Despite the slowdown that health-tech start-ups witnessed in 2023, akin to their peers in other sectors, industry players expect the government to use Budget 2024 to double down on strengthening the digital infrastructure around the country’s health sector and bridge the growing urban-rural divide in accessing health care.
For a country earning the moniker ‘Pharmacy of the World, ‘ providing accessible and equitable health care remains an elusive dream. However, technology is expected to be leveraged to provide digitised and affordable health care to rural India, which is home to approximately 65 per cent of the population.
“One of the most prominent issues is the glaring infrastructure disparities between urban and rural areas, necessitating targeted initiatives to enhance healthcare facilities in remote regions,” explained Dr Sahil Sahotra, head of operations at MedPay.
The digitisation of health care also holds immense potential as the market size is expected to gallop to $37 billion by 2030 from a mere $2.7 billion in 2022, as per a November 2023 report by consulting firm Boston Consulting Group and Singapore-based venture capital firm B Capital.
The AI aid
Besides digitisation, the sector is also moving towards adopting Artificial Intelligence (AI), which was arguably the most talked about emerging technology in 2023 to have impacted horizontally across various sectors.
“In 2023, AI found a pivotal role in various healthcare applications, including chatbots for patient support, medical image analysis for early disease detection, and personalised treatment plans,” said Pratip Mazumdar, co-founder at Inflexor Ventures.
A whopping 84 per cent of the healthcare and life sciences firms believe that Generative AI (Gen-AI) can positively impact workforce productivity, while almost 1 in 2 plan to implement their first GenAI solution within one year, revealed an EY India report.
According to Namit Chugh, principal at W Health Ventures, which invests in early-age healthcare start-ups, this sector needs government support in promoting innovation and establishing effective policies to drive AI’s incorporation across numerous processes smoothly.
Digital infrastructure and data privacy
Last year, the government developed several digitisation initiatives, including the National Digital Health Mission (NDHM) and Ayushman Bharat Digital Mission (ABDM), to create a unified healthcare infrastructure and provide digital health IDs and telemedicine access.
In line with this, the stakeholders expect the government to use the digital infrastructure to provide specialised healthcare services.
“Support the NDHM by increasing the uptake of digital health technologies, such as IoT, AI, data analytics, and electronic health records,” said Mazumdar when asked about his expectations from the interim Budget. Additionally, more financing to support local manufacturers and promote the ‘Make in India’ movement will enhance the production of medical equipment in the country.
However, some highlighted the need to ensure data privacy and security in the process of digitising public records.
“With the increasing digitisation of healthcare data, ensuring the privacy and security of patient information demands robust regulatory frameworks and technological solutions,” Medpay’s Dr Sahotra said.
Health-tech specific education and training
To lead the digital revolution in the health sector, start-ups require dedicated funding to train and upskill the talent pool. Government should also infuse funds in human resources to educate them about health tech—by way of stipend and in building infrastructure to make healthcare accessible in rural places, said Antony Prashant, life-sciences and healthcare consulting leader and partner at Deloitte.
Other people in the domain echo his opinions. “Investment in specialised training programs and academic partnerships is crucial to creating a skilled healthcare workforce for the high-tech medical device sector. This will ensure efficient penetration and utilisation of cutting-edge technologies,” Mandeep Singh Kumar, VP, and country GM, Intuitive India.
Putting the money where the potential is
According to data intelligence platform Tracxn, funding to the health-tech sector stood at $3.5 billion in 2021 and $1.5 billion in 2022. Last year, this came to $682.7 million as investors became cagey while signing term sheets and fewer funding announcements doing the rounds.
In 2023, the government proposed providing up to Rs 2,000 crore as venture capital for health-tech start-ups. It also allocated Rs 283.5 crore for the ‘Start-up India Seed Fund Scheme’, which aims to boost innovation and research by start-ups and academia.
Many recommend the government start an initial seed fund under the NDHM specifically to support health-tech start-ups. Further, Deloitte’s Partner Shuchi Ray expected moratoriums or tax reliefs for health-tech start-ups. “Government could even consider relief on taxation over exits of investors in the health-tech sector,” Ray said.
Kaivaan Movdawalla, healthcare partner at EY Parthenon India, also pointed out that while the Income Tax Act allows for the deduction of expenses spent towards preventive health check-ups and medical insurance premiums paid, the government could consider increasing the upper limit. Outlook India