Hospitals & Nursing Homes


India’s healthcare industry is growing at a rapid pace. Hospitals and nursing homes are integral part of the healthcare delivery system. Two of the most important drivers of growth have been fiscal tax benefits and increase in individual disposable income. The promise of affordable and quality healthcare has attracted significant medical tourism into India. The industry has witnessed significant consolidation in the recent past.

Most important laws

  • The Clinical Establishment Act, 2010 (and equivalent state-level legislations) set out basic quality standards and registration requirements for hospitals and nursing homes.
  • The Code of Ethics published by Medical Council of India and the Dental Council of India regulates doctor-patient and doctor-industry interaction.
  • The Consumer Protection Act, 1986 / the Consumer Protection Act, 2019 provides redressal to patients and their relatives from medical negligence through compensation.
  • The Water (Prevention and Control of Pollution) Act, 1984 lays down strict environmental compliance requirements for establishing and operating mid-size to large hospitals on the premise that these are highly polluting enterprises.
  • The Bio-Medical Waste Management Rules, 2016 lay down strict requirements for generation, collection, storage and disposal of biomedical waste.
  • The Transplantation of Human Organs and Tissues Act, 1994 prescribes conditions for organ donation and criminalizes sale of organs and tissues.
  • Most municipal laws prescribe additional conditions for operating a healthcare establishment.

Key things to Remember:

  • Indian government’s health assurance scheme covers secondary and tertiary treatment of economically weak citizens only.
  • There are restrictions on advertisement of doctors and clinics run by doctors, but there is no such restriction on advertisement by hospitals.
  • The electronic health records of patients should be maintained as per standards prescribed by the government of India.
  • A hospital that carelessly engages doctors who do not have registration with state or central medical council may lose its license to operate.
  • All medical records should be maintained for prescribed period of at least three years.
  • Hospitals require a license to operate a pharmacy at their premise.
  • Failure to take appropriate informed consent before a surgery or operation could itself become a ground for claiming compensation.
  • The negligence of a visiting doctor may be vicariously attributable to the hospital, even though the visiting doctor is not an employee of the hospital.
  • An anti-kickback law has been proposed to regulate kick-backs in form of referral fees given by hospitals to doctors.

Important sub-segments and related industries

  • Hospitals & Nursing Homes
  • Home care
  • Bio-medical waste disposal
  • Privacy & Data Protection
  • Electronic Health Records

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