Healthcare industry in India

In recent years, the healthcare industry in India has grown exponentially. India is a rising power with a rapidly expanding healthcare economy. 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. The hospital industry is expected to reach USD 132 billion by 2023 from USD 61.8 billion in 2017, growing at a CAGR of 16–17 percent.

The medical tourism industry in India is expected to double its value to become a USD 6 billion industry by 2019 from USD 3 billion in 2017. Medical tourist arrivals in India increased by over 50 percent. 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).

On budgetary allocation in healthcare
The finance minister announced a ₹61,398 crore budgetary allocation for the health sector for the year 2019-20, with ₹6400 crore earmarked for the center’s ambitious AB-PMJAY health insurance scheme. The health outlay for the upcoming financial year is the highest in the last two financial years and a 16 percent increase over the 2018-19 allocation which was ₹52,800 crore.

The area that saw an increase was the allocation for the National Health Mission (NHM) that spiked 8 percent to ₹32,995 crore. NHM covers most of the central government-sponsored schemes related to healthcare for both rural and urban areas. Health and wellness centers, focused on primary care, provide comprehensive healthcare, including for non-communicable diseases and maternal and child health services. There are also plans to set up 1.50 lakh health and wellness centers (HWCs) by 2022. Till date, 17,150 HWCs have become functional. The National AIDS and STD Control Program also saw a 30-percent jump to ₹2500 crore allocation in Budget 2019.

The government also spoke about setting up a National Research Foundation to boost research in all areas, which could benefit for healthcare sectors as well, but there have been no significant announcements pertaining to healthcare in the diagnostic field.

There was no mention of incentives for setting up new hospitals in Tier-II and Tier-III cities, which dampened the industry expectations. The emphasis on start-ups and on the education sector is a good move. However, there was nothing to fuel growth in the healthcare sectors, which is disappointing. I was particularly keen on seeing a change in the weighted deduction for R&D which did not happen.

Outlook
An effective PPP model within the wellness outreach, where diagnostic test providers can participate effectively, will go a long way toward the overall vision of health for all. The fact that these are preventable needs the focus and investment of the government, especially in diagnostics. It is only through better partnerships with the private industry experts that the country can achieve the vision of health for all by 2022. Healthcare providers are faced with challenges relating to system implementation and change management. In general, implementation issues fall into three categories – organizational, client-related, and vendor-related. Organizational issues are both client and vendor related. Often, contractual agreements are hastily entered into as a result of marketing pressures from the vendor to close the deal and make up the numbers and time constraints, resulting in insufficient attention being paid to vital implementation issues. These can range from: (i) not taking into account the needs of the implementation team; (ii) failure to identify a single point of contact (mostly on the client side); (iii) impractical timescales; (iv) lack of clarity regarding actual deliverables; (v) staff turnover (on both sides); and (vi) absence of domain expertise to support the project.

So, challenges affecting implementation include human resources, staff issues, infrastructure, resources allocation, geography, referral ad marketing, leadership support, team dynamics, and processes, and the last but not the least convincing people for there’s problems and convincing them for solutions.