcare, the health seeking behavior of the masses, and the healthcare expenditure borne by patients, through various studies. The studies revealed the lack of penetration of quality healthcare, especially among the economically weaker sections of society in both urban and rural areas. During these studies, the work done by the private not-for-profit hospitals came up for reckoning. There were many examples of commendable work being done to provide quality healthcare to the unreached at low cost; however, all these examples were in silos, and unknown to the larger section of the community. This prompted the need for a targeted study to gain a crisp and structured understanding about the not-for-profit hospital model in India


Despite economic growth and modernization, India continues to face significant challenges of unavailability and unaffordability in healthcare services. This is substantiated by the fact that India has a lower Bed Density than the rest of the world . In addition, existing hospital beds  and hospitalization services have a high level of concentration in urban areas, which in turn impact the accessibility and affordability of hospitalization services.


The not-for-profit hospitals currently account for only a miniscule share of hospitalization cases . Public hospitals that offer healthcare at negligible cost are overstretched. The burden of healthcare provision shifts to private hospitals, which generally offer healthcare at a higher cost to the patient, as they must sustain themselves. Private hospitals are largely divided into “for-profit hospitals,” which account for 23.3% of treated ailments and “not-for-profit hospitals,” which account for only 1.1% of treated ailments, as of June 2018. (Fig.3). The disparity is further revealed in terms of hospitalization cases (Fig.4), wherein the for-profit hospitals account for 55.3% of in-patients, while the not-for-profit hospitals account for only 2.7% of in-patients in the country, according to the findings of the NSS 75th round survey on Health in India.


A not-for-profit hospital does not make profits for its owners from the funds collected for patient services. The owners of these hospitals are often charitable organizations or non-profit corporations. The fees for service at these hospitals are generally lower than for-profit hospitals and the income from fees (above the cost of service) are reinvested in the hospital. These hospitals are a potential remedy to the challenges of unavailability and unaffordability of healthcare in India. The infrastructure, services, and charges of these hospitals are positioned to cater to the unreached and underprivileged population of the country. In addition, these hospitals have managed to create a perception of goodwill in the country not only through selfless healthcare services with a social cause, but also through various community engagement programs for education, vocational training, hygiene, sanitation, women’s empowerment and employment. Despite their limited presence, which is seen disproportionately in Western, Southern and North East India , the not-for-profit hospitals have a disproportionate impact on the local communities they serve



The not-for-profit Hospital sector remains a largely understudied sector in India with very less specific information available in public domain. Thus, this study aims to achieve the following objectives:

  • To document the dynamics of operations of prominent not-for-profit hospitals in the country
  • Are these hospitals providing low cost care?
  • Are these Hospitals providing acceptable quality of care?
  • What are the various levers that help them offer low-cost, high-quality care?
  • What are the best practices of these Hospitals that can be replicated?
  • What are the challenges that these hospitals face?
  • To suggest policy interventions to promote this sector
  • How can these hospitals become publicly more visible?
  • How can these hospitals become operationally more viable?
  • Can their expertise and network be leveraged to improve healthcare service delivery in Tier 2/ 3 cities and rural areas?
  • How can these hospitals associate in a better way with Government schemes?

    To download the full study, click here


    Study On The Not-For-Profit Hospital Model In India

    Niti Aayog





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