There is a particular sentence that has become almost routine in the lives of people seeking serious medical treatment: “You have been referred.” Sometimes it is said by a doctor, sometimes by a hospital counter, sometimes by someone standing outside an emergency ward.
There is no cruelty in the sentence by itself. A patient may genuinely need a facility or a specialist that another hospital does not have. Referral is part of medicine. But what happens when the referral is not an occasional medical necessity but becomes the expected route for a citizen seeking treatment? What happens when the public hospital says there is no bed, no particular diagnostic facility, no specialist, no equipment or no capacity for the procedure, and the next destination is a private hospital? At that point, is the citizen really making a choice, or has the State quietly moved the citizen from one system to another?
Bhubaneswar makes this question particularly interesting. The city became the capital of Odisha on 13th April, 1948. At that time it was still a very small town; the 1951 Census recorded its population at just 16,512. By 2011, the population had risen to 8,43,402. A recent study of the city’s urban expansion, drawing on Bhubaneswar Development Authority data, puts the present population at around 12.48 lakh, while other current estimates put the city at around 12.66 lakh and the metropolitan region at around 13.32 lakh. The exact present number is necessarily an estimate because the 2021 Census was postponed, but there is little ambiguity about the direction of the change: a city that had a few thousand people when it became the capital has become a city of more than a million.
And what did the city have in terms of public healthcare when that transformation began? Capital Hospital was started in 1954 with only 60 beds. The hospital’s own history records that it has since expanded to more than 750 beds and now serves not merely Bhubaneswar, but patients from Khorda, Nayagada, Puri and adjoining areas, estimating its catchment at 10-12 lakh people. The expansion of Capital Hospital is itself an achievement and should not be dismissed.
But there is something worth pausing over. The hospital that began with 60 beds for a new capital has remained the principal large public hospital at the heart of that capital, even as the city around it has multiplied many times over and its healthcare needs have become far more sophisticated. The question is not whether Capital Hospital has grown. The question is whether public healthcare capacity has grown fast enough, broadly enough and deeply enough alongside the city.
The numbers in the State’s health budget tell another part of the story. Odisha’s Economic Survey recorded a state health budget of Rs 3,882 crore in 2015-16, rising from Rs 1,517 crore in 2010-11. By 2018-19, it had reached Rs 6,561 crore. In the 2025-26 budget, the allocation for Health and Family Welfare was Rs 22,909 crore.
In nominal terms, that is a very substantial increase from a decade earlier. But a budget number by itself tells us very little about the infrastructure it creates. A large health budget can pay salaries, medicines, insurance claims, programmes, subsidies, public-health interventions and administration. It can also build hospitals and buy equipment. The interesting question, therefore, is not whether the state spends more on health than it did ten years ago. Of course it does. The question is what proportion of that increasing expenditure has translated into permanent public capacity — beds, ICUs, operating theatres, diagnostics, specialists and tertiary-care hospitals — particularly in a capital city whose population and catchment have expanded so dramatically.
This becomes even more interesting when we look at what has happened outside the traditional government system. Bhubaneswar today has a substantial private healthcare ecosystem. The state’s own empanelled-hospital list includes Kalinga Hospitals, Aditya Care, Apollo, KIMS, Hi-Tech, IMS & SUM and several other private institutions in Bhubaneswar. Under BSKY, by November 2023, 610 private hospitals from Odisha and 155 super-speciality hospitals outside the state had been brought into the government’s healthcare network, taking the total number of empanelled hospitals to 765.
This is not necessarily evidence of failure. It can equally be seen as a practical recognition that the private sector possesses infrastructure which the government can use to extend healthcare access. But there is a larger policy question hidden inside that arrangement: when public money is repeatedly used to purchase healthcare from private capacity, does that eventually become a substitute for creating more public capacity?
AIIMS Bhubaneswar is an important part of this story, but it also needs to be placed correctly. It was established under the Pradhan Mantri Swasthya Suraksha Yojana as one of six new AIIMS projects of the Union government, with an estimated cost of Rs 840 crore at the time. The AIIMS itself records that the project was a PMSSY project funded under the 12th Five-Year Plan. Its presence has unquestionably strengthened the city’s healthcare infrastructure. But AIIMS cannot really be used as evidence that the Odisha government solved the problem of tertiary public healthcare in its capital. It was a national project, funded and established through the Union government’s programme. The question of what the state itself built remains.
And this is perhaps where the word ‘referred’ deserves a second look. A citizen arrives at a government hospital because that is where the state provides healthcare. The citizen has not necessarily chosen a private hospital. If the government hospital then says, “We do not have the facility,” and sends the patient elsewhere, the citizen enters the private market carrying a referral slip (at times and most times not).
The private hospital may be perfectly legitimate in charging for its services; it has invested its own money, employs doctors and nurses and has equipment and infrastructure to maintain. But the citizen’s position is different. The citizen may have reached that private hospital not because it was the preferred option but because the public system did not have the capacity to provide what was required. The distinction may appear small, but economically it is enormous. A market works differently when the customer voluntarily chooses to enter it and when the customer enters it because the alternative is unavailable.
This is also where government-funded health insurance becomes an intriguing part of the equation. Odisha has invested heavily in schemes designed to protect citizens from out-of-pocket expenditure, and BSKY/GJAY has brought private hospitals into the delivery of publicly financed healthcare. The State has also required its officials to scrutinise bills raised by empanelled hospitals. In November 2023, when the number of empanelled hospitals reached 765, the Health Secretary specifically directed officials to scrutinise treatment bills raised by hospitals before payment.
The arrangement undoubtedly gives citizens access to treatment that they might otherwise be unable to afford. But one can still ask a simple question: if public money is continuously being used to purchase treatment from private hospitals, at what point does it become economically and administratively sensible to use some of that same public investment to create additional public hospitals of comparable capability?
Perhaps the most uncomfortable part of this question is that there is no obvious villain. Private hospitals are not wrong for investing. Doctors are not wrong for earning. Patients are not wrong for demanding the best treatment. Governments are not wrong for using private capacity when it is immediately available. Insurance is not wrong for paying for treatment. And yet, somewhere within this perfectly understandable arrangement, a citizen can still find himself standing outside a government hospital with a referral slip in his hand, trying to arrange money for a private hospital. That citizen may have a government health card. He may have paid taxes. He may have spent his entire working life believing that the state provides a basic safety net for illness. Yet at the moment of greatest vulnerability, the safety net may appear to him as a direction board pointing somewhere else.
Bhubaneswar has grown. From population figures, hospital beds, budgetary allocations, insurance cover to establishment of many private hospitals and allied services. More money is unquestionably being spent and more healthcare is unquestionably available than ever before. Yet the question remains, perhaps deliberately unanswered: has the public healthcare system grown at the same pace as the citizen’s need for it, or have we simply become better at referring the citizen elsewhere?
Perhaps that is what the referral slip (or at most times a verbal referral) really represents. Not a failure of one doctor, one hospital or one government, but a much larger choice about what kind of healthcare system a state wants to build. A system in which the government provides healthcare directly. A system in which the government buys healthcare from private providers. Or a system somewhere between the two. The citizen may not have an answer. But perhaps the citizen should at least have the right to ask why, after all these years and all this expenditure, the final destination of the residents of Bhubaneswar is an utterly under capacitated Capital Hospital serving the growing population of Bhubaneswar or at the door step of a Private Hospital.
Perhaps, the referral slip is the only legitimate document which catapults us instantly from a lesser Citizen to a Customer of value.
