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Comparing the average cost of outpatient care of public and for-profit private providers in India

Original author: Garg, S., Tripathi, N., Ranjan, A. et al. (2021) (DOI: 10.1186/s12913-021-06777-7)


Jhivir Kapoor.jpg

Jr. Economist intern

August 12, 2022


In mixed healthcare systems like India's, it is crucial to understand the cost of care associated with various types of healthcare providers to influence policy discussions. Existing studies reporting Out of Pocket Expenditure (OOPE) per episode of outpatient care in public and private providers in India do not provide a fair comparison because they have not considered the government subsidies received by public facilities. In India, no public nor private health insurance covers outpatient treatment, therefore for-profit providers must cover all expenses from customer payments.


The state of Chhattisgarh in India was taken as the area of study where the average direct cost per acute event was compared among public providers, for-profit formal providers, and informal private providers. 

The study used two datasets: 

a) Household survey on outpatient utilization and OOPE.

b) Facility survey of public providers to find the input costs borne by the government per outpatient episode.

Results & discussion

The average cost per episode of outpatient care was –

  • Rs. 400 for public providers

  • Rs. 586 for informal private providers 

  • Rs. 2643 for formal for-profit providers


The disease profiles treated by various types of providers were consistent. In public facilities, the number of patients and personnel resources was the main cost factors. Nearby suppliers were less expensive than other options.


The findings have implications for the desired mix of public and private providers in India’s health system. A key structural cost driver was the inadequate regulation of for-profit companies. Cost-saving measures include strengthening public programs that deliver curative medical services close to communities.

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