Diagnostics have a conclusive impact on both early detection of ailments and the care continuum as they are the fundamentals for the screening and detection of diseases at an early stage, prognosis, and determination of treatment regime and monitoring of patients. With the shifting focus from curative care to preventive care, diagnostics are taking center stage and are increasingly performed in prevention and wellness.
The medical diagnostic industry accounts for only 5 percent of the total health system cost, but it influences 95 percent of the remaining costs at present. The Indian diagnostic industry has been estimated at USD 9 billion (around ₹675 billion) and is expected to grow at a compounded annual growth rate (CAGR) of ~10 percent over the next 5 years. Growth will be primarily driven by increase in lifestyle diseases, change in demographics, and higher income levels across all strata of society along with rise in preventive testing, deeper penetration with asset-light expansion, and spread of healthcare as well as insurance services. With proposal of around 41 percent to be spent in primary healthcare on diagnostics, the Indian medical diagnostic industry will play a vital role in the prevention and wellness space, which is the foundation of Ayushman Bharat. Wellness centers being an important pillar for Ayushman Bharat, the government aims to set up 1.5 lakh such centers across the country.
NITI Aayog has called for making these centers operational by 2022–23 to ensure sufficient coverage and lower the burden on secondary and tertiary care. The diagnostic industry will play a critical role in making this a reality, while working closely with the government.
The Indian diagnostic industry with over 1 lakh labs is broadly segregated into pathology testing and imaging diagnostic services. Pathology testing (in-vitro diagnosis) includes sample collection in the form of blood, urine, and stool. This is followed by the sample’s analysis using laboratory equipment and technology to derive useful clinical information for assisting in patient treatment. The imaging diagnostic segment consist of more complex tests like CT scans and MRI and other highly specialized tests like positron emission tomography (PET) CT scans.
There are around 1,216 National Accreditation Board of Laboratories (NABL) and/or College of American Pathologists (CAP) accredited labs, which is ~1 percent of total labs in India and works out to less than 1 lab per million. However, the number of accredited labs is increasing rapidly and the number of those with NABL accreditation has increased at a CAGR of around 20 percent between 2012–2017. In the coming years, many more laboratories in the country are expected to opt for accreditation. Test quality has also improved over the years with more automation and more sophisticated tests being performed. The industry is increasingly opting for accreditation and deploys some of the best standards like CAP accreditation, NABL, and ISO certification.
The Indian medical diagnostic industry also employs around 0.8 million people, with almost 3–4 direct jobs and 3–6 indirect jobs created per new diagnostic establishment (the number varies as per the type of establishment – hospital-based lab, stand-alone lab or any other type of lab). Employment generation and additions to the workforce have enabled the industry to serve communities better. Home sample collection, online report generation, etc., add to the patient experience and ease of accessing the services of diagnostic labs.
Overall, the lab diagnostic industry plays a significant role in the care continuum. The growing importance of evidence-based medicine has provided a fillip to the industry. Along with its core objective of diagnosis, the industry offers additional benefits, be it employment generation, availability of specialized tests (Forex earnings), improved access, and technological advancements, among others.