India's citizens have become much healthier since the country's independence, almost 60 years ago, thanks largely to public-health efforts that have nearly doubled life expectancy while halving infant mortality rates. The public-health system has eradicated smallpox and guinea worm and drastically reduced cases of leprosy, malaria, and polio (Exhibit 1).

But India still trails its Asian neighbors on key measures such as life expectancy, and its public-health challenges are growing. India has 5.1 million HIV/AIDS cases—the second highest of any nation in the world. Diseases such as diabetes and cancer are on the rise as people live longer and more affluent lives. Some communicable diseases (such as dengue fever) once thought to be under control have resurfaced.

If India is to continue improving the health of its citizens in the face of ongoing and new challenges, its government must address the fundamental deficiencies of the public-health system rather than merely create more infrastructure to treat sick people. The country already has a strong public-health infrastructure, but public hospitals and clinics are understaffed by 15 to 20 percent, on average (Exhibit 2)—and in rural areas by even...