Private hospitals have opposed a Parliamentary panel’s recommendation to cap room charges at three-star hotel rates, citing rising costs, investment needs and healthcare infrastructure requirements.
Private hospitals are pushing back against a Parliamentary panel’s call to end room-rent-linked treatment pricing, saying it overlooks the high costs of running hospitals and could discourage investment. The defence comes as major hospital chains report strong growth and healthy profits, raising questions over whether concerns about costs and investment are fully reflected in their financial performance.The Parliamentary Standing Committee on Health and Family Welfare recently recommended that private hospitals rationalise room charges. It suggested that room charges should not exceed the average tariff of three-star hotels in the hospital’s vicinity.Hospitals defend pricing modelApollo Hospitals Managing Director Suneeta Reddy defended the company’s pricing as “fair and transparent”, saying price controls could discourage investment in capacity and innovation. Asked about Apollo’s 8 per cent rise in average revenue per admission in a quarterly earnings call, partly driven by a 4 per cent price increase, Reddy said the company had no plans to change its approach. She said price increases reflected inflation and rising service costs.Dharminder Nagar, MD of Paras Healthcare, told businessline that the panel’s recommendation was based on a “flawed” comparison between hospitals and hotels. “Hospitals are not hotels. We don’t do the same services,” he said, adding that room charges included several costs associated with patient care.Siddhartha Bhattacharya, Secretary General of Nathealth, said affordability should be assessed by examining the underlying costs of healthcare delivery. He cited land, capital, manpower, regulatory compliance, medical equipment and working capital as major costs.Fortis MD and CEO Ashutosh Raghuvanshi said affordability could be addressed through zero-rating GST on healthcare, lower duties on medical equipment, stronger insurance coverage and better access to long-term capital. “A consultative and predictable regulatory framework is essential,” he said.Hospital chains report strong profitsThese assertions are despite hospital chains reporting strong profitability. Apollo’s consolidated net profit rose from ₹136 crore in FY21 to ₹1,505 crore in FY25. It reported PAT of ₹1,493 crore in FY26, while Q1 FY27 PAT rose 34 per cent to ₹581 crore.Fortis Healthcare reported a profit of ₹789.95 crore in FY22, ₹632.98 crore in FY23, ₹645.22 crore in FY24 and ₹809.38 crore in FY25 after a loss in FY21. Max Healthcare’s PAT rose from ₹331 crore in FY22 to about ₹1,631 crore in FY26 with cumulative profits of about ₹5,716 crore.Published on August 20, 2026
