Drawbacks of the public health system:

1) There is a fragmented approach since the conceptualization and planning of the

all the programs is centralized and the specific needs of the local area are not
taken into account.
2) Accessibility, utilization and acceptability of the programs is low because the
Infrastructure set up by the government is based on population norms rather
than habitation.
3) There is a gap between the demand and supply of human resources thereby
causing people to waste time waiting in queues for treatment or consultation.
4) Though there is implementation of infrastructure but the quality of service offered is not consistent
in India.
1.4 PRIVATE SECTOR IN THE INDIAN HEALTHCARE DELIVERY SYSTEM
In Economics, private sector represents a part of the economy, which is operated by an individual or
a group with the underlying objective of maximizing profits. A private sector institution is not operated
or under the control of the State. Third Sector or Not-for-Profit sector, on the other hand, is operated
by voluntary or community organization, with the objective of providing assistance to the poor and
underprivileged sections of the society and thereby contribute to social welfare and equity.
While trying to understand the connotation of private sector in the Indian health service delivery
sector, it is important to appreciate, that segmentation of the Indian healthcare system cant be made
purely on the basis of the organizational incorporation (i.e. a for profit or a trust). Though the
incorporation of an organization plays a critical role in determining the philosophy and objectives of
the organization, it doesnt take into account certain considerations of professional management or
orientation towards generating surplus. This kind of segregation undermines the importance of
maximizing returns for not-for-profit organizations, for whom generating surplus plays a crucial role
in ensuring sustainability and funds for infrastructural up gradations to provide superior quality of
medical care services and cater to the need of the poor and underprivileged, by providing
specialized services, at affordable cost.

Compared to nations such as EU and Japan where major spending in healthcare sector comes from
the government India is an exception here in so far that it has one of the highest private spending on
healthcare. With a significant proportion of the Indian population still below the poverty line public
facilities are largely to cater to this segment however in the urban and sub-urban areas private
healthcare facilities are preferred. With rising income levels and exposure to international standards/
quality has raised the demand for quality private healthcare facilities.
The private health sector consists of the 'not-for-profit' and the 'for-profit' health sectors. The not-forprofit health sector includes various health services provided by Non Government Organizations
(NGO's), charitable institutions, missions, trusts, etc. Health care in the for-profit health sector
consists of various types of practitioners and institutions. The licensed practitioners range from
general practitioners (GPs) to the super specialists, various types of consultants, nurses and
paramedics, licentiates, and rural medical practitioners (RMPs).The out-of pocket spending on
healthcare by Indians is one of the highest, constituting 94% of the total spending in the private
health industry. Out of pocket is the direct outlay of households, including gratuities and payments in
kind, made to health practitioners and suppliers of pharmaceuticals and other goods and services,
intended is to contribute to the restoration or to the enhancement of the health status of individuals
or population groups. According to estimates an average household contributes 4 -6% of its
household income to healthcare with close to 80% going to the private sector. The advantage to the
private sector comes from little government interference and