Here is a list of the factors that contribute to the rising medical inflation in India:
Increased demand for healthcare services
One of the biggest reasons for medical inflation in India since 2022 is the higher demand for healthcare services. You can attribute the increased demand to the COVID-19 pandemic, long-term ailments, lifestyle changes, and the emergence of new diseases.
This is why healthcare providers are charging comparatively higher amounts for medical treatments and procedures. Along with rising demand, people’s willingness to pay more to avail of quality treatments is also a cause of rising healthcare prices.
Advancement in technology
Advancement in technology is a boon when it comes to the healthcare sector. Newer equipment, innovative treatments, and medicines are making it possible to treat diseases like cancer or cardiac ailments. However, all this comes at a higher cost, which leads to a substantial rise in overall healthcare prices.
Increased raw material costs
The rise in the prices of raw materials used in the medicine and healthcare equipment industry, along with higher import taxes and warehouse and freight costs, is also contributing to medical inflation rates in India.
Change in the unit cost of treatment and procedure
The change in the unit cost of a treatment or procedure directly impacts the cost per patient. The reasons behind the change include hospital consumables costs, hospital personnel costs, consultation costs, and other costs related to utilities, rent, or property.
Rise in medical tourism
Medical tourism is also a significant factor contributing to the rising medical inflation rate. India has emerged as a major hub of medical tourism in recent years. In fact, India is one of the top six medical value destinations across the world.
You can see more medical tourists coming to India for treatment of critical conditions like cancer or organ transplants. The overall demand for healthcare services in the country is thus increasing, which is contributing to medical inflation rates in India.