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Investing in India’s healthcare sector

COVID-19 has accelerated an ongoing shift within the healthcare sector towards the use of digital health technologies (healthtech). Around the world, the pandemic situation has prioritized patient centric remote monitoring solutions and deployment of non-contact technologies.

This is more so in countries like India with poor or uneven healthcare infrastructure, low ratio of healthcare providers to the population, and/or high population density as well as in areas where the population is at high-risk.

Regardless, the adoption of digital solutions and non-contact processes – activated suddenly during the pandemic and sometimes with no alternative – is likely to influence how the healthcare sector evolves long after COVID-19 ends.

As patient familiarity with healthtech increases and their widespread use is forced upon reluctant and willing medical practitioners, the delivery of healthcare is bound to experience significant change.

Moreover, dealing with the fallout of the pandemic has pushed policymakers to plan for expanding access to and enhancing the capacity of emergency health services and laboratory testing, which is why the role of digital technologies in optimizing the use of resources will amplify.

In India, COVID-19 has already propelled the practice of telemedicine to the forefront, enabling doctors to examine a multitude of patients via video conferencing tools.

Telemedicine, which specifically refers to remote-based clinical services, comes under the broader segment of telehealth – that is, the distribution of health-related services and information via digital technologies. Telehealth systems allow long-distance patient and clinician contact, care, advice, reminders, education, intervention, monitoring, and remote admissions.

In India, telehealth systems have helped relieve some of the immediate pressures on the country’s overburdened healthcare infrastructure as its COVID-19 cases shot up.

Here we briefly discuss the new regulation on telemedicine and other emerging investment opportunities in India’s healthcare sector.

Regulation of telemedicine in India

In March 2020, the Indian government issued the Telemedicine Practice Guidelines to enable registered medical practitioners to provide healthcare services using telecommunication and digital technologies. Registered medical practitioners in India are persons who have completed their recognized medical qualification and are enrolled in the state or national register under The Indian Medical Council Act, 1956.

Given the urgent need to overcome major gaps in India’s healthcare system during the pandemic, the new guidelines are essential towards establishing legal transparency and accountability while also providing immediate consultations and preventing exposure to infection.

The Telemedicine Practice Guidelines recognize the following models of patient consultation – video, audio, and text, which includes telephones, video devices, chat platforms (like WhatsApp, Facebook messenger), email, fax, or special apps developed for remote consultation. The registered medical practitioner will use their best judgment with respect to whether a teleconsultation is acceptable, or the patient requires an in-person consultation. The consultant must maintain a record of the telemedicine interaction – phone logs, email records, chat or text records, and video interaction logs as well as patient records, reports, documents, images, diagnostic data, etc.

The general requirements under the Indian Medical Council Act, 1956 relating to professional misconduct and ethics will be applicable to telemedicine consultations as well.

The Telemedicine Practice Guidelines also outline the process for prescribing medicines, first consult and follow-up consult, identity and consent, action to be taken during emergency situations, among other concerns.

The Guidelines, however, do not allow the use of digital technologies to conduct surgical or invasive procedures remotely. The Guidelines do not cover data management systems or consultations outside India’s jurisdiction.

Previously, the government drafted a bill for the Digital Information Security in Healthcare Act (DISHA) in 2018. In July 2019, the Ministry of Electronics and Information Technology sought to include it in the forthcoming ‘Data Protection Framework on Digital Information Privacy, Security & Confidentiality’ Act. However, more information and clarity on these regulations are still awaited.

New investment opportunities for foreign investors in India’s healthcare sector

The prolonged pandemic and the current absence of a vaccine will ensure that telehealth services, and telemedicine in particular, will be preferred for the foreseeable future. That gives healthtech manufacturers and service providers in India a crucial window of opportunity – to tap into new trends in the healthcare sector, capture local markets, and facilitate the need for effective remote patient care and long-term monitoring.

While not at a nascent stage, the country’s healthtech industry has clearly targeted finding solutions to specific gaps in the healthcare system and emerging consumer needs. Prior to COVID-19, the healthtech industry catered mainly towards developing diagnostics and medicine delivery solutions, building wearable gadgets, treating lifestyle-related issues like stress and anxiety disorders through remote therapy, enabling early diagnosis of genetic disorders, and the alleviation of pain after painful procedures.

With the disruption brought about by the coronavirus pandemic and the successful application of remote methods of patient care (also facilitated by improved internet connectivity and access) – the focus of healthtech in India is going to diversify.

Key segments where new opportunities will emerge include the development of tools to facilitate emergency care and improvements to medical infrastructure through technology-based optimization.

This includes expanding the scope of wearable devices to track health conditions, developing patient-facing mobile health apps, and the greater integration of artificial intelligence (AI), robots, and blockchain technologies – for example, surgical robots, robotic carriers, electronic records and monitoring systems, sensors, remote diagnostics, etc.

Contactless healthcare tools and systems, immunity-boosting nutrition, and safety and hygiene are some of the most viable segments for investors going forward as COVID-19 has brought about a paradigmatic shift in our consumption priorities and social behavior. Among others, the virus outbreak has convinced consumers to purchase more healthy foods, practice social distancing and mask-use, and implement constant hygiene be it through sanitizing hands, material surfaces, and deep cleaning of ventilation, workplaces, and living environments.

Already in 2019, the international consultancy PWC had forecast that India would be among the top 10 global growth markets for healthcare and nutrition. Meanwhile, the Indian government is actively encouraging the participation of both public and private players to develop digital solutions.

Below are some of the digital healthcare solutions adopted by the Indian government:

  • Aarogya Setu: Mobile app developed by the Ministry of Electronics and IT (MeitY) to help citizens identify their risk of contracting COVID-19.
  • Telemedicine Practice Guidelines: The Ministry of Health and Family Welfare (MoHFW) has released these guidelines in association with Niti Aayog to regulate the practice of remote clinical consultations. Doctors can now provide consultations through video, audio, email, or text.
  • National Health Stack (NHS) and National eHealth Authority (NeHA): Digital framework to support healthcare across India. Goal is to compile digital health records for all citizens by 2022 to leverage benefits of telemedicine and e-health for Indians.
  • e-Sanjeevani: An online OPD (doctor-to-patient), integrated telemedicine solutions developed by C-DAC (Centre for Development of Advanced Computing) Mohali last year. It has been rolled out across many states in India, including Punjab, Maharashtra, Tamil Nadu, and Kerala.

Examples of leading startups and private investors in India’s healthtech sector include:

  • Narayana Hrudayalaya, a chain of multi-specialty hospitals, which received funding worth US$48 million from the UK-based development finance institution CDC to expand affordable treatment in India.
  • Practo Technologies, which develops and distributes medical information systems, and raised US$55 million in its Series D round of funding led by Tencent Holdings Ltd.
  • Diagnostics startup SigTuple, which has secured multi-series funding, including a US$16-million Series C round led by Trusted Insight.
  • M-fine, an AI-powered online doctor consultation app, which managed to raise US$23 million from an assortment of venture capital investors – founders of Myntra; Stellaris Venture Partners and Prime Venture Partners; SBI Investment, the venture capital unit of Japan’s financial services company SBI Group; Singapore-based SBI Ven Capital; and SBI Group’s Southeast Asian investment arm and tech-focused global venture capital firm, Beenext.
  • 1mg technologies, which received Series-C round of US$15 million in funding from a group of investors led by HBM Healthcare Investments.
  • The UAE-based Gamma Group, which is reportedly finalizing plans for investing US$450 million in healthtech.

Finally, as the use of information technology (IT) in emerging verticals (retail, healthcare, utilities) continues to drive growth in the Indian market, the government will encourage greater foreign investment targeting research and development and innovation of hyperlocal solutions, which will in turn benefit the healthcare sector.

For instance, the Digital India Campaign envisages a US$20 billion investment covering mobile connectivity throughout the country, re-engineering of government process via technology, and enabling e-delivery of citizen services. And, the National Broadband Mission of the Government of India aims to fulfil the vision of ‘Broadband for All’ of the National Digital Communications Policy of 2018. The Mission’s deliverables include providing broadband internet access to all villages by 2022, increasing the present route length of 220,000 km of Optical Fiber Cable (OFC) to 5 million km, increasing the fiberization of telecom towers from 30 percent to at least 70 percent, and creating a Geographic Information System (GIS) based tool and setting up a National Fiber Grid to keep a mapping of the entire OFC network in the country. – India Briefing

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