• Kenko Desk

One Nation, Different Prices: Healthcare Costs Across India

Why are medical costs so wildly different across different parts of India? And what can you do to be prepared for this? Let’s find out!


Healthcare costs rising in India
Rising healthcare costs across India. Representational image.

Up north in Kashmir, medical prices have touched great heights. Down south in Kerala, they are not climbing that high. Some surgeries have ‘bypassed’ medical inflation in Kolkata but have failed to do that in Chennai.


It All Depends On Where You Live!


Costs of medical procedures are starkly different across different Indian cities. For instance, in 2019, a bypass surgery would cost at least Rs. 70k in Bengaluru but at least Rs. 1.7 L in New Delhi. And the picture is just as diverse for overall medical costs in general, surgery or routine.


The average annual spending of a family of four in Mumbai was estimated to be around Rs. 48k in 2015. This is surely much higher than in other parts of India. Not only are the costs in urban areas more than rural areas, costs differ a lot from state to state as well. For example, in 2021, medical prices soared by 23% in Telangana but by 9.7% in Odisha.


Has geography got to do something with it?


Are the backwaters of Kerala washing away its medical inflation woes? Are the hills of Uttarakhand making its medical costs soar to new heights of 13.6%? Actually, it’s got little to do with geography. It’s not like states in the south are doing better than states in the north.


In fact, it’s got nothing much to do with how rich a state is either. For instance, a relatively less wealthier Rajasthan is doing much better than a more well-off state like Gujarat on medical price rise.


Then why is it happening?


One factor could be the availability of medical workforce in different states. For instance, the population of Karnataka is less than that of Bihar, but Karnataka has far more doctors than Bihar does. In fact between them, Karnataka, Maharashtra and Tamil Nadu together have 37% of all allopathic doctors in India. With more workforce, it's likely that there are more private hospitals which are costlier than government hospitals. On the other hand, with a smaller workforce, more people rely on government hospitals and this can mean lower prices generally when it comes to consultations and surgeries.



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Another major factor is the difference between the healthcare systems of different states. Having battled many public health threats like the Nipah virus before the Covid-19 pandemic, Kerala has scaled up its already superior medical infrastructure. This obviously has an impact on the medical prices over there which are better when compared with other parts of India. Kerala consistently tops the state-wise health index in India.


Accessibility also matters. If it's difficult to transport medicines to a particular city/state and if there are too many taxes on them, then medicine prices naturally go up.

Has the pandemic got anything to do with it?


Another factor here is how the pandemic affected different states differently leading to many random patterns in medical prices across states. Each state had to make its own adjustments, its own policies and its own share of borrowings in response to the pandemic. On the basis of how badly the pandemic hit a state and how much the state borrowed to deal with the pressure, prices fluctuated across states.


How does it impact healthcare financing?


Differences in medical pricing can also impact how benefits are processed by companies in this space. For instance, in 2015, Mumbai, Delhi, Bengaluru, Chennai, Kolkata and Hyderabad accounted for about 40% of all the claims made in India.


With medical prices having gone up across many other Tier 2 and Tier 3 cities in India over the last 7 years and especially in the post-pandemic era, the share of other cities in claims made is also bound to rise.


Wherever the prices are high, people realise the importance of health plans more readily. And with the pandemic, we’re all more open to online consultations and even getting our health covers digitally. This is true not just for the metro cities but even for the smaller cities of India. In fact, 80% of customers from these cities buy protection from digital outlets, while only 69% of customers do so in Tier 1 cities.


Many of them are turning to new-age health plans that offer comprehensive health and finance solutions using technology and consumer insights. What ordinary Indians are looking for is not just to cover hospitalisations but also routine medical expenses like doctor consultations, lab tests, medicines and much more.


Getting a health plan in times of uncertain and rising medical prices is important. Especially if the area you live in is unevenly affected by them. Regardless of where you live, Kenko’s plans remain super-affordable with subscriptions starting as low as Rs. 299 per month.



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