Parliamentary panel bats for cap on private hospital room rents

The panel has recommended that basic hospital room tariffs should not exceed average room rates at three-star hotels in the peripheral area or vicinity of the facility

The average cost of inpatient treatment in India stood at ₹37,858, of which patients paid ₹34,064 out of pocket, highlighting the burden of healthcare costs. Against this backdrop, a parliamentary standing committee has recommended capping private hospital room charges at the level of average room tariffs prevailing in three-star hotels in vicinity of the hospital. 

In its 176th report, titled Affordability and Accessibility of Healthcare Facilities in Public and Private Sector, presented to Parliament in August 2026, the parliamentary committee on health and family welfare said some private hospitals charge large amounts for hospital stays, particularly in metropolitan cities. 

“Having analysed the break up of the hospital billing structure the committee believes that rationalising of room charges needs to be done on an emergent basis,” the panel headed by Rajya Sabha member Ram Gopal Yadav said. 

Citing the 80th round of the National Sample Survey conducted by the National Statistics Office (NSO) on Household Social Consumption: Health, the committee noted that the average cost of hospitalisation was ₹6,631 in government hospitals against ₹50,508 in private hospitals. The panel flagged wide variations in treatment charges and differential billing practices, including room rent-linked pricing. It noted that medical inflation and the commercialisation of private healthcare push vulnerable households into catastrophic debt and forced asset sales. It added that hospital room charges may vary across regions and hospitals within the same area because of differences in infrastructure, service levels and operating costs. “The resident doctor cost, nursing cost, disposable costs of consumables, meal charges, laundry charges can be added to the basic room tariff so that the entire cost is rationalised,” the report said. To enforce this, the committee recommended that the Ministry of Health actively coordinate with state governments to mandate uniform adoption and strict enforcement of the Clinical Establishments (Registration and Regulation) Act, 2010. 

The panel said the pricing ecosystem often limits financial capping to acute interventions or surgical procedures, leaving patients vulnerable to unregulated out-of-pocket expenses during extended follow-ups, rehabilitation or end-of-life care. 

While welcoming the report’s findings, industry players asked for a comprehensive costing exercise across categories of hospitals, geographies and care settings. Siddhartha Bhattacharya, Secretary General of healthcare industry body Nathealth, said healthcare requires over $300 billion investments immediately. The sector grapples with twin pressures of ensuring affordability and sustainable pricing on the revenue side, while attracting capital despite having one of the lowest returns on investment among the top 20 sectors of the economy, he added.  This, experts say, is a key difference between hospital charges and hotel charges.

 

“As we understand, pricing and costing are not the same, particularly when subsidies and differing operational efficiencies influence the risk-reward equation of various care delivery models,” said Siddhartha Bhattacharya, Secretary General of healthcare industry body Nathealth.

 

“As we understand, pricing and costing are not the same, particularly when subsidies and differing operational efficiencies influence the risk-reward equation of various care delivery models,” said Siddhartha Bhattacharya, Secretary General of healthcare industry body Nathealth.

 

It recommended the formulation and regulatory enforcement of Continuum of Care packages, bundling preventive screening, diagnostic, curative and palliative services under a single, capped financial umbrella. This would ensure economically disadvantaged patients are not forced to abandon care, the panel said. The panel also advocated expanding existing public health insurance schemes, such as PM-JAY, to cover outpatient consultations, diagnostic evaluations and post-hospitalisation care. 

The findings come at a time when a case on standardising hospital charges is pending in the Supreme Court.

In February 2024, the apex court asked the Centre to hold consultations with state governments to establish a standard fee range across facilities under the Clinical Establishments (Central Government) Rules, keeping in view the living standards of different regions.

 

It also warned that if a solution was not found, it would be forced to apply Central Government Health Scheme (CGHS) rates for treatment services at private healthcare facilities until standardised rates were set.

 

In April 2024, the Centre told the Supreme Court that it was urging states and Union Territories to hold broader consultations with multiple stakeholders to determine standardised hospital rates.

 

The case, however, remains pending, with no hearing scheduled after September 2024. The current proposals are recommendations of the parliamentary standing committee and will require government acceptance and regulatory action before becoming binding on hospitals. The committee emphasised that a dynamic, consultative pricing mechanism alongside rate caps is necessary to balance patient affordability with the operational viability of private healthcare providers.