The article focuses on trends in health-seeking behaviour of people and choosing between government and private sources, reasons for not accessing health care and the cost of treatment by examining three rounds of NSS data on health care use and morbidity pattern during 1986–87, 1995–96 and 2004. With variation across states, treatment-seeking from public providers has declined and preference for private providers has increased over the period. Although overall health-seeking behaviour has improved for both males and females, a significant percentage of people, more in rural than urban areas, do not seek treatment due to lack of accessibility and consider that the illness is not serious enough to require treatment. The financial reason for not seeking treatment was also an important issue in rural areas. There has also been change in the cost of health care over time. While the health care cost has increased, the gap between the public and the private has reduced, owing to perhaps increased cost of treatment in public health facilities following the levying of user-fees and curtailing distribution of free medicine care. Practically all states reported decline in availability of free both out-patient and in-patient care. The article concludes with supporting the adaptation of innovative public-private partnership in health sector for various services realizing the limitations of the state provision of health, particularly in rural and remote areas, and the growing preference of consumers for private health providers. As effectiveness of public spending also depends on the choice of health interventions, target population and technical efficiency partnering with private health providers could work towards reducing the health inequalities in the country.