Healthcare

Healthcare, in itself, is a high-cost sector for both end-users and providers, billing at an average of 10.5% of GDP on a global basis. (World Healthcare Outlook, Economist Intelligence Unit). The costs support several ancillary industries, be it pharmaceuticals on one end or the health insurance segment on the other.

 

Rise in population (currently pegged at 1,261,527,930) and increasing life expectancy underline the high domestic demand for healthcare services. Even though universal healthcare system is run at both the centre and state levels, mistrust, low quality services and less penetration in rural regions, have helped establish a supportive private healthcare network. Currently 70% of those in urban areas and 63% of those in rural regions prefer to access private healthcare services.

 

Currently, India stands at a cross-road of high-end, multi-specialty private healthcare services on one end and lack of doctors, support staff, medicines and facilities at the other.  High-end facilities and education platforms are concentrated near metropolitan centres (World Health Organisation in its 2012 report said that only 26% of healthcare professionals were available to address the needs of 72% of the country’s population).

 

Scope of growth

 

Considering the demand given above, the domestic healthcare sector is expected to rise to $100 billion by 2015, according to the India Brand Equity Foundation. And 71% of this growth is expected to take place in hospitals.

 

Investment in private healthcare is going up too. The sector was the second favourite destination for foreign investment in 2013, receiving 27 investments worth $181 million from the US. Overall, hospitals and diagnostics centres received an FDI of $2191.91 million, while medical and surgical appliances (medical equipment) received $741.80 million in the last 13 years. (April 2000-December 2013) according to the Department of Industrial Policy and Promotion.

 

What are these funds being utilised for? Setting up new facilities, research and development into innovative practices, super-specialisation for chronic diseases like diabetes, Hepatitis B and medical treatments for both the domestic patients and those from abroad. These mean rise in recruitment and acquisition of a skilled workforce too.

 

While established medical chains like Apollo, Max and Fortis are branching out, new ones are coming up too. An 11-hospital set up in Kochi, called Aster Medcity is in the pipeline too for 2014. Apollo Hospitals is looking east, with plans to set up new facilities at Kolkata, Patna, Raipur and Guwahati.

 

Ambit for medical tourism

 

According to a sectoral outlook prepared by Accenture on India, the country hosts 150,000 medical tourists and this number will see a hike of 15% every year.  To capture this segment many corporate ventures have stepped into the sector, offering multi-specialty healthcare, diagnosis and treatment packages.  

 

Low cost medical innovation is an Indian specialty too, attracting investment from both domestic sources and foreign companies. Currently GE is in the process of setting up a manufacturing plant in Pune, which will see production of medical and surgical products too. This is expected to become operational by mid-2014.

 

Meanwhile, National Instruments, a US-based company, is in talks with Indian Institute of Technology, Madras, to work on a research facility for healthcare technology innovation. Apart from working towards newer processes to make diagnostics more efficient, this facility would look at production of automated testing equipment and virtual instrumentation software.

 

Challenges facing Indian healthcare:

 

Year-on-year, the challenges facing the sector have remained the same.  While we are looking at a $100 billion growth by 2015, the perennial problems facing India are still those arising from malnutrition (infant mortality, lacking overall development), sanitation and access to affordable hospitalization and clinical care.

 

On the other end of the spectrum, availability of a skilled workforce – both doctors and nursing and support staff – is cringing. Doctor-nurse density per 10,0000 persons of  the Indian population is an abysmal 19 (6.5 doctors + 13 nurses). (WHO report 2012).

 

Most of the skilled medical workforce is being sought out by countries in Europe and the Middle East and retained by attractive compensation packages there vis a vis India.

 

Compliance to regulations is still a cause for concern in both government as well as private-run organisations. What’s more the system suffers from the lack of a quick response and redressal system, with matters related to medical negligence and failure largely relegated as consumer affairs troubles.

 

Further, we need an effective mechanism to address demand for safe, affordable and quickly available healthcare for all.