Healthcare in India – Challenges and opportunities

On the Indian healthcare market
India is expected to rank amongst the top three healthcare markets in terms of incremental growth by 2020. Indian healthcare sector, one of the fastest-growing industries, is expected to advance at a CAGR of 22 percent during 2016–2022 to reach USD 372 billion by 2022. India has an advantage over its peers in the West and Asia in terms of cost of high-quality medical services offered. The hospital industry in India, accounting for 80 percent of the total healthcare market, is witnessing a huge investor demand from both global as well as domestic investors. Indian companies are entering into mergers and acquisitions with domestic and foreign companies to drive growth and gain new markets.

The presence of world-class hospitals and skilled medical professionals has strengthened India’s position as a preferred destination for medical tourism. 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.

The diagnostics industry in India is currently valued at USD 4 billion. The share of organized sector is almost 25 percent in this segment (15 percent in labs and 10 percent in radiology). The primary care industry is currently valued at USD 13 billion. The share of organized sector is practically negligible in this case.

The government is emphasising on eHealth initiatives, such as Mother and Child Tracking System (MCTS) and Facilitation Center (MCTFC). Telemedicine is a fast-emerging sector in India. Digital health knowledge resources, electronic medical records, mobile healthcare, electronic health records, hospital information system, PRACTO, technology-enabled care, telemedicine, and hospital management information systems are some of the technologies gaining wide acceptance in the sector. Per capita healthcare expenditure is rising due to rising incomes, easier access to high-quality healthcare facilities, and greater awareness of personal health and hygiene. Greater penetration of health insurance has aided the rise in healthcare spending, a trend likely to intensify in the coming decade. Contract research is a fast-growing segment in the Indian healthcare industry. Rising income levels, aging population, growing health awareness, and changing attitude toward preventive healthcare are expected to boost healthcare services’ demand in future.

On proportion of budgetary allocation for healthcare
The budgetary allocation for the department of health and family welfare has been increased by 15 percent to ₹62,659 crore (BE 2019-20) from the revised estimate for 2018-19. India continues to face the challenge of a low spend on healthcare (around 4.5 percent of the country’s GDP vis-a-vis the world average of around 9 percent), around 62 percent of which is still funded out of pocket, with public funds constituting an insufficient amount. Despite several government initiatives relating to social protection, such as the Employees’ State Insurance Scheme and the Central Government Health Scheme, only about one-fourth of the population is covered by some form of health insurance. Though several efforts, such as the NRHM, the Janani Suraksha Yojana, and the Rashtriya Swasthya Bima Yojana, have been made in the past few years to provide equitable healthcare to Indians, these programs by themselves cannot accomplish universal health coverage (UHC). The National Health Protection Scheme will substantially increase provision of secondary and tertiary care services to the poor. The increased focus on healthcare will go a long way in meeting the government’s target to enhance its spend on healthcare from 1.15 percent of the GDP currently to 2.5 percent of the GDP in 2025, and is in line with the government’s aim of becoming a payer rather than a provider of healthcare services.

On vision for health and family welfare
Increase life expectancy and improve physical quality of life of people so that they attain the highest level of physical, mental, and spiritual health and contribute toward the development of the country.