According to data revealed by the Ministry of Health in response to a question in Parliament, the number of CGHS beneficiaries has grown by 39 per cent, from 34.2 lakh in 2019-20 to 47.6 lakh in 2023-24.
The numbers tell a story of rapid transformation—and growing concern. In just four years, reimbursements to private hospitals under the Central Government Health Scheme (CGHS) have skyrocketed from Rs 935 crore in 2019-20 to a staggering Rs 3,646 crore in 2023-24, an increase of almost 300 per cent. The proportion of CGHS spending directed toward private hospitals has surged from 24 per cent to nearly 60 per cent, marking a dramatic shift in how government healthcare funds are being utilised. While the rising number of CGHS beneficiaries—from 34.2 lakh to 47.6 lakh during the same period—may justify some of this increase, experts warn that the unchecked expansion of private-sector reimbursements could be leading to inefficiencies, abuse, and a dilution of CGHS’s original mission.
For decades, CGHS was envisioned as a primary care-driven system, offering preventive and outpatient services through a network of dispensaries. However, it now appears to be evolving into a mere referral pipeline for private hospitals. Critics argue that this shift undermines cost-effective healthcare delivery, favouring high-cost interventions over preventive and ambulatory care. A public health expert, speaking on the issue, pointed out: “CGHS was conceived as a neighbourhood healthcare model focused on comprehensive care. Today, it has become a referral agency for private hospitals, without due diligence on the necessity or cost-effectiveness of such referrals.”
The concerns don’t end there. In a response to a parliamentary question on March 21, the health ministry acknowledged receiving complaints about empanelled hospitals engaging in fraudulent billing, overcharging patients, and even denying treatment. A December 2023 advisory from CGHS headquarters explicitly warned hospitals against such malpractice. Unlike the Ayushman Bharat scheme, which caps spending at ₹5 lakh per patient, CGHS imposes no such limit. This, experts argue, creates an unchecked pipeline for expenditure, where private hospitals bill without adequate scrutiny.
A former government health official emphasised the consequences of this model, “With no ceiling on costs and no oversight on medical necessity, hospitals can simply continue billing the exchequer without accountability. There’s no system in place to evaluate whether a procedure was essential, whether alternative treatments could have been used, or whether preventive care could have avoided hospitalisation altogether.”
Between 2019-20 and 2023-24, overall spending on CGHS has increased by 54 per cent. While access to quality healthcare is crucial, a system with no financial safeguards is bound to raise red flags. The unchecked rise in private-sector reimbursements underscores the need for stricter cost controls, better monitoring mechanisms, and a renewed focus on primary and preventive care. Without these reforms, CGHS risks becoming a financial black hole—one that benefits corporate hospitals far more than the government employees and pensioners it was designed to serve.
