New Delhi: Putting price controls on private healthcare could disincentivise investments in capacity creation and innovation, Apollo Hospitals Managing Director Suneeta Reddy said, responding to a parliamentary panel’s recommendation to cap room rents at private hospitals in major metropolitan cities.
The recommendation is part of the Parliamentary Standing Committee on Health and Family Welfare’s report on the affordability and accessibility of healthcare facilities in the public and private sectors. The panel has suggested that basic room charges at private hospitals in large metropolitan cities should not exceed the average room tariff prevailing at three-star hotels in the peripheral area or vicinity of the hospital.
Reddy addressed the issue during Apollo Hospitals’ earnings call, saying that while the healthcare major is aligned with the government’s objective of making healthcare affordable and accessible to every Indian, a one-size-fits-all approach to pricing would not be the right way forward.
“India still needs to add 2.4 million high-quality beds. The private sector needs to invest capital to fulfill this goal,” Reddy said.
She added that healthcare is at the core of a developing economy and is a vital contributor to infrastructure, employment, foreign exchange earnings and the creation of a healthy and productive workforce.
According to Reddy, India also needs a vibrant ecosystem for innovation, research and academia. She argued that price controls on private enterprises could have the unintended consequence of discouraging investments needed to expand healthcare capacity and drive innovation.
“Price controls on private enterprise may have the underside effect of disincentivizing investments in capacity creation and innovation, and we believe that a one-size-fits-all approach to pricing will not work as healthcare is more than merely a linear sum of inputs,” she said.
Reddy also pointed to the need for greater investment in research and development, noting that India’s R&D budget is lower than that of any large European pharmaceutical company.
“We look forward to continued engagement with all stakeholders, insurance providers, as well as the government, to shape a framework that is trusted by patients and sustainable for providers, attractive for investment, and capable of meeting the healthcare needs of the next generation of Indians,” she said.
Private hospitals push back
Reddy’s comments come a day after NATHEALTH, the industry body representing India’s private healthcare sector, opposed the parliamentary panel’s proposal to benchmark private hospital room rents against nearby three-star hotel tariffs.
NATHEALTH said any pricing framework should account for differences in hospital categories, geographies and care settings, as well as the high costs associated with specialised infrastructure, regulatory compliance, medical technology and round-the-clock clinical support.
The industry’s concerns come against the backdrop of the parliamentary panel’s findings on the significant difference in healthcare expenditure between government and private hospitals.
Citing data from the 80th National Sample Survey covering the 12 months from January to December 2025, the Parlimentary panel said the average cost of hospitalisation was Rs 6,631 in government hospitals compared with Rs 50,508 in private hospitals.
For childbirth, the average out-of-pocket expenditure stood at Rs 37,630 in private hospitals, compared with Rs 2,299 in government facilities, according to the panel.
The committee’s recommendation seeks to address the affordability burden by bringing greater standardisation to private hospital room charges. It has proposed that resident doctor costs, nursing costs, disposable and consumable costs, meal charges and laundry charges could be added to the basic room tariff as part of a broader rationalisation of hospital costs.
Apollo continues capacity expansion
The debate over pricing comes as private hospital chains continue to invest heavily in expanding healthcare capacity. Apollo Hospitals reported a 34 per cent year-on-year increase in consolidated net profit for the quarter ended June 30, 2026, while revenue from operations rose 20.6% to Rs 7,043 crore. The company has also announced plans to add more than 5,800 beds over the next five years, taking its planned expansion to new hospitals and urban clusters.
For private healthcare providers, the concern is that pricing interventions need to balance affordability for patients with the economics of creating and operating high-quality healthcare infrastructure.
The parliamentary panel’s proposal has therefore opened a broader debate on how India can reduce patients’ out-of-pocket expenditure while ensuring that private healthcare providers continue to have sufficient incentives to invest in beds, specialised care, technology and innovation.
Reddy’s comments underline the private sector’s position that affordability measures need to be designed in consultation with providers, insurers and other stakeholders, rather than through a uniform pricing framework across different hospitals and geographies.
