20/01/2015
Healthcare has become one of India's largest sectors - both in terms of revenue and employment. The industry comprises hospitals, medical devices, clinical trials, outsourcing, telemedicine, medical tourism, health insurance and medical equipment. The Indian healthcare industry is growing at a tremendous pace due to its strengthening coverage, services and increasing expenditure by public as well private players.
The Indian healthcare delivery system is categorised into two major components - public and private. The Government i.e. public healthcare system comprises limited secondary and tertiary care institutions in key cities and focuses on providing basic healthcare facilities in the form of primary healthcare centers (PHCs) in rural areas. The private sector provides majority of secondary, tertiary and quaternary care institutions with a major concentration in metros, tier I and tier II cities.
India's primary competitive advantage over its peers lies in its large pool of well-trained medical professionals. Also, India's cost advantage compared to peers in Asia and Western countries is significant - cost of surgery in India is one-tenth of that in the US or Western Europe.
Market Size
The Indian healthcare industry is projected to continue its rapid expansion, with an estimated market value of US$ 280 billion by 2020, on the back of increased population growth in India's low income communities
Large investments by private sector players are likely to contribute significantly to the development of India's hospital industry and the sector is poised to grow to US$ 100 billion by the year 2015 and further to US$ 280 billion by 2020.
Private sector's share in healthcare delivery is expected to increase from 66 per cent in 2005 to 81 per cent by 2015. Private sector's share in hospitals and hospital beds is estimated at 74 per cent and 40 per cent, respectively.
The diagnostic market is the fastest growing segment of India's healthcare industry, according to PricewaterhouseCoopers (PwC), with the segment forecasted to grow to US$ 17 billion by 2021.
Investment
Healthcare providers in India are expected to spend US$ 1.1 billion on IT products and services in 2014, an increase of 5 percent over 2013, according to Gartner.
According to data released by the Department of Industrial Policy and Promotion (DIPP), hospital and diagnostic centres attracted foreign direct investment (FDI) worth US$ 2,494.98 million between April 2000 and September 2014.
Some of the major investments in the Indian healthcare industry are as follows:
Sequoia Capital has planned to invest Rs 100 crore (US$ 15.75 million) in Curatio Healthcare, which is among the fastest growing entrepreneurial-led healthcare ventures in India.
Narayana Health has planned to buy out Westbank Hospital for around Rs 200 crore (US$ 31.5 million). This move would help Narayana Health to increase its presence in the eastern part of the country.
Trivitron Healthcare has acquired Mumbai-based imaging accessories manufacturer Kiran Medical Systems, and Imaging Products (India) Pvt Ltd (IPI).
GPT Healthcare Pvt Ltd, a Kolkata-based company which operates a chain of hospitals, has raised an undisclosed amount in private equity funding from BanyanTree Growth Capital.
UniverCell plans to foray into the health and fitness category by launching a wireless health monitor, B.O.L.T in collaboration with American Megatrends India. The device interprets the body's vital information and lets a user access it through a specially designed cloud enabled smart app.
Sterling Group of Hospitals has entered into a joint venture with India Home Health Care (IHHC) to set up Asilia Home Healthcare that would cater home healthcare services segment.
Government Initiatives
India's universal health plan that aims to offer guaranteed benefits to a sixth of the world's population will cost an estimated Rs 1.6 trillion (US$ 25.2 billion) over the next four years.
Under the National Health Assurance Mission, Prime Minister Mr Narendra Modi's government would provide all citizens with free drugs and diagnostic treatment, as well as insurance cover to treat serious ailments.
All the government hospitals in Andhra Pradesh would get a facelift with a cost of Rs 45 crore (US$ 7.09 million), besides establishing 1000 generic medical shops across the State in a few months.
The Central Government has requested the Government of Odisha for allotment of 25 to 30 acres of land for setting up a satellite centre of the All Indian Institute of Medical Sciences (AIIMS) Bhubaneswar as a super specialty healthcare facility.
India and Maldives signed three agreements. The pacts included a MoU on health cooperation.
The Union Cabinet has approved the proposal for setting up of National Cancer Institute (NCI) at a cost of Rs 2,035 crore (US$ 320.66 million). NCI will be set up in the Jhajjar campus (Haryana) of AIIMS, New Delhi. The project is estimated to be completed in 45 months.
Road Ahead
The outlook for the Indian healthcare industry looks positive owing to high growth rate in almost all its segments, whether its primary healthcare, secondary and tertiary healthcare, medical equipment, diagnostics, health insurance or medical tourism. The ever growing population, increasing government expenditure on health and growing per capita income will increase the size of this industry in the years to come. Per capita income is expected to increase at a CAGR of 5.7 per cent over 2012-18. Rising incomes mean a steady growth in the ability to access healthcare and related services. Moreover, changing demographics will also contribute to greater healthcare spending; this is likely to continue with the size of the elderly population set to rise from the current 96 million to about 168 million by 2026. However, growing health awareness and precautionary treatments coupled with improved diagnostics will result in decreasing hospitalisation.
The medical tourism market in India is projected to hit US$ 3.9 billion mark this year having grown at a compounded annual growth rate (CAGR) of 27 per cent over the last three years, according to a joint report by consultancy firm KPMG and an industry body. The report says inflow of medical tourists is expected to cross 320 million by 2015
Exchange Rate: INR 1 = US$ 0.0157 as on December 23, 2014
References:Department of Industrial Policy and Promotion (DIPP), Union Budget 2012-13, RNCOS Reports, Media Reports, Press Information Bureau (PIB)
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same..
http://www.ibef.org/industry/healthcare-india.aspx
Healthcare Industry in India is expected to reach US$79 billion in 2012 & US$280 billion by 2020. The hospital services market is expected to reach US$81 billion by 2015. More info here.
