Reforming the medical sector in India is going to be a very tricky business, and there are areas Shiv ji has not even touched which can be serious spanners in the wheel of any reform.
We can divide up the system into three essential components from the service side :
(1) the medical professional
(2) the infrastructure for providing service
(3) material input, production and supply
We have typically looked at (1) either from the purely economic angle, or from political angle, and sometimes from so-called ethical angles. But my personal impression has been that we may need to change that view towards a "social investment" one, and see it in the context of developing "sustainable and self-sufficient communities".
I would coin the abbreviation MP for this post only - meaning "Medical Professional". A MP can lie at various points on a spectrum of skill and specialization, and includes those usually called "nurse", "paramedics", "medical technician", and "doctors". The problem of creating MP's appropriate for the population is micro-reflection of the overall vision problems for the society. In spite of various policy declarations, the basic task of creation of MP's has been left in the hands of market forces, and has not been looked at from the "national and social investment" angle. MP's should be treated as a national and social investment for national and social future. This does mean a degree of intervention in the market forces.
If all of this is left to the market, MP production will be geared towards pure monetary profit. People with money would buy seats for training. Medical schools will auction training slots. Investments will pour in where there is proven record of profits, and therefore already having huge investments. This automatically leads to concentration of production facilities at well known urban centres, and is intricately linked to similar high-investment and capital-intensive infrastructure. This will in turn lead to intensive profit seeking from the MP's once they graduate.
One way of trying to change this is to think of a National Health Service of India. The NHSI will have a "social contract" and have preferential and legal rights to intervene in (2) and (3). It should have a charter of service to be given to citizens, and in return a guarantee of a minimal proportion of the GNP. It should be subject to supervision and audit by an independent autonomous body of a mixture of experts and professionals as well as with direct or indirect electoral representation (e.g. Parliamentarians+Scientists+retired MP's+economists+non-national experts).
NHSI should
(1) formulate policies for producing MP's, project future needs and set quotas accordingly (it should not be that difficult to estimate needs at the beginning of training programme as to what the demand for MPS's will be at the end of the programme).
(2) Students should be selected strictly by an aptitude test and all tarining costs to be maintained by the NHSI. They should also be paid a maintenance stipend and any residential support needed. In return, students will be under contract to NHSI to take up service with NHSI. There can be povisions for future changes in contract and compensation as and when qualifications or circumstances change.
(3) training should be adequate with a minimal foundational training that qualifies all in the programme to be able to perform a minimal agreed set of services (say at the level of a fully qualified nurse under current practice), and with exit routes at a small number of various levels after that foundational qualification.
(4) the minimal training must take into account public health perspectives, a national "health vision", and indigenous techniques and medical knowledge with a systematic and non-hostile exposure to alternatives to allopathy. (Shiv ji must be aware of the deep seated bias against the alternatives within the training system, as well as inherent difficulties in aligning the basic attitudes/theories in the alternative forms with those of modern physiological and biochemical research).
(5) Part of the training should be distributed away from established urban centres to newly developed or developing centres on a rotational basis. This is linked to another aspect of NHSI that has to be discussed under infrastructure.
Infrastructure
(6) The whole country should be divided up into medical districts where, NHSI must provide a minimal number of MP's per unit chunk of population, with corresponding infrastructure.
(7) Infrastructure has to be based on distance and accessibility from individual to service provider. This would necessarily concentrate the upper levels of specialization pyramid at smaller number of centres with the lower tier distributed in larger numbers in awide dispersal method. The centres of increasing specialization should not necessarily c)oincide with existing large urban sprawls - but more on coverage. Each centre should be able to digitally connect to larger centres immediately and have image or live audio-visual transfer capabilities - so that the "triage" system can work up from the remotest "outpost".
(8) NHSI will have its own labour laws that recognizes right to negotiate on the part of employees through organized or individual channels, but will not recognize industrial action as a right. Health should be declared a special category service exempt from ordinary labour laws. Administration must have the right to take action on spot for dereliction of duty or insubordination which can only be challenged in special tribunals and not through the regular legal system (at least until RM's proposed reforms seem to work!)
(9) NHSI should have its own security service, and MP's should be able to avail of such security services (tempted to consider RM's proposal for right to carry firearms for MP's

)
(10) MP's should be prepared to be posted anywhere within the system, commensurate with their qualifications and experience. In return, NHSI will provide all supporting infrastructure for the MP and dependents.
(11) The guaranteed support of portion of GNP should be balanced by a NHSI run national health insurance, compulsory for all citizens. This must contain incentives towards smaller families, and adoption of proven health enhancing practices.
(12) NHSI should have rights to set and intervene in public health programmes and infrastructure development.
The trickiest part is the "material input" bit and the greatest source of corruption and market greed. My experience says that one of the greatest obstacles to reform will come from this sector. NHSI should have its own pharmaceuticals and medical supplies production facilities as well as unified supervised medical waste disposal. The GOI should also setup multiple competing independent public limited pharmaceuticals who will have binding contracts to provide preferential supplies to NHSI and NHSI should hold a significant interest in their stocks. These production facilities hsould be distribued around the country and allowed to compete with each over marketing their surplus (after satisfying NHSI demands).