- Shweta Marathe
Over the last two decades, Public-Private Partnerships (PPPs) have become a common strategy by governments across India, for promoting access to healthcare by tapping into private across resources. While PPP projects are frequently announced in cities, little is known about how these partnerships actually function at the municipal level. How are decisions made? Who are the key actors? What systems are in place to ensure accountability and service delivery? At SATHI we conducted a study in 2023-24 to examine hospital-based PPPs for clinical and diagnostic services in secondary and tertiary public hospitals, based in two major cities of Maharashtra. This involved 25 in-depth interviews, facility mapping, some data from official municipal sources, and technical document review. Addressing a critical knowledge gap, this study has analysed public-private dynamics, decision-making processes, operational challenges, and the overall impact of PPPs on healthcare delivery in such large cities.
Key points regarding hospital-based PPPs in two large cities of Maharashtra
- Adoption of PPPs was widespread in both cities, covering various areas like complete handover of public hospitals or maternity homes to private agencies; outsourcing of laboratory, imaging or dialysis services; and contracting with private agencies for supply of ICU doctors.
- Several PPP facilities were found to be non-functional or underperforming, despite large public investments.
- The rates charged to patients under various hospital PPPs in these two corporations were found to be 2 to 25 times higher than rates for the same services provided by public hospitals in these cities.
- Free or subsidized services for vulnerable groups were often not provided or were poorly publicized.
- Unqualified staff and patient safety violations were reported, including numerous ICU deaths.
- Secondary outsourcing (meaning the private contracting body further sub-contracted responsibilities to another agency) and missing performance monitoring were common, accountability mechanisms were weak, with some MOUs lacking any basic standards and specifics about services.
- All the PPPs, whether involving for-profit or charitable actors, showed similar structural flaws.
- Overall municipal-level hospital PPPs appear to suffer from weak oversight and political interference. Public resources (land, buildings, utilities) were often being handed over to private operators on generous terms with minimal public benefit.
Here we present five striking case stories drawn from this study, offering insights into how hospital-based PPPs operate, where they falter, and what are their implications for public healthcare.
Case Story 1: Critical care or critical failure? – PPP for ICU services at tertiary care public hospital
In 2011–12, a municipal corporation invested ₹55 lakhs to set up an ICU in a tertiary public hospital, including purchase of expensive equipment and engaging five contractual doctors. However, the ICU never became functional and remained idle for nearly a decade. It was later handed over to a private consultancy firm—reportedly linked to a local corporator—under a 30-year PPP, despite the firm having no healthcare or ICU experience. All earlier equipment was scrapped, and new materials were procured again by the corporation for the private agency.
The PPP offered generous terms: rent-free use of the hospital’s first floor, free electricity and water, and new equipment. In return, the agency was to provide ICU services at 1% below CGHS rates. Yet costs have remained prohibitive: patients have to deposit over ₹40,000 and then pay ₹4,000–₹5,000 daily. Many are also forced to buy medicines at MRP from the ICU pharmacy, despite a Jan Aushadhi outlet offering cheaper alternatives on the hospital campus.
The facility has been staffed with part-time, on-call doctors—often homeopathy or ayurveda practitioners—rather than full-time qualified intensivists. The ICU manager, with only a basic degree, was a relative of the corporator associated with the project. Despite its promise of improving access to critical care, the ICU has admitted on average only around 40 patients per month. Most serious cases were referred to the city’s only large public hospital due to the lack of full-time, qualified staff—undermining the core objective of the PPP.
This case exposes how a PPP intended to expand critical care access, instead has enabled political favouritism and private interests. Despite generous public subsidies—free space, utilities, and equipment—the ICU has remained inaccessible to many due to high charges, underqualified staff, and inadequate care.
Case Story 2: A ₹50-Crore hospital, barely functional and engaged in further sub-contracting
In November 2022, under a 28-year PPP, the Municipal Corporation handed over a newly constructed multispecialty hospital—valued at ₹50 crores—to a private agency run by a healthcare trust. The 25,000 sq. ft. facility was provided rent-free, along with free utilities, tax exemptions, and most of the equipment.
Originally designed as a five-storey, 76-bed facility offering ICU, catheterisation lab, dialysis, CT scan, OPD, and emergency care, the project appeared promising on paper. It was inaugurated twice—first in February 2022 ahead of local elections, and again in December 2022. Yet, even two years after inauguration, most services remained non-functional. Basic facilities like X-ray and essential medicines were unavailable. The absence of antivenom tragically led to the death of a snakebite patient.
The hospital operates with only two full-time doctors and one or two nurses per shift. Most specialists were found to be unavailable or on-call only with prior appointments. The administrator was reportedly a 12th standard-pass relative of the corporator who had pushed for the PPP. Three major services—CT scan, pathology, and dialysis—were further subcontracted by the trust foundation to additional private agencies, further blurring responsibility and accountability.
Occupancy of the hospital has remained dismal- one IPD admission per week and just 4–5 OPD patients daily. Locals largely avoid the hospital, citing poor services and frequent referrals to other facilities. Although rates were set at 4.5% below CGHS norms, but with so few services available, cost was hardly the issue. The agreement allowed for performance reviews only once in every seven years. Many residents were unaware of the hospital’s existence until local activists demanded visible signage—which was installed only recently.
It is deeply troubling that while city’s only large public hospital is overwhelmed with patients, a well -equipped municipal hospital worth ₹50 crores remains nearly non-functional due to a PPP arrangement. This is not just inefficiency, but amounts to stark failure of the PPP model.
Case Story 3: Outsourcing diagnostics: Efficiency without accountability and equity?
In January 2018, the municipal corporation entered into a 10-year public-private partnership with a pan-India diagnostics chain known for aggressive expansion via government contracts. As part of the deal, the entire ground floor of a public maternity hospital was handed over to this diagnostics firm —for just ₹1 a year in rent. The main municipal hospital now operates from the rear building, quite literally pushed into the background. Electricity and water were also provided free under the PPP. On paper, this facility offers a full suite of diagnostics—MRI, CT, and pathology—at rates 6% below CGHS. The lab was staffed with 64 personnel including doctors, technicians, admin, and housekeeping, all appointed by the agency. Today, the centre handles around 400–600 pathology tests, 30 MRIs, and 15 CT scans daily.
But even this seemingly successful PPP has serious gaps. MRI and CT services remained non-functional for two years due to delayed electrical work by municipality, which highlights a breach of contractual obligations and a lack of accountability from both the corporation and the private agency. Grievance redressal systems were found to be only on paper. Despite MoU mandates, rate cards were not displayed in either hospital PPP; activists and journalists had to follow up for months to get them posted at the diagnostic centre. While middle class clients find the rates affordable as compared to market rates, the centre’s polished, the private-clinic appearance deters low-income patients who assume it’s unaffordable. Free services for groups like pregnant and lactating women, though promised in the MoU, were often not provided unless specifically requested. Generally, women were not aware or were afraid to ask for free services and hence were unable to avail these, revealing an equity gap in implementation.
While this PPP improved diagnostic infrastructure, it exposes serious gaps in accountability, transparency, and equity due to not displaying rates, inconsistent provision of free services and displacing the public hospital by taking over the prime front space of the premises, highlighting governance failures and continuation of inequities in access to care.
Case Story 4: PPP for ICU medical staff – underqualified doctors and numerous ICU deaths
In 2018, the Municipal Corporation signed a PPP worth ₹8.83 crore with a Charitable trust to supply intensivist doctors and nurses across six municipal hospitals. The two-year contract (May 2018–2020) was later extended further. But by mid-2023, the partnership collapsed. Following over 140 ICU deaths in nine months, investigations revealed that the trust had deployed underqualified personnel, including BAMS and BHMS doctors—some lacking even basic medical council registration. Also, a BHMS doctor was regularly impersonating a registered intensivist, issuing 32 death certificates under the other doctor’s name. An FIR was filed against the Trust’s trustees, and on June 2023 the contract was fully terminated.
A review of the MoU revealed no specific mention of mandatory staff qualifications or required skill sets, exposing a major regulatory gap. This case highlights the lack of effective oversight, real-time monitoring and enforceable quality standards in PPP healthcare models. While outsourcing might be resorted to for overcoming staffing shortages, patient safety must never be compromised.
This case reveals the major negative consequences of weak PPP oversight—over 140 ICU deaths, unqualified staff, and falsified records. It raises serious concerns about the quality and safety of care delivered through PPP models, highlighting the lack of transparent monitoring and effective accountability in PPP contracts.
Case Story 5: Clauses breached, contract terminated—yet re-selected- A case study of a maternity hospital handed over in PPP mode
From 2005 to 2015, the Municipal corporation partnered with a private agency through a PPP to run an entire maternity hospital with over 1108.5 sq. metres area. This was leased out for just ₹1 per month but the contract was terminated for serious violations. Instead of limiting itself to maternity care as per the MOU, the private agency converted the facility into a multispecialty hospital with commercially run orthopaedics, general surgery, oncology, and even cardiac surgery departments. The High Court eventually ordered the closure of all unauthorized departments. The agency also failed to pay ₹21.86 lakh in property tax and water charges during the entire contract period.
Despite these violations, the same agency has been re-selected in 2019, with a new contract awarded until 2034. Notably, the new agreement now permits the same multispecialty services that led to its earlier termination—raising serious concerns about the PPP selection process.
The MoU mandated 30% free maternity beds, 5% free NICU beds, and 40% beds to be provided under a government health insurance scheme. However, these key entitlements were not displayed at the hospital, reportedly patients were rarely admitted under these reserved beds, and the administrator refused to give any numbers or discuss it. A further major flaw noted during review of the agreement document was that instead of having an official oversight mechanism, the formation and operation of the Monitoring committee has been left to the same private agency!
This case reveals serious flaws in PPP design and oversight—where repeated violations, lack of accountability, and conflict of interests undermine public health goals and turn a public service into a commercial enterprise.
These case stories offer striking accounts of hospital-based PPPs in municipal settings, revealing systemic failures in related design, implementation, and oversight. A major policy issue relates to each municipal corporation’s unchecked autonomy for entering into privatisation-oriented agreements, with no involvement from the state health department. This opens up the risk of local political interference and weak oversight, especially given significant capacity gaps at the municipal level. Whether implemented by charitable trusts or for-profit entities, PPPs showed similar problems. From ICUs staffed by underqualified personnel compromising patient safety, further sub-contracting by private agencies, diagnostic centres with inequitable access, and the re-selection of agencies previously terminated for serious violations, to hospitals left underutilized or captured by political interests—the pattern is clear. Public resources are being routinely handed over with minimal accountability and little benefit to those most in need. In many instances, PPPs have become vehicles for private gain rather than public good, as even reflected in the mission statements of some private partners. Weak contracts, inadequate regulation, political interference, and commercial interests have together compromised the public health mandate of these partnerships. Unless comprehensive transparency, equity, and patient-centred accountability are ensured regarding PPPs, these will continue to fuel profit making and political interests, rather than ensuring public good.
(This blog is based on a study conducted by SATHI. The study team includes- Shweta Marathe, Deepali Yakkundi, Abhijit More and Dhananjay Kakade. You may see a recently published research paper based on this study – Marathe S, Yakkundi D, More A, Kakade D. Unpacking the politics and publicness of healthcare public-private partnerships: case studies from municipal hospitals in Maharashtra state, India. J Community Syst Health [Internet]. 2025 Jul. 23 [cited 2025 Jul. 30];2(1). Available from:https://journals.ub.umu.se/index.php/jcsh/article/view/1182)
