Why Indian healthcare system needs to increase its efficiency

Recently I was greatly distressed to read the experiences of Dr Bhagwan D Aggarwal with the state of scientific research in the country. Dr Aggarwal is a scientist who had worked with University of Pennsylvania in the past and had come back to India to participate in the scientific progress of the country. After 5 years of bitter experiences he left India, to go back to the US. Though one may feel bad for the scientist and his obvious frustration at our system is evident, it made me wonder if our healthcare system is different from the world described by Dr Aggarwal

One of the anecdotes he gives from his experiences in India, and I quote are “

“Less than 10 per cent of the instruments are ever utilised with less than 1 per cent instruments’ lifetime use time, especially for expensive equipment (Rs 5,000,000 (about US $80,000) or above).”

The News Minute Link


Now after reading this I wonder if we are using our medical equipment appropriately. For example, I understand that the AIIMS in New Delhi has a 6-month waiting for getting an MRI Scan. Why is that so? While this is happening I also learnt from a senior doctor in Delhi that there are more MRI Centers in a 2 KM radius of AIIMS than the entire city of London. Why do we need so many MRI’s and if we do need them then why isn’t AIIMS setting up more MRI Machines and recruiting radiologists to staff them?

Clearly there is a vested interest in not utilizing existing capability at AIIMS and rather referring these cases to private institutions for maybe a commission or cut.

Now this maybe a systemic problem, in other words inefficiency that is bred by the system. Let’s look at another myth in the Indian healthcare set. That is the lack of hospital beds.

Hospital bed occupancy in Delhi is ranging anywhere between 30% to 200% depending on the institution. But on an average the occupancy is like 70%. Most of these beds are occupied not by reisdents of Delhi but by those who come from other areas to Delhi for treatment. This is another case of the system bred inefficiency where the local District Hospitals and Rural Medical centers are not given the right infrastructure, processes, technology or the incentive to prevent these patients from going to Delhi and putting a strain on an already overburdened infrastructure.

The other myth is the shortage of doctors in India. While the doctor patient ratio is not optimal, but at the same time there are vacancies in both the government and private sector that never get filled. Instead most government set ups would like to hire doctors on contract. So, these doctors don’t have the perks of being a permanent employee but at the same time are loaded with responsibilities.

We are not saying that system based inefficiency is the only problem. There is an issue with the doctors as well. The lack of professionalism is rampant there as well. Private set ups (Non-corporate hospitals) mostly hire doctors on their ability to attract patients and extract fees out of them. This mostly leads to conditions of over diagnosis and over medication including admission of cases that may not have required admission in the first place.

So while the system inefficiencies cause doctors to deviate from their behavior, this deviation further causes inefficiencies that promotes the aberrant behavior. So it’s a vicious cycle that goes on plunging the system into chaos and uncertainty


The Lancet publishes a Right Care series in which issues like efficiency in the healthcare system are discussed. In one of the posts there Donald Berwick , a former Administrator of the Centers for Medicare and Medicaid Services wrote and I quote

“No one knows whether, in a perfect world, eliminating all underuse and overuse would produce net savings or increase total health-care costs. In richer nations, especially the USA, the result would almost certainly be reduced costs; in poorer ones, probably not.(Why?) But, rich or poor, no country can avoid the conclusion that overuse drains opportunities from finite health resources—what Nobel Prize winning political economist Eleanor Ostrom called “common pool resources”.8 For nations with tight constraints on investments in health, reducing overuse could offer the biggest opportunity for releasing resources to address underuse.”


He further elaborated and I quote


“I tend to think that, in low income nations, the amount of the economy and public resources invested in the production of health and health care tends still to be less than it should be.  The amount of needed expansion varies among nations. Therefore, although I am sure that reducing waste and overuse in low and middle-income countries is wise, feasible, and important (to free up resources), I suspect that, when it all balances out, the savings from reduction of waste will be less than the needed increases in investments in the pursuit of health and health care.  In wealthier countries, I do not believe that is the case.”

But experts in India believe that’s not the case.

“Actually, in India, at least, it is a vicious circle situation. The tremendous waste, while on one hand reduces incentive for further investment (especially when the funds are not utilized to a significant extent and the rest inefficiently) and on the other leads to breakdown of trust.” Says Dr Akhil Sangal, A senior Doctor and policy maker in India.

As Dr Aggarwal pointed out in his piece

“The prevalent mismanagement, corruption and stressful and unhealthy work-environment are wasting the talent and scarce resources of a poor country and bleeding the science.”

I would like to say that the same is true for healthcare. No matter how many advances we make in technology, till we don’t manage efficiencies in the system, we will continue to bleed both investments and people in the healthcare ecosystem. Do let me know your thoughts on the same and I would love to write a piece on how we are reduce inefficiencies and build a robust healthcare system that works for all of us.



Dr. Vikram Venkateswaran

Management Thinker, Marketer, Healthcare Professional Communicator and Ideation exponent

This Post Has 4 Comments

  1. PapayaCare

    Nice blog post here about the Indian Healthcare system. Indian healthcare system is very poor mainly in the rural areas, due to the inefficiency in the fund from the Indian trust and the unnecessary corruption. It needs to be increased the efficiency of the indian healthcare system.
    Keep posting such more informative.
    PapayaCare Indian-senior health care community.

    1. admin

      Thank you for your kind words. We would love to have your perspective too on our website.

  2. Manjoo Rawat

    Hi, informative article on research and development on Indian health care system

    1. admin

      Again thank you for reading the article and taking time to comment on it.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.