As India advances toward more inclusive and preventive models of healthcare, a closer look at the everyday medical spending patterns of salaried employees reveals a significant gap in coverage. Traditional health insurance policies have largely focused on hospitalisation, even though a substantial portion of healthcare occurs without admission to hospitals — through doctor consultations, diagnostic tests, and medication purchases. These outpatient (OPD) services are central to ongoing care, yet they often require individuals to pay out of pocket. Over time, these costs can accumulate, especially for middle-income corporate employees who may not qualify for public health programmes but still face recurring healthcare expenses. The result is often delayed or skipped medical care, leading to avoidable health complications and added financial strain. In this context, cashless OPD services are emerging as a practical, preventive, and inclusive solution that aligns well with India’s evolving healthcare priorities.
The growing burden of out-of-pocket expenses
India has recorded a steady decline in out-of-pocket expenditure (OOPE), dropping to 39.4 per cent of total health expenditure (THE) in 2021–22 from 48.8 per cent in 2017–18, driven by an increase in the government’s share of health spending to 48 per cent. This drop is in line with the government’s stated goal under the National Health Policy, 2017, to reduce OOPE to 35 per cent by the financial year 2025–26 (FY26). Public policy is increasingly focused on reducing financial barriers to healthcare. The National Health Policy 2017 sets a goal of increasing public health investment to 2.5 per cent of GDP by 2025 and aims to minimise catastrophic health spending.
While all this marks significant progress, the burden remains substantial, especially for those outside government health schemes. Corporate employees—particularly in the middle-income segment—often incur repeated expenses for doctor visits, lab tests, and medications. The lack of structured insurance support for such OPD services discourages regular check-ups and early diagnosis, often leading to more severe health issues and higher long-term costs.
According to the Comptroller and Auditor General (CAG) audit of the Central Government Health Scheme (CGHS), out of total claims settled between 2016 and 2021, 15.35 per cent were for OPD treatment, while the remaining 84.65 per cent were for inpatient treatment.
At the same time, the Insurance Regulatory and Development Authority of India (IRDAI) is encouraging insurers to develop more innovative and inclusive products. Guidelines that promote the inclusion of OPD services in insurance offerings are enabling more flexible and relevant coverage, especially for the working population.
Reflecting the importance of outpatient care, the Indian government has been actively promoting digital and cashless healthcare services, including the Ayushman Bharat initiative, which supports universal healthcare coverage encompassing OPD consultations and diagnostics. While this flagship initiative is not only geared toward low-income groups, it reflects a broader shift toward preventive and comprehensive care models.
Understanding OPD
Today, most outpatient care still follows a reimbursement model, where employees first pay out of pocket and then claim the amount later. This process comes with multiple challenges—the hassle of uploading bills, no negotiated discounts, and a system vulnerable to fraud, waste, and abuse. Moreover, since these transactions are not digitised in real time, it leads to gaps in medical data capture, limiting the ability to generate health insights or offer proactive interventions.
Cashless OPD allows employees to access outpatient healthcare without making upfront payments. Rather than reimbursing expenses later, the insurer directly settles bills with healthcare providers, eliminating paperwork and delays. These plans typically cover general and specialist consultations, diagnostics, minor procedures, and medicines from empanelled pharmacies. Unlike hospitalisation-only policies, cashless OPD addresses the more frequent, day-to-day medical needs of employees.
Benefits of cashless OPD for corporate employees
Incorporating cashless OPD into employer-sponsored health benefits brings wide-ranging advantages. Financially, it reduces immediate out-of-pocket spending on routine healthcare. This, in turn, encourages timely care and preventive check-ups, resulting in better long-term health outcomes.
Inpatient care (IPD), too, was once dominated by reimbursement, but the industry has steadily evolved towards cashless settlements. A significant push in this direction comes from the Insurance Regulatory and Development Authority of India (IRDAI), which has mandated that insurers move towards 100 per cent cashless claim settlement for health insurance. Outpatient services are to follow a similar trajectory. As digital adoption deepens—among both patients and providers–doctors, pharmacies, and diagnostic labs—the shift is expected to accelerate. The growing integration of digital platforms will play an important role in enabling faster access to cashless OPD services.
From a workplace perspective, access to prompt and consistent care helps lower absenteeism, enhance morale, and improve productivity. Digital-first platforms make it convenient for employees to book appointments, access prescriptions, and consult specialists—all within a single ecosystem. Beyond convenience, lowering recurring health expenses can also improve mental well-being, easing financial stress and supporting work-life balance. In India, corporate wellness initiatives are gaining momentum; companies with such programmes reported a 22 per cent increase in employee productivity and a 14 per cent decline in medical costs per employee.
Path forward: Making cashless OPD mainstream
To drive widespread adoption of cashless OPD, a multi-stakeholder approach is essential. Policymakers could introduce regulatory incentives for insurers offering OPD-inclusive group health plans. Additionally, providing tax benefits for employers who invest in employee OPD coverage could accelerate corporate adoption.
Insurers, especially those with digital capabilities, must focus on building user-friendly, integrated OPD platforms that are easy to navigate and scalable across locations. Extending access beyond metros into tier-2 and tier-3 cities will ensure wider impact and inclusivity.
There is also scope for public-private collaborations in this space. By aligning public health objectives with private sector efficiency, hybrid models can be created to offer OPD benefits to employees in underinsured sectors.
Cashless OPD services offer a forward-thinking approach to employee healthcare, bridging the gap between hospitalisation coverage and everyday medical needs. By reducing financial barriers, promoting preventive care, and supporting overall well-being, this model not only benefits employees but also strengthens the health and productivity of India’s workforce.
As the country’s healthcare and insurance landscape continues to evolve, integrating cashless OPD into employer health benefits is more than a business decision—it’s a public health priority. By coming together, corporations, insurers, and policymakers can empower employees to take charge of their health without being burdened by cost.