Investigated & reported by Atash Kulkarni firstname.lastname@example.org
The Indian Health Care Sector is one of the fastest growing sectors in comparison with other nations. At terrific pace of ~17% CAGR, it is expected to reach US$ 280bn by 2026. T
Indian healthcare market is worth around US$ 100 billion and is expected to grow to US$ 280 billion by 2020
The United Nations has projected that India’s population will reach 1.45bn by 2028, making it the world’s most populous nation, surpassing China. Further, India will also face the challenge of 168 million people in the geriatric age group by 2026.
Moreover, Indian healthcare sector is the fifth largest employer among all sectors, both in terms of direct and indirect employment. The sector offers direct employment to nearly 5 million citizens in India, which is expected to grow to 7.5 million by 2022. With a shift in focus towards quality of service, particularly with the rising demand for tertiary and qua-ternary care, the industry requires specialized and highly skilled resource. All these are going to make the healthcare sector very attractive in the near future.
The major factors that are contributing to the growth of this sector are:
- Heavy investment by private players
- Increase in the number of educational institutions
- A wide inflow of information and technology from developed countries
- A surprising increase in the cases of lifestyle-related diseases.
Present Healthcare Scenario in India
Medical discrepancies between Urban and Rural India-
There is huge inconsistency in the distribution of healthcare services across the country and is a major concern which needs to be addressed. The existing infrastructure in the rural areas does not make it conducive for quality healthcare to sustain, causing inadequacies in meeting the ever-growing needs of a major portion of the Indian population. Moreover, there is poor penetration of hospitals in the rural areas which accounts for 67.0% of the total Indian Population. The urban areas on the other hand, which account for a smaller proportion of the population, have been enjoying better availability of healthcare infrastructure.
Lack of Proper Government Initiative-
In India, the under-development of healthcare infrastructure is largely attributed to under investment by the public sector. India lags far behind as far as healthcare spending is concerned in comparison to the global average. In India, healthcare spends as a percent of total GDP stand at 3.8% as compared to the global average of 8.6%.The per capital healthcare expenditure in India stands at $58 as compared to $1,025 which is the global average.
In terms of availability of medical staff,
|No of Doctors /10000 Population||13.9||7|
|No of Nurses /10000 Population||28.6||17.1|
|No of Beds /10000 Population||27||7|
The relatively lower penetration of Medical Insurance has resulted in high out-of-pocket health expenditure at 86% as compared to 52% which is the norm globally. The Country will need to add 3.6mn beds over the 2 next decades to address the existing as well as the growth in population. Secondly, Indian people expenditure in healthcare is one of the lowest in the world (Approximately 4.0% as compared to 17.1% in the USA, 9.7% in Brazil, 9.1% in United Kingdom and 5.6% in China.
None-the-less, the private healthcare sector in India, is gearing up to match global healthcare delivery models. The growth of the private sector is expected to continue going forward. They possess technical and managerial skills, and are innovative and flexible in the deployment of resources. They are perceived to provide personalized quality services with greater efficiency than public hospitals. As per the CRISIL, the size of the Indian healthcare delivery industry in 2015 is estimated at 3.8tn which translates into over 3,400 million procedures and treatments. The efficiency and results of the private sector has also given an invitation to FDI in the Healthcare sector. The share of healthcare FDI has almostdoubled since 2011 – from 0.7% in 2011 to 1.21% in 2015.
The private healthcare sector is expected to grow consistently with support of macro-economic policies that recognize the healthcare sector as an industry and provides for stimulus to private sector investment through tax concessions. Additionally, the willingness of the people to pay for health services, along with support from the government aimed at De-bottlenecking the sector will add impetus to the growth of the private sector.
As of 2016, there are 420 medical colleges in India where qualifications are recognised by the Medical Council of India; these medical schools have a combined capacity to provide medical education for 54,145 students. The Medical Council of India’s motto is to provide quality medical care to all Indians through promotion and maintenance of excellence in medical education.
Having seen the private sector deliver outstanding results with limited resources, the bar has been raised for standards of healthcare for citizens of the country. The public sector has recalibrated its focus and accelerated its efforts towards the sector. The Government of India in the 12th five-year plan (2012-17) has focused on providing universal healthcare, strengthening healthcare infrastructure, promoting R&D and enacting strong regulations for the healthcare sector.
The NITI (National Institution for Transforming India) Aayog has allocated $55 billion under the 12th Five-Year Plan to the Ministry of Health and Family Welfare, which is about three times the actual expenditure under the 11th Five-Year Plan. There have been endeavours to leverage private sector efficiencies and capacities through the Public Private Partnerships (PPPs) model.
As of 2013, government spending on healthcare in proportion to total spending on healthcare was only 32.2%. Demand for NCD related healthcare services to increase over the next 5 years
Further, to improve access to cheaper medicines, the Central Government plan to open 3,000 Jan Aushadhi stores offering affordable generic medicines. This is a sharp increase from the current tally of 137 such stores in 19 states
Provisions made in the Union budget 2016-17:
- National Dialysis Services Program to be initiated to provide dialysis services in all district hospitals to accommodate the increasing demand for dialysis.
- A new health protection scheme for health cover of up to 1 lakh (US$ 1,470) per family.
- Setting up of 3,000 medical stores across the country to provide quality medicines at affordable prices.
- Senior citizens will get an additional healthcare cover of ` 30,000 (US$ 441) under the new scheme.
- PradhanMantri Jan AushadhiYojana to be strengthened, 3000 generic drug stores to be opened.
Today, the private healthcare sector in India has evolved into a vibrant industry accounting for around 70% of the country’s total healthcare expenditure. Large investments by the private sector players are likely to contribute significantly to the development of the sector which is poised to reach $280 billion by 2020, witnessing a compounded annual growth rate (CAGR) of 22.9 per cent during 2015-20. This is mainly due to the prevalence of favourable dynamics which are expected to sustain the demand for healthcare.
Lifestyle-related, non-communicable illnesses exhibit a tendency to increase in tandem with rising income levels. Rising income levels and increasing insurance penetration are major contributing factors for the rise in patients accessing private healthcare services. Growth in India’s urban population, rise in elderly population and increase of lifestyle diseases will further propel growth of the industry.
Superior quality healthcare, coupled with low treatment costs in comparison to other countries, is benefiting Indian medical tourism which has, in turn, enhanced the prospects of the Indian healthcare market. Treatment costs for major surgeries in India are approximately 20 per cent of that in developed countries.
As per a recent KPMG Report, the size of the medical tourism market was estimated to be around $3.6 billion in 2015 which is expected to reach $10.6 billion by 2019 representing a CAGR of 30%.
Medical tourism, is being considered as India’s next crown jewel. Rising costs of healthcare in the developed world, along with rising disposable income and healthcare awareness among the global population, is forcing patients to explore cheaper options in other countries. However, to emerge as a top medical value travel destination, India needs to focus on quality of services and increase transparency and accountability in every aspect of healthcare delivery. The government has introduced a separate category of medical visa: M-visa which can be extended for an additional 12 months beyond the one year issue period. A faster clearance process has been initiated for medical tourists at the airports.
Almost all the healthcare diagnostic service providers in India offer a wide range of diagnostic tests and services. The industry can be classified into imaging diagnostics and pathology/lab medicine testing services.
Today, preventive and wellness test packages are being offered and marketed by almost all the large diagnostic chains and hospital-based diagnostic centres. These health packages help to screen and identify pre-existing diseases or the likely risk of some diseases before the onset of actual symptoms. This is expected to help people take corrective action before any chronic conditions take hold.
The overall market for wellness and preventive diagnostics was estimated at 6%-8% of the total diagnostic services market in 2014-2015. Rising literacy levels are expected to increase awareness of preventive and curative healthcare and, in turn, boost the demand for diagnostic services. This segment is expected to grow at a robust CAGR of 23%-25% over the next three years as diagnostic chains push for higher growth through this segment because it improves their capacity utilization. In value terms, the preventive and wellness segment of the diagnostic industry market is estimated to grow from 26.4 billion in 2014-2015 to 48 billion in 2017-2018.
Part 2 Major Healthcare Players in India.