The Indian healthcare market is not very different from the global healthcare market; however, the only major difference is in the structure of both the healthcare markets. Talking about the global diagnostic market, it is valued at approx. USD 42–45 billion, wherein the majority of it is contributed by the developed nations like the US, Japan, Europe, and the like. In India, there is no formal way of capturing the estimates of the diagnostic market; hence, we have differing numbers. According to informal estimates, pathology and radiology in India will be around USD 8–9 billion.
The other key differentiator that I see between global healthcare and Indian healthcare is that in the former, the hospitals and diagnostic sector go hand-in-hand and a major chunk is funded by the government. For example, in a developed nation like the UK, the government’s share on healthcare expenditure is more than 80 percent and the rest is contributed by private players, whereas in India, two-thirds of the total expenditure on healthcare is funded by the private players and the government’s contribution is very limited. Another important difference is the insurance cover of diagnostics in both the markets. In the global healthcare market, the diagnostic tests are fully covered by insurance but in India, the scenario is different, and the out-of-pocket expenses in diagnostics are very high.
Talking about the pathology market, according to informal estimates, it is around USD 4–5 billion, including routine blood tests majorly, but also having contribution from clinical pathology, molecular, and genomics-based tests. The diagnostic market in India has been growing for the last so many decades; however, it has not been able to grow completely as per its potential as the market is still very fragmented, and the majority of it is still occupied by unorganized small players with at times of suspect quality.
On budgetary allocation in healthcare
Healthcare is gearing up to witness phenomenal changes and with the prime minister promising that the government will increase its public health spending from the current 1.15 percent to 2.5 percent of gross domestic product by 2025, all eyes are set on the healthcare sector.
Last year was extremely rough and challenging for private players in the healthcare sector, majorly affecting growth and profitability. The sector became less attractive for investments and even the existing players slowed down their CapEx plans. Given the fact that more than two-thirds of the sector is operated by private operators, the government must initiate and broaden its participation with the private players. The ambitious PMJAY scheme (Ayushman Bharat) seems promising and has the right intent, but we hope that the government authorities take the right partnership approach so that everybody can benefit from it.
With increased awareness about lifestyle disorders, increase in per capita incomes, and better healthcare facilities, the healthcare sector is witnessing rapid shifts in consumer demands. With non-communicable diseases like diabetes and heart diseases accounting for 60 percent of total deaths in the country, diagnostic companies will have a major role to play to tackle increasing threats from non-communicable diseases.
The need of the hour is an effective public-private partnership (PPP) model, where diagnostic test providers can participate effectively toward the overall vision of Health for All. Preventive healthcare needs the focus and investment of the government. It is only through better partnerships between the government and the private players that the country can achieve the vision of Health for All by 2022.
On the challenges faced while implementing healthcare services
As mentioned above, there have been tremendous changes in the consumer demands owing to a lot of factors. The problem that needs to be addressed urgently is the rise of non-communicable diseases. While the government continues to develop the current healthcare system through schemes like Mission Indra Dhanush and Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY), a lot still needs to be done on educating people and shifting their mindsets from curative to preventive healthcare.
As a diagnostic player, the biggest challenge is to make people aware of the importance of preventive healthcare. We usually have people coming to us for tests prescribed by doctors. Only when a problem reaches a symptom stage, a person goes to the doctor who then prescribes tests. But it is important to take some tests regularly so that the treatment can be started at the onset of the disease. As diagnostics lays the foundation of the treatment choice, it needs to get adequate impetus and ultimately become the center point of healthcare.
On monitoring the quality of private healthcare
Currently, more than 100,000 diagnostic laboratories are operating in the country out of which three-fourths offer pathology services and the remaining offer radiology and imaging services. Larger share of the diagnostic sector is unorganized and is being dominated by smaller players. They operate without any proper accreditations or certifications. The private or the big players that occupy only one percent of the diagnostic labs, function with proper accreditation from organizations like the National Accreditation Board for Testing and Calibration Laboratories (NABL) and College of American Pathologists, USA (CAP). There needs to be a regulatory body that regularizes policies and programs for all players in the diagnostic sector. A regulatory body is critical in ensuring standardization and regularization of processes across various systems. Essentially, all areas of healthcare should be subjected to regulatory review and compliance. Proper training should be provided to all the players and companies with no certifications must be restrained from performing tests on patients.
Healthcare regulations and standards go a long way in ensuring compliance and safety of patients. The healthcare regulatory agencies keep a strict eye on everyone in the system from practitioners and facilities and monitor their activities. It keeps them updated about industry changes and ensures legal compliance and quality services. These bodies are crucial to maintaining uniformity in the processes and systems.
On public-private partnership
Public-private partnership (PPP) models in the overall healthcare sector have been talked about in detail many times, but PPP models in diagnostic services remain at a dormant stage. An effective PPP diagnostic model can go a long way toward the overall vision of equitable health for all. This requires focus and investment of the government, especially in diagnostics and can be achieved only through better partnerships with the private industry experts.
There needs to be an efficient and sound solution to this challenge that addresses it through a concerted effort of both the public and the private sectors. The government must keep a wary eye for better partnerships and incentives with private healthcare and diagnostic players, if it expects to successfully achieve its target of universal and equitable healthcare for all. It is now time for the government to choose whether it wants to take up a role of a provider or of a payer. As a provider, it can contribute toward building infrastructure and managing operations of hospitals and diagnostic centers. In this role, there will be a slowdown in social insurance growth. As a payer, it can pay for healthcare services provided by the private sector, but that would again slow down the growth of public beds. The latter issue can be resolved by adopting PPP model as the provision of having private players, as it is predicted to show strong growth.
Providing the best services in a healthcare-deficit country like ours, SRL Diagnostics has reached rural, tribal-dominated areas, and remote areas of Jharkhand, Himachal Pradesh, and Uttar Pradesh, and provided best diagnostic services to the inhabitants. Occupying the top slot in diagnostic PPP space in India, SRL has successfully partnered with various state governments and continues to provide quality diagnostic services to everyone.
On areas where government should invest to make healthcare available to everyone on-the-go
The public and private health systems are over-burdened with problems like rising costs, generating revenues, and declining margins for many years now. The problem is likely to persist due to infrastructural upgrades, funding limitations, and technological advancements, straining the already-succumbing resources.
Another challenge is healthcare accessibility in India, where there is just one doctor for around 1700 people in India and about 70 percent of the healthcare infrastructure is focused around urban canters that cater to only 30 percent of the population. The shortage of health providers and infrastructure is the most acute in rural areas, where catastrophic health expenses push large populations, more than 6 crore – greater than the average population of any European country – into poverty each year. To add to the woes, the Indian government’s healthcare spend as a percentage of GDP is among the lowest in the world. Poor funding and poor management of funds have been a major cause of concern for the Indian healthcare sector for some time now. Our government has recently started to push pharma companies, medical devices makers, and hospitals to cut prices through various policy interventions, which is further worsening the situation.
As a solution, in my view, our government must look at better partnerships and incentives for private healthcare and diagnostic providers, and hold the latter responsible for providing affordable and accessible quality healthcare for all. This will help the government in successfully achieving its target of universal Healthcare for All in the country, in the next few years.