Why this matters
India’s private hospital sector is accelerating into a new era of transformation. Growth expectations remain high, but operators are facing complex trade-offs: balancing frontline staff shortages, rising clinical investment and digital transformation with evolving patient expectations and cost pressures. Our latest survey of 100 hospital executives across India reveals the new rules of the game in 2025.
What you’ll learn:
- Where investment is going, and why
- How hospitals are streamlining procurement and the impacts of localization
- Why digital is both a promise and a puzzle
1. India’s hospitals are bullish but cost-focused
Almost all private hospitals expect to post a budget surplus in the next three years, with private equity (PE)-owned facilities significantly more likely to report expected EBITDA margins above 20%-30%. Clinical staff salaries account for 37% of budgets today, and over 60% of respondents expect increases in this category, along with capital expenditure.
That said, out-of-pocket payments make up approximately 50% of private hospital revenue, with government funding contributing less than 5%, highlighting a system that still relies heavily on private direct payers.
2. Hospitals are actively rebalancing operations
India’s hospital executives are planning to expand key specialties such as bariatric surgery (52%), geriatrics (51%) and cosmetic surgery (50%). On the services side, investments are headed toward home-based long-term care (49%), laboratory services (46%) and outpatient clinics (45%). Strategically, staff shortages (37%) and new IT infrastructure (34%) top the priority list.
3. Procurement strategies are evolving; size and ownership matter
Hospitals are employing different standardization strategies depending on their size: large hospitals are reducing the number of SKUs per category, while smaller hospitals prefer consolidating spend with a single supplier per department. For PE-owned hospitals, 57% of respondents indicate medical consumables are the top target for standardization. For other private hospitals, the focus is on surgical instruments and off-patent drugs.
4. Purchasing dynamics require tailored go-to-market strategies
When buying from medtech companies, the most important criteria across all types of hospitals are cost (42%-62%), physician preference (39%-56%) and innovativeness (32%-48%). Across institution types, the CEO is the most influential buyer, especially for high-cost capital expenditures. However, procurement directors are the most important decision-makers for low-cost products and practicing physicians influence midtier purchases, especially in PE-owned hospitals. This underscores the need for tailored go-to-market approaches by product type and hospital size.
Local sourcing requirements are increasingly shaping purchasing behaviors, with approximately 45% of hospitals reporting restrictions on imported products in certain categories or mandates to purchase domestically manufactured products. The trend is especially pronounced in Delhi, where 60% of hospitals report restrictions on imports.
5. Digital health adoption is real but uneven
Hospital leaders across India believe digital tools will reduce medical errors (43%), boost staff efficiency (41%) and drive new revenue (41%). Yet digital health faces headwinds: Leaders worry about job replacement (33%), cite inadequate IT infrastructure (30%) and say budget constraints are a barrier (29%), particularly at large hospitals.
And hospitals with more-advanced electronic medical record (EMR) systems are more likely to participate in data-sharing platforms than are those with basic EMR systems.
09192025070906