India’s healthcare system stands at a critical inflection point, where the challenge is not only to scale care delivery but to do so affordably, sustainably, and with measurable outcomes. According to Sandhya Sriram, Group CFO of Narayana Health, the future of healthcare economics lies in shifting away from volume-led growth to value-based, outcome-driven models powered by technology, governance, and financial discipline.
In a recent interaction with Priyanka R, Copywriter at siliconindia, Sandhya Sriram shared insights on how India can redesign healthcare economics to ensure long-term growth without compromising affordability or quality.
Moving Beyond Capacity Expansion to Asset Optimisation
India is globally recognised for delivering high-volume, high-quality care at relatively low cost. However, maintaining this advantage requires a fundamental shift in how hospitals grow. Rather than focusing solely on expansion through new infrastructure, healthcare providers must maximise the value of existing assets.
This can be achieved by:
- Leveraging technology to enhance clinical efficiency
- Streamlining processes and standardising care delivery
- Increasing patient throughput without proportional capacity addition
By improving productivity and operational efficiency, hospitals can unlock growth while keeping costs under control.
Integrating Prevention, Financing, and Care Delivery
For healthcare to remain affordable, it must span the entire continuum from prevention and wellness to financing and insurance-backed care models. Smarter care delivery enabled by digital intelligence, predictable costing, and robust processes helps build trust and ensures early intervention.
Such integration shifts healthcare from episodic treatment to a long-term, sustainable system that rewards prevention, early diagnosis, and continuity of care while remaining financially resilient.
Measuring Outcomes and Strengthening Accountability
A transition from volume-based to outcome-based healthcare demands strong governance and measurable accountability. At Narayana Health, quality is embedded into the organisation’s operating framework rather than treated as a compliance exercise.
Key elements include:
- Standardised clinical protocols and safety practices
- Data-driven reporting and continuous monitoring
- Clear accountability across clinical and administrative functions
Outcomes are tracked through clinical indicators, process adherence, and patient experience metrics. When performance-based financial models reward quality instead of activity, patient value and sustainability align naturally.
Cost Optimisation in Resource-Intensive Specialties
Specialties such as cardiology and oncology involve long treatment cycles and high resource consumption, making cost control essential. Predictable pricing models built on historical data and bundled care packages can reduce financial uncertainty for patients.
Affordability can be further improved through:
- Flexible payment plans
- Insurance partnerships
- Institutional financial support mechanisms
These approaches ensure patients are protected from catastrophic healthcare expenses while maintaining provider sustainability.
Making Cross-Subsidisation Smarter and Sustainable
Cross-subsidisation has long been a tool for balancing affordability, but it must now evolve into a strategic, data-driven approach. Efficient operations, improved asset utilisation, and digital workflows can free up resources that allow hospitals to subsidise care for underserved segments without compromising financial health.
As payer ecosystems evolve with expanding insurance coverage and government initiatives—hospitals must continuously adapt to build equitable, resilient, and responsive care models.
Leveraging Technology to Transform Healthcare Operations
Rising operational and staffing costs are pushing hospitals to adopt technology-led efficiencies across clinical and administrative functions. Digital platforms for electronic medical records (EMRs), inventory management, billing, and workforce coordination can significantly reduce turnaround times and operating expenses.
Advanced analytics and predictive tools enable:
- Better resource planning
- Reduced variability in care delivery
- Higher throughput with improved safety
By placing technology at the core of operations, healthcare providers can build lean, scalable, and standardised care models that balance quality with financial sustainability.
Toward an Integrated, Outcome-Based Healthcare System
Traditional healthcare revenue models often create misalignment between payers, providers, and patients. The future lies in integrated care and proactive health management, where payment systems reward positive outcomes rather than volume.
Investing in prevention and upstream care reduces dependence on expensive interventions, improves population health, and builds trust. When outcomes, financing, and care delivery move in sync, healthcare transforms into a system that keeps people healthy—while remaining accessible, transparent, and economically sustainable.
