Why Hospitals, Not Pharma, Will Shape the Next Decade of Healthcare

For years, whenever we spoke of India’s healthcare story, pharma took centre stage. After all, we are the “pharmacy of the world.” But that narrative, while true, is incomplete. The real story — the one that will define the next decade of healthcare — is unfolding much closer to home, inside our hospitals.

Why? According to an article published in The Mint two days ago, 60% of India’s healthcare economy is driven by hospitals. This isn’t just about infrastructure or bed counts. Hospitals have quietly become the command centres of our healthcare system. They are where diagnostics, insurance, pharma, med-tech, and digital health converge. Unlike pharma, which primarily looks outward to global markets, hospitals are deeply local, addressing India’s most pressing challenges — access, affordability, and quality.

The Next 10 Years: A New Healthcare Horizon

If we look ahead to 2035, hospitals will be unrecognisable from what we know today. They will no longer be defined by the number of beds they operate but by the ecosystems they enable. Think of hospitals where AI-driven triage manages patient flow, where clinical trials run seamlessly alongside treatment, and where remote monitoring extends care into the home. In this future, pharma will still matter — but it will be hospitals that orchestrate patient journeys and set the terms of engagement for the rest of the ecosystem. Additionally, a tectonic shift in primary care and wellness is expected to be driven by technology, as personal health management, fueled by digital tools, is poised for massive adoption across the ecosystem.

And the numbers tell a compelling story. India has just 15 beds per 10,000 people — one-third of China’s and less than a quarter of OECD nations. This chronic shortage ensures that demand will far outstrip supply for the foreseeable future. Unlike the pharmaceutical industry, where growth depends on exports and global regulations, hospital demand is intrinsic, local, and non-deferrable.

Policy and Insurance: A Dual Tailwind

Policy shifts are reinforcing this momentum. Ayushman Bharat is expanding access at the base of the pyramid, bringing millions of new patients into the formal care system. At the same time, private insurance is fueling premium care, pushing hospitals to upgrade infrastructure and expand specialities. Together, these two forces — volume growth at the base and value growth at the top — are making hospitals the primary beneficiaries of healthcare capital flows. The next set of GST reforms is expected to see a significant reduction in the GST charged on health insurance premiums, with numbers suggesting a decrease from the current 18% to 5% or even lower. I covered some of the aspects of that change in my earlier article on the impact of GST on Health Insurance in India. Medicines are also slated for a similar reduction.

Hospitals as Platforms, Not Just Providers

But growth alone isn’t the story. What excites me most is the transformation of hospitals into innovation platforms. Increasingly, hospitals are:

Partnering with pharma to host clinical trials.
Driving adoption of AI, robotics, and digital health tools.
Acting as the proving ground for med-tech devices.
Testing value-based care models that reward outcomes, not procedures.

Pharma remains product-driven, but hospitals are integrating products, services, and technology into holistic patient journeys. That is where leadership vision will be tested over the next decade.

The Leadership Lens

We’ve said before that healthcare leaders can no longer think in silos. They need to build ecosystems that bring together insurers, technology partners, pharma companies, and clinicians into a unified model of care. Hospitals are now at the centre of that vision — the natural orchestrators of how patients enter the system, how capital is deployed, and how innovation reaches the bedside.

In other words, the future CEO playbook for healthcare is not about running an efficient hospital chain; it’s about driving innovation. It’s about reimagining hospitals as ecosystem architects — platforms that connect, coordinate, and catalyse the wider healthcare value chain. Those who embrace this shift will be the ones writing India’s healthcare story for the next decade.

A Call to Action

It’s tempting to continue celebrating pharma’s global story — and we should. But we cannot afford to overlook the domestic story that impacts 1.4 billion people daily. Hospitals are not an “adjacent” sector; they are the core of India’s healthcare narrative.

Here’s the call to action: If you are a healthcare leader, start allocating your strategic bandwidth to hospitals. Whether through partnerships, innovation pilots, or policy advocacy, this sector will define India’s healthcare destiny.

Because ten years from now, when we look back, the question won’t be how many drugs we exported. It will be whether our hospitals rose to the challenge of making India healthier.