Governments all over the world are getting increasingly concerned about their ability to meet their social obligations in the health sector. The situation has become critical in light of rapidly increasing costs for medical care, aging population, lack of government funds, and so on, all of which threaten the quality of services delivered. The hospital managers are very concerned about the lack of hospital infrastructure and resources to provide a satisfactory level of service. Equally concerned are the government administrators who have limited financial resources to offer healthcare services at subsidized rates. In this paper, we first describe a set of critical problems faced by government hospitals in India based on a study of government hospitals in several states. We then discuss three successful IT enabled applications (telemedicine, egovernance, and BPR) to satisfactorily address some of these problems in government hospitals in India.