Published Aug 11, 2026 | 7:00 AM ⚊ Updated Aug 11, 2026 | 7:00 AM
The committee found that private hospitals, especially in metropolitan cities, charge large sums for hospital stays.
Synopsis: A parliamentary committee wants the government to cap hospital room rates at nearby three-star hotel rates and fix package prices for surgeries. It found private hospitals charge five to 10 times more than government hospitals, and recommends capping medical device prices, medicine markups, and binding cost estimates before complex treatment begins.
While hospitalisation costs have risen across the country, treatment in private hospitals is often five to 10 times costlier than in government facilities, a parliamentary committee on Health and Family Welfare has said.
The panel now wants the government to put a ceiling on what private hospitals can charge for rooms. And, they want them not to cross the limit of a three-star hotel in the periphery.
“The room charges for a hospital should not exceed the average room tariffs prevailing in three-star hotels in the peripheral area or vicinity of the hospital,” the parliamentary committee recommended in its report.
It also called for this benchmark to become mandatory for “all private hospitals in large metropolitan cities”.
The proposal sits inside a wider push to regulate private healthcare prices, spanning treatment packages, diagnostics, medical devices, medicines and the cost of managing a disease beyond the hospital stay.
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The committee builds its case on the gap between public and private healthcare.
“Treatment in private hospitals is often five to ten times costlier than in government facilities,” the committee said, adding that childbirth and illnesses such as cancer, heart disease and kidney failure show the widest divides. It put the average cost of hospitalisation at ₹6,631 in government hospitals against ₹50,508 in private hospitals.
The committee calls this a “deepening healthcare affordability crisis” and traces the disparity to what it terms the “rampant commercialisation of private healthcare”. It cites “excessive billing, unnecessary diagnostics, and soaring costs for routine procedures” such as childbirth.
For childbirth, the committee recorded average out-of-pocket spending of ₹37,630 in private hospitals against ₹2,299 in public facilities.
It said these costs push vulnerable households into catastrophic debt and force families to sell assets.
The committee also flagged outpatient treatment. A single outpatient visit costs ₹289 in government hospitals and rises to ₹1,447 in private hospitals. Childbirth expenses range from ₹2,299 in government hospitals to ₹30,000-40,000 in private hospitals, a gap the committee calls “10-15 times”.
The committee found that private hospitals, especially in metropolitan cities, charge large sums for hospital stays.
“Rationalisation of room charges needs to be done on an emergent basis,” it said, after reviewing hospital billing structures.
Room charges vary even between hospitals in the same area, the committee noted, pointing to differences in “infrastructure, service levels and operating costs”.
Its solution benchmarks hospital rooms against nearby three-star hotels.
“The room charges for a hospital should not exceed the average room tariffs prevailing in three-star hotels in the peripheral area or vicinity of the hospital,” it said, and recommended making the benchmark mandatory for private hospitals in large metropolitan cities.
The three-star benchmark applies to the basic room tariff only. “The resident doctor cost, Nursing cost, disposable costs of consumables, meal charges, laundry charges can be added to the basic room tariff,” the committee said.
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The committee also wants hospitals to stop tying the cost of standard procedures to room category.
Private healthcare carries annual medical inflation of 10-13%, the committee found, and traces part of this to “a lack of standardised treatment protocols and exploitative differential billing practices, such as room rent-linked pricing for clinical procedures”.
The committee recommended that the government “formalise a statutory framework to implement standardised treatment guidelines and cap arbitrary price variations”.
It called specifically for “the elimination of room rent-linked inflation models for standard procedures across all private hospitals to protect citizens from catastrophic out-of-pocket expenses”.
The committee wants private hospitals to move away from variable pricing for standard procedures.
It points to Sankara Nethralaya as an example, noting the institution runs “well-defined package rates for common surgical procedures” that cover surgeon fees, consumables, investigations and post-operative care. The hospital does not practise differential pricing based on “demand, timing or urgency”, the committee said.
The committee wants this model extended across the sector.
“The Government should strictly mandate all private and public healthcare institutions to formulate and publicly display fixed, unified package rates for all standard surgical and medical procedures,” it recommended, specifying that packages should include “surgeon fees, diagnostic investigations, consumables, and standard post-operative care”.
Eliminating hidden charges and differential pricing would amount to a “de facto capping of treatment cost”, the committee argued, letting patients “precisely plan their medical expenses without fear of arbitrary billing inflation”.
It calls transparency “the first step toward effective cost rationalising”.
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The committee wants a broader mechanism to control private healthcare costs.
It recommended the “immediate formulation of a mechanism to standardise and cap the costs of essential treatments, diagnostics, and routine procedures across all private hospitals”.
It also wants the government to mandate “absolute price transparency before admission” and set up a “unified, fast-track grievance redressal ombudsman” to audit excessive billing and settle insurance disputes.
Insurance coverage alone cannot fix affordability, the committee added. “Expanding coverage alone cannot guarantee affordability if private sector healthcare costs remain uncontained,” it said, noting that average out-of-pocket spending per private hospitalisation episode stands at ₹34,064.
The proposed price-control framework extends to medical devices too.
The committee recommended a 100-point Medical Device Price Regulation Score, or MDPRS, to identify devices that warrant regulation, weighing factors including disease burden, procedure volume and out-of-pocket burden.
Devices scoring above 80 would sit in Priority I. Such devices, the committee recommended, should face “immediate and absolute statutory price capping”.
“This categorisation must trigger automatic regulatory intervention to fix the maximum retail price,” it said, pointing to coronary stents and knee implants as earlier examples of this approach.
For devices scoring 60-79, the committee proposed trade-margin regulation rather than a flat price cap, recommending that the government “cap the maximum permissible percentage markup” between the price to distributor and the maximum retail price.
The committee cautioned that regulation should not “stifle medical innovation, restrict the availability of cutting-edge therapies, or compromise clinical outcomes”. It recommended weighing Health Technology Assessments and clinical evidence before setting the extent of price regulation.
The committee cited coronary stents as proof that price regulation works.
“Coronary stent price caps alone” generated ₹13,353 crore in annual consumer savings, the committee said, and recommended expanding the list of regulated devices.
The Standing National Committee on Medicines should “systematically evaluate and incorporate high-volume diagnostic and therapeutic medical devices, such as advanced pacemakers, ophthalmic lenses, and implantable pumps, into the scheduled list of the DPCO”, it said.
Medicines face another round of price controls.
The committee also wanted tighter controls on medicine and device trade margins.
It noted that the NPPA’s trade-margin rationalisation measures, including a 30% margin cap for 42 non-scheduled anti-cancer medicines and a 70% cap on the price to distributor for select critical medical devices, generated “cumulative annual savings exceeding ₹1,984 crore for consumers”.
The collective average markup for common dosage forms still sits at around 43%, the committee found.
It recommended the government establish a “permanent statutory framework for trade margin rationalisation” and extend price caps to a broader range of high-cost, non-scheduled medicines for chronic diseases.
Price controls should not tip into unviability, the committee cautioned. “Extreme pricing pressures must not lead to commercial unviability,” it warned, noting this could push critical formulations off the market and force patients toward costlier alternatives.
The committee examined organ transplant costs too.
Liver transplantation costs “anywhere between ₹25 and ₹50 lakh across Indian hospitals”, the committee found, putting the procedure beyond reach for most families.
Some private centres charge very large sums for transplantation, the committee noted, calling this a departure that “runs counter to the spirit of organ donation as a public service rather than a profit opportunity for hospitals”.
For government-sector hospitals, the committee recommended rationalising liver-transplant prices to ₹4-5 lakh, a benchmark already achieved at IKDRC in Ahmedabad and Stanley Medical College in Chennai, which would bring the procedure “within reach of India’s working middle class”.
The committee also recommended scaling AIIMS-standard organ-transplant programmes to more states and keeping organ donation “strictly public-service oriented”, with safeguards to stop private hospitals from treating it as a profit centre.
Capping the cost of surgery alone does not protect patients from large bills later, the committee said.
The current system limits financial capping to “acute interventions or surgical procedures”, leaving patients exposed to out-of-pocket expenses during “extended follow-ups, rehabilitation, or end-of-life care”.
“True affordability must encompass the entire lifecycle of disease management,” the committee said, and recommended “Continuum of Care” packages that bundle preventive screening, diagnostic, curative and palliative services under a “single, capped financial umbrella”.
The system should ensure economically disadvantaged patients are not “forced to abandon care during the critical palliative or supportive phases”, the committee said.
For treatments such as immunotherapy, genomic therapies and targeted therapies, the committee acknowledged that folding them directly into standard capped packages risks overwhelming health-assurance schemes.
These therapies remain “prohibitively expensive”, it said, and recommended a regulated National or State Healthcare Corpus Fund to pool CSR contributions, philanthropic donations and charitable grants, subsidising or fully funding eligible patients’ high-cost treatment.
The committee also acknowledged the pressure on private hospitals.
Rising costs for medical supplies, medicines and equipment, combined with government price caps under schemes such as Ayushman Bharat and CGHS, “continuously squeeze profit margins and threaten financial sustainability”, the committee said.
“Forcing an unviable financial model upon hospitals ultimately compromises patient care,” it added.
The committee recommended a “dynamic, consultative pricing mechanism” and said government package rates should be “periodically rationalised to reflect realistic, rising operational costs”.
Rajiv Gandhi Cancer Institute and Research Centre made a similar point to the committee, stating that reimbursement rates under government schemes ignore capital investment, inflation and a reasonable surplus, leaving them unworkable for specialised private hospitals. It recommended periodic revision of package rates.
On Ayushman Bharat specifically, the institute said many specialised private hospitals stay outside the scheme because package rates run “often up to 70% lower than prevailing market costs” and do not adequately cover advanced cancer care.
The committee’s final recommendation addressed the uncertainty patients face once complex treatment begins.
Complex, multi-stage diseases such as cancer leave patients unable to anticipate total costs, the committee said, and patients need protection from “financial unpredictability and mid-treatment billing shocks”.
It recommended a statutory mandate requiring tertiary hospitals to provide a “comprehensive, legally binding upfront cost estimate” before starting any complex or prolonged medical intervention.
It also wanted hospitals to deploy dedicated “Financial Navigators” to guide patients and families through treatment estimates, available philanthropic support and health-assurance limits.
(Edited by Majnu Babu).
