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In the context of inadequate public spending on health care in India (0.9% of the GDP); government liberalized its policies in the form of subsidized lands and tax incentives, resulting in the mushrooming of private hospitals and clinics in India. Paradoxically, a robust framework was not developed for the regulation of these health care providers, resulting in disorganized health sector, inadequate financing models, and lack of prioritization of services, as well as a sub-optimal achievement of the Millennium Development Goals (MDG). We systematically reviewed the evidence base regarding regulation of private hospitals, applicability of private-public mix, state of health insurance and effective policy development for India, while seeking lessons on regulation of private health systems, from South African (a developing country) and Australian (a developed country) health care systems.