How to Start a Hospital in India

[Step-By-Step Guide]

  • How to Start a Hospital in India [Step-By-Step]

    • May 20, 2021
    • Posted By : edureamofficial
    • 0 Comment


    India is home to over 40000+ private hospitals with 1.18 million beds, 59,264 ICUs, and 29,631 ventilators.

    The USA with the world’s strongest economy has only 1,060.

    Does this make US Healthcare less capable than India’s?

    Let’s look at the Doctor-population ratio:

    • Doctor-population ratio in USA is 2.6 per 1,000 people
    • Doctor-population ratio in India is 1:1456 i.e less than 1 per 1000 people.

    WHO recommends a 1:1000 Doctor-population ratio.

    Going by these statistics, it is fair to say that India needs to produce more doctors to offer quality and affordable healthcare to its growing population.

    But there is no doubt that private hospitals have been an important pillar of support for India’s healthcare system. SO much so that India remains a popular destination for medical tourists for its low cost and high-quality urban health care system.

    If you are planning to start a private hospital to further strengthen healthcare delivery in India, this blog will guide you through all the necessary steps required to set up hospitals in India.

    But before we do that, let us remind you that starting a hospital is perhaps the most challenging task. This is because you have to account for many things concurrently.

    You have to plan the infrastructure and oversee all the development processes. And also pull up resources and technology to manage daily operations smoothly once you have started the hospital.

    For now, we will deal strictly with the prerequisites of starting a hospital in India. Here’s everything you need to know:

    Step1: Choose The Right Location


    You should choose the location for the hospital wisely. You will face little challenges if you are buying an existing facility. But while building a new hospital from scratch it’s imperative that you choose a location that’s well connected and will easily attract patients from the surrounding neighborhood.

    A location that is already home to some well-established and popular hospitals will present stiff competition right from the start.

    Step2: Be Sure About The Expertise


    You must be clear about the specialties, treatment, testing, and care you would be offering at your hospital. This will help you properly evaluate your capacity to deliver the desired services, as well as prevent your project from going over budget.

    Step3: Hospital Permits

    Now that you have the basic facilities and infrastructure in mind, let’s move towards the business end of things. Permits are the first among the many hurdles that you will encounter in the process of building your private hospital. And we won’t be lying if we say that getting a permit is going to be easy. It’s a stringent process!

    Nevertheless, once you acquire all the permits, it’s easier to put the rest of the pieces of the puzzle together. So what are the permits that you would need? Here’s a comprehensive list of each one of them. 

    • Land and Construction

    The land or property you choose to set-up in the hospital must be non-agricultural. Before starting the construction ensure that you have approvals from local authorities as well as the government. Building Permit and License is issued by the Municipality.

    If the hospital is owned by you then acquire the following certificates:

    1. Occupancy certificate.
    2. Completion certificate.
    3. Fire NOC

    If you have leased/ rented the building, then you will need a Lease deed/ rent agreement Also, do ensure that the owner has obtained the above-mentioned approvals for the building.


    • Water and Electricity

      Water requirements for hospitals may vary depending on a range of factors such as the total number of beds, facilities offered, the strength of staff, etc. Ideally, hospitals need 100 liters of water per bed each day.

      Since Hospitals run 24*7 it is equally important that you plan for power shortages beforehand. Depending on your requirements, acquire permission from the municipal authority for your water and electricity needs.

    • Sewage Disposal

      You will need permission from respective municipal and local authorities to set up a well-planned sewage drainage system.

      To ensure safety, you may have to set up tunnels and pipelines to dispose of the waste water and solids safely. Your planned drainage system must focus on avoiding any runoff directly to surface waters.

    • Biomedical Waste Disposal

      Efficient bio medical waste disposal is an essential element of any modern-day hospital. However, you need to ensure your solution is not harmful to people leaving close to the hospital.

      Furthermore, the solution would require space and additional machinery installations, particularly incinerators, which would require permission letters from local authorities.

    • Fire-Safety and Health Certificate

      Fires-safety remains a top priority for any hospital. Proper fire-safety measures are a must to mitigate the smallest of threats any undesirable event could cause to the lives of patients, visitors, or health care workers.

      Hence, you need to apply for a fire-safety license or a NOC from the local fire department. It will win the trust of the patients as well as the people working at the hospital.

      Furthermore, you will also have to acquire a health care certificate following the installation of beds and equipment. To apply visit the state health department or the designated authority.


    Step4: Prepare A Roadmap for Hospitals Infrastructure


    Building a hospital is a huge investment both in terms of money and time. Hence, it’s important to have a well-documented roadmap covering every step of the process.

    Without a proper roadmap, it would be difficult to meet deadlines as well as take care of all the other essential factors such as:

    • On-boarding the best and the most qualified doctors.
    • Hiring well-trained nurses and other management staff
    • On-time procurement of medical equipment and instruments
    • Setting up an efficient technology infrastructure such as CCTV installations, computer systems, etc.
    • Vehicle registration for ambulances
    • Creating an HMS or Hospital Management System for managing all the functioning of the hospital with a unified 360-degree view of all the information and processes.
    • Hiring an in-house team of engineers and staff required for maintenance, plumbing, air conditioning, medical gas pipelines, etc


    Step5: Registration and Licenses


    Last but not least, a hospital must be registered under Multiple medical laws along with ethics. While some acts may not be applicable as the hospital may not have those treatment facilities that are covered under the act, nevertheless most of the acts are mandatory by nature. Here’s a brief overview of some of the primary ones: 

    Registration Under The Clinical Establishment Act, 2017:
    The act has provisions for registration and regulation of all clinical establishments in the country. It  ensures that all establishments meet the minimum standards of facilities and services provided by them. 

    Whether you are a small clinic or a multi-specialty hospital, registration under the clinical establishment act is a must.

    Registration Under Companies Act, 2013:
    The act simply classifies clinical establishments as private or public. It also provides for a regulatory environment based on such classification

    Registration Under Societies Registration Act, 2001:
    The society registration act is applicable when the hospital’s ownership is not limited to a particular firm but a society.

    Registration for Pharmacy within Hospital Premises:
    If you have a standalone medical shop within the hospital premise or at a space attached to the hospital, you need to register at the Office of the Drug Controller. You must also present requirements for the Air conditioner and Refrigerator. The license is valid for 5 years.

    Other Key Licenses Required: 

    • License for the Blood Bank (To be displayed in the Blood Bank)
    • Narcotics and Psychotropic substances Act, 1985
    • Dentist Regulations, 1976
    • Indian Nursing Council Act 1947
    • Indian Lunacy Act, 1912 (If a Psychiatry dept is there in the hospital)
    • Guardians and Wards Act, 1890
    • Fatal Accidents Act 1855
    • Minimum wages act, 1948 (For contract employees)
    • ESI Act, 1948 (For contract employees)
    • Registration of Births and Deaths Act, 1969
    • Urban Land Act, 1976
    • Right to Information Act 2005

    In addition to the above, you will have to maintain records too. This should include:

    1. Employment record of Doctors, nurses, and medical staff
    2. Medical records of patients treated (IMC Regulations 2002).
    3. Data of Medical certificates issued to patients.
    4. Register of medico-legal cases (MLCs).
    5. Indian Medical Councils (IMCs) Registration certificates of doctors/nurses/pharmacists
    6. Qualification record (degrees/diplomas) of the staff.
    7. Account of money receipts and expenses (Income Tax Act, 1961).


    Concluding Words


    Setting up a private hospital in India will require a stupendous effort on the part of the owner. With so much planning and investment involved, it is not always possible to manage every moving part efficiently. That is why it’s wise to consult a legal expert, or hire the services of a Legal Compliance Management Company. They will work as your extended arm and meet all basic compliance’s in a smooth and hassle-free manner.



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