Coming out of the shadows of the pandemic

As we usher in FY23, continued growth in healthcare needs is expected, with part of the pent-up demand and price increases driving growth.

The National Health Authority (NHA) has extended an open invitation to all interested parties for sharing their Expression of Interest for developing innovative solutions that shall help build a national digital health ecosystem for India. This collaborative approach will not just help speed up the development, but also help in making digital public goods and solutions as a service available to public and private entities at no cost. NHA, the implementing agency for Ayushman Bharat Digital Mission endeavors to give impetus to open and interoperable standards. Such an undertaking will not only expedite Universal Health Coverage goals in India, but also have ripple effects on the global health ecosystem.

FY23 shall also see the beginning of a medical college being established in every district in India. The health department has allocated a fund of ₹1000 crore, with the aim to get a record number of new doctors by the next ten years. Currently, there is an acute shortage of physicians in India with only 0.65 available per 1000 people against the WHO standard of 1 per 1000 people.

On the back of continued momentum of elective procedures and strong average revenue per occupied bed, the hospitals expect a major improvement in profitability, and calibrated capacity-enhancement CapEx. Normalization of international travel restrictions is leading to a recovery in international patient revenue. Given the continued patient preference for branded hospital chains, several large hospitals have announced sizeable capacity-expansion plans across the country. Industry players had slowed down their greenfield expansions during the last couple of years, with the focus having shifted on improving returns on existing facilities. However, a key monitorable regarding the funding pattern for the expansion plans remains. Further, timeline of these spends will also remain sensitive to the future waves of the pandemic, if any, and impact of the same on economic activity and mobility, going forward.

For the diagnostic companies, a recovery in non Covid-19 related revenue and a moderate demand for Covid-19 tests, the outlook is neutral. The diagnostic chains are strengthening as well as diversifying their diagnostics offerings. Expansion plans of adding new centers and potential partnerships and acquisitions have been announced. Metropolis Healthcare, including its recently acquired Hitech Diagnostic Center in the south, Neuberg Diagnostics and Mahajan Imaging, have recently announced their investment plans.

Coming out of the shadows of the pandemic, with changing healthcare paradigms, the MedTech industry is poised to touch ₹3750 crore by 2025.