The Covid impact on India's healthcare ecosystem

SINCE JANUARY 30, 2020, when India reported its first case of Covid-19, in Thrissur, Kerala, the country has had 45,055,912 confirmed cases, the second-highest in the world after the United States, and 5,33,834 deaths after the U.S. and Brazil, according to the WHO Covid-19 dashboard (August 20). India, which launched a massive vaccination programme in January 2021, reported 162 active cases and 157 deaths in 2025 (as of August 20). But Covid-19 continues to scare us: on July 2, Karnataka chief minister Siddaramaiah wondered aloud if the vaccines were behind the deaths of 23 people by heart attacks within 40 days in Hassan. The Union government countered by citing complementary studies by the Indian Council of Medical Research (ICMR) and the National Centre for Disease Control (NCDC) that did not find any “direct link” between Covid vaccinations and sudden deaths. The pandemic is no longer a major concern; what is scary are the findings of two recent studies on the overall health of Indians. The Health of the Nation 2025 study by the Apollo Group, India’s largest private hospital chain, revealed a silent epidemic of undiagnosed chronic diseases. Millions are affected without visible symptoms, and the diseases often show up during health checkups at hospitals. Apollo, which operates 72 hospitals, analysed data from its de-identified electronic medical records, which included preventive health checkups and studies. For example, about 26% discovered they had hypertension, and 23% were found to be diabetic. Fatty liver disease, post-menopausal health decline, and childhood obesity are rising alarmingly. An estimated 5.8 million Indians die from non-communicable diseases (NCDs) each year. One in four Indians faces the risk of dying from an NCD before reaching the age of 70, a trend that has accelerated after Covid-19. The other study, by Plum, one of India’s leading employee health benefits platforms, which analysed data from more than 100,000 telehealth consultations, says the health of employees of corporate India is at high risk: 63% have high or elevated blood pressure, 38% have high cholesterol, 17% are obese, 11% are pre-diabetic, and 20% are troubled by mental health issues and anxiety. “While there has been a sharp rise in myopia progression among children, in adults, particularly those with diabetes and age-related macular degeneration (ARMD), missed routine care and injections led to disease progression during Covid-19, says Kaushik Murali, president, medical administration, quality & training, Sankara Eye Foundation, India. Lessons learnt But while Covid variants have weakened over the years, the pandemic galvanised India’s healthcare sector, from advanced diagnostics to hospital infrastructure, from telemedicine to government-backed healthcare platforms, as huge gaps were exposed. Suneeta Reddy, managing director, Apollo Hospitals Enterprise, points out that the World Bank and the International Monetary Fund estimate Covid-19 triggered an economic shock of over $3 trillion globally, “revealing the fragility of underfunded health systems and the high cost of inaction”. Priyanka Aggarwal, India and South East Asia leader of Boston Consulting Group’s healthcare practice, says the Covid-19 shock exposed critical gaps in India’s healthcare system. “The pandemic exposed critical gaps... prompting a coordinated response from both the Central and state governments. Public health spending has nearly doubled since 2020, reaching over ₹6 lakh crore in FY25.” Since then, Indian healthcare has set a course for a new future. Ameera Shah, promoter and executive chairperson, Metropolis Healthcare, says, “The diagnostics industry has seen significant evolution post-Covid, driven by heightened health awareness, increasing consumer expectations, and a growing emphasis on preventive care. The pandemic also accelerated the adoption of molecular and genomics-led testing and other high-end diagnostics.” For example, PCR (polymerase chain reaction) uses specific DNA sequences to detect infectious agents or genetic abnormalities. NGS (next-generation sequencing) can analyse an individual’s genome, which is useful for identifying disease-causing mutations and personalised treatment. Artificial intelligence (AI) and machine learning (ML) algorithms are being used to analyse medical images, predict disease risk, and personalise treatment plans. India’s GDP shrank by 7.3% during FY21, when the pandemic peaked, the worst annual contraction in four decades. Fiscal deficit widened to 9.2% of GDP from 3.5% in pre-pandemic days. According to the Centre for Monitoring Indian Economy (CMIE), 120 million lost their jobs and livelihoods in April 2020 alone, as the government ordered a 21-day nationwide lockdown to severely restrict people’s movement. The private sector launched satellite clinics in rural areas to add to the government’s network of primary health centres (PHCs). Over 200,000 health and wellness centres have been set up for comprehensive primary care in the past four years. Healthcare’s share of GDP now stands at around 3.8%, up from 1.3% a decade ago. Private hospitals, which account for 66% of hospital beds, play a crucial part in this transformation, adding significant capacity, expanding into new geographies, and adapting to new realities in healthcare delivery. India’s doctor-population ratio currently stands at 1:811, better than the WHO standard of 1:1,000, health minister J.P. Nadda informed the Lok Sabha in November last year. While the National Health Policy 2017 recommends the availability of 2 beds per 1,000 population, the current ratio is only about 0.6 beds per 1,000 people. Metro cities account for nearly 60% of hospital beds, while 70% of the population resides in Tier II cities and rural areas, says another report jointly conducted by BCG and the Organisation of Pharmaceutical Producers of India (OPPI). Vishal Bali, executive chairman, Asia Healthcare Holdings (AHH), which runs multiple chains of single-specialty hospitals, says, “Post-Covid, these regions are emerging as powerful growth engines for India’s healthcare sector, driven by rising disposable incomes, improved infrastructure, increased health awareness, and a growing aspiration for quality care.” Digitalisation and advanced IT systems are also transforming healthcare in India, with the private sector playing a big role. Private sector leads India has more than 70,000 hospitals, of which 63% are in the private sector. Before the pandemic, India had only 43,500 hospitals. The private sector led the expansion, adding approximately 30,000 hospitals. Private hospitals in India are expected to increase their capacity by over 4,000 beds in FY26, at an investment of ₹11,500 crore, following an aggressive addition of around 6,000 beds in FY25. Crisil Ratings estimates that the bed addition in just these two fiscal years will equal those added between FY20 and FY24. “With occupancy close to the peak of 65-70% and continued demand for quality healthcare, private hospitals are investing ₹25,000 crore in FY25 and FY26, nearly 80% higher than the average annual investment in the previous four fiscals,” says Anuj Sethi, senior director, Crisil Ratings. Eleven listed hospital chains and two major unlisted players are expected to add around 14,500 beds over FY26 and FY27, with a combined capital expenditure of ₹30,000-32,000 crore, predicts rating agency ICRA. Crisil estimates that half of the beds will be in new locations and 40% will come from the expansion of existing facilities. The rating agency, which analysed the performance of 91 private hospitals with a combined revenue of approximately ₹64,000 crore, says that, over FY20-FY24, private hospitals showed a compounded annual growth rate (CAGR) of 18% in revenue and a healthy operating profitability of 18%. Reddy of Apollo Hospitals says, “We are adding over 4,300 beds in the next five years at an investment of over ₹8,000 crore to bring advanced care closer to communities across India.” The first phase of 2,000 beds is expected to be ready within the next year. Other leading chains are also on an expansion spree. Fortis Healthcare plans to add approximately 200 beds at its Noida and Faridabad facilities in early FY26 and is exploring opportunities in the NCR, Mumbai, and Bengaluru regions. Manipal Hospitals, the Bengaluru-based chain backed by Singapore’s investment firm Temasek, acquired Pune’s 11-hospital Sahyadri chain in Maharashtra for ₹6,400 crore in July, taking its bed count to nearly 12,000. Aster DM Healthcare is investing over ₹1,900 crore to reach a bed count of 13,600 by the end of FY27. Aster will merge with Quality Care Hospital, which is backed by Blackstone and TPG, to reach a bed count of over 10,150 across 27 locations. Plans include adding 1,700 beds by FY27, of which 57% are expected to be in Tier II and III cities. The pandemic exposed the vulnerabilities of centralised infrastructure, prompting hospital chains to decentralise. “In urban areas, large flagship hospitals are giving way to a hub-and-spoke model centred on 250–350 bed facilities located closer to patient clusters, to address rising demand for convenience, improve agility, and reduce real estate and operational costs,” says BCG’s Aggarwal. The transformation is more pronounced in Tier II and III cities, which are home to nearly 70% of the population, but have historically had limited healthcare infrastructure. Private players are expanding aggressively in these regions, leveraging favourable unit economics and increased demand spurred by insurance coverage under Ayushman Bharat. Telemedicine networks and low-cost hospital models, pioneered by organisations such as Narayana Health and Apollo Hospitals Entreprise, are expanding healthcare access to underserved geographies, where remote patient monitoring, AI-driven diagnostics, and Cloud-based platforms are also gaining momentum. From AI-assisted X-ray interpretation in rural clinics to tele-ICUs in small hospitals, digital innovation is expanding specialist access on a large scale. “Apollo 24/7, our omnichannel digital health platform, has around 40 million registered users with over 820,000 daily active users. In FY25, the platform’s GMV was ₹3,007 crore, a growth of 8% over FY25,” says Reddy. India’s single-specialty healthcare sector, in which hospitals focus on a single area, such as fertility, cancer, maternal and childcare, nephrology, and eye care, is also growing rapidly. The sector attracted nearly 36% of total PE (private equity) investments in healthcare over the past decade. An Avendus report predicts that the market share of single-specialty hospitals will increase to 40% of the healthcare market by 2028, from 30% at present. “On the back of our investors GIC and TPG Growth, we have invested $225 million behind four single-specialty enterprises in India. We see single specialty as our core focus area in the next decade,’’ says Bali of AHH. PE and venture capital funds are backing the expansions. “Healthy return metrics have attracted a substantial investment of ₹55,000-60,000 crore from PE and equity markets since fiscal 2022,” says Crisil’s Sethi. Government push In May, the ICMR and the National Institute of Virology (NIV) in Pune inaugurated a High-Performance Computing (HPC) facility. Named ‘Nakshatra’, it has been developed under the Pradhan Mantri Ayushman Bharat Health Infrastructure Mission (PM-ABHIM). It is part of the “High Performance Computing Next Generation Sequencing (NGS) Hub” that aims to revolutionise how genomic and bioinformatics data are processed, addressing limitations faced during the pandemic due to conventional computing infrastructure. The PM-ABHIM is the cornerstone of the healthcare transformation following Covid-19, with an investment outlay of ₹64,180 crore from FY22 to FY26. It aims to establish district-level critical care units, diagnostic laboratories, surveillance systems, and IT-enabled platforms, creating a pandemic-ready infrastructure backbone. In 2018, the government launched the world’s largest health assurance programme, the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (PM-JAY), to protect economically vulnerable Indians from healthcare expenditures, which can be catastrophic for them. Targeting the bottom 40% of India’s population, the scheme covers approximately 123.7 million families. In October 2024, the government introduced Ayushman Vay Vandana, which extends the AB-PMJAY benefits to all senior citizens aged 70 and above, regardless of their income and social status. The AB-PMJAY has enrolled 5.8 million senior citizens and handled more than 267,000 cases worth ₹496 crore. India now has 178,105 Ayushman Arogya Mandirs (AAMs), formerly known as Ayushman Bharat Health & Wellness Centres, that offer primary healthcare, especially in rural areas. Before the pandemic, as of March 2019, there were just 17,149 AAMs. Under the National Health Mission (NHM), the government is establishing 46 day-care cancer centres (DCCCs) in district hospitals to decentralise care and reduce the load on tertiary facilities. It has also set up 16,000 Jan Aushadhi Kendras, which provide 2,047 generic medicines and 300 surgical items at 50-90% lower than the market rates of branded drugs. Pharmacies branded AMRIT (Affordable Medicines and Reliable Implants for Treatment) offer centralised supply points for drugs and surgical products, especially those required for high-end treatments. Budget allocation for healthcare has been rising over the past five years, from ₹71,268 crore in FY22 to ₹95,957 crore in FY26. The FY26 Budget earmarked ₹37,226 crore for the NHM to enhance disease surveillance, provide advanced testing facilities, and improve emergency preparedness, in addition to plans for establishing 200 oncology centres. The pandemic accelerated digitalisation of healthcare, transforming telemedicine from a fringe offering to a critical service. The Ayushman Bharat Digital Mission (ABDM), with an outlay of ₹1,600 crore over five years (2021–2026), aims to create the digital backbone necessary to support India’s evolving healthcare infrastructure. As of June 3, 2025, over 780 million Ayushman Bharat Health Accounts (ABHAs) have been created, with more than 550 million health records linked to them. The Telemedicine Practice Guidelines, released in March 2020, were followed by the rapid scale-up of eSanjeevani to over 275 million consultations. eSanjeevani is the world’s largest public telehealth platform. Medical education is not lagging: India has added 110,000 undergraduate and postgraduate seats over the past decade, representing a 130% increase. Plans are to add 10,000 seats in the coming year, and 75,000 seats over the next five years. The road ahead Industry experts say more needs to be done, like spending over 3% of the GDP on healthcare. Looking ahead, blended finance models — where public incentives complement private capital — will be crucial to closing infrastructure gaps. Public-private partnerships, including those supported by viability gap funding (VGF) and impact-focussed funds targeting underserved regions, are expected to define the next phase of investment, according to BCG’s Aggarwal. Banks remain the primary source of debt financing, particularly for hospital infrastructure. The Reserve Bank of India has improved capital access by classifying healthcare loans up to ₹12 crore in smaller towns as priority sector lending, making credit more affordable and accessible. Over 90% of our medical technology and consumables are imported and priced in U.S. dollars. Another issue is a lack of manpower, says Bali. More public-private partnerships and policy interventions are required in the sector, says Apollo’s Reddy. Once the issues are addressed, India’s healthcare system will be well-equipped to meet the needs of its population, the largest in the world, as well as those of foreigners. It will also be better equipped to face pandemics. 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The Covid impact on India's healthcare ecosystem

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