Piyush Kumar
Senior Consultant – Transformational Health (Healthcare) Practice,
Frost & Sullivan

Healthcare In India: At The Cusp Of Transformation

Amidst the challenge of access to healthcare (India ranks 145th among 195 countries in healthcare access), public healthcare underspend (below 1.3 percent of GDP) and rising burden of non-communicable disease, Indian healthcare industry is at a cusp of transformation. It is witnessing an era of unparalleled growth and innovation due to rise of experience in care settings and is emerging as an opportune destination for investment. With rising demand for personalized and efficient services, healthcare delivery has fragmented into innovative business models supplementing specific needs. Based on my experiences and in-depth industry research conducted at Frost & Sullivan, regional healthcare is reflecting trends observed in the global healthcare over the past few years. From the emergence of single specialty hospitals and fertility treatment centers to technology-based models; the Indian healthcare industry has taken a giant leap during this decade. In my opinion, key factors driving this transformation are supportive regulatory environment, shift in consumer buying behavior, and technical innovation.

The supportive regulatory environment is enabling innovation in healthcare, giving opportunities to healthcare startups. The government’s vision to provide health coverage for 10 crore families under the Ayushman Bharat Yojana will increase affordability for healthcare. Traditional OP services are beginning to be covered by the payer within structured products. The recent move by the IRDAI, to include dental, stem cell, infertility, and psychiatric treatments under health insurance policies could also trigger the demand of these services. Further, the way people seek healthcare is changing with times calling for digitalization of healthcare with more technology-based care models. Spurring the demand is the millennial or drive through generation seeking smoother, faster, and friction-less healthcare on clicks, while still retaining the need for physical experience.

Artificial intelligence and machine learning models are gradually making inroads into the Indian healthcare settings with viable commercial models. Besides empowering physicians to predict potential diseases, they also reduce strain on medical resources and increase last mile access. In a country facing shortage of clinical manpower, infrastructure along with unequal distribution of healthcare services, AI is proving to be great transformational asset for healthcare industry. Indigenous startups and mega tech giants venturing into healthcare would soon open multiple avenues for Indian healthcare. In a nutshell, healthcare in India is evolving from evidence-based care to outcome-based care and moving toward predictive and preventive care.

However, there is a challenging aspect of the industry, which is hard to ignore. The concern over quality of care and infrastructure in the public sector is increasing the pressure on private hospitals. This coupled with the government’s policies of price control has further aggravated challenges for private hospitals. A major hit was the price control of stents and knee implants by over 70 percent and other price regulation initiatives at the state level. Considering the social and technical transformations discussed above and that the government’s intention to improve access and affordability of healthcare services is here to stay, it is time to respond more quickly by reinventing and adapting the new business model.

Innovative, and cost-effective measures need to be adopted by private healthcare players, focusing on cost-based pricing models, packaging of procedures rather than open billing and rationalizing the usage of consumables, at this juncture. Standardization and monitoring of the level of service delivery and quality of care is of utmost importance, which will be a key differentiator in the long run. Going further, it is important for hospitals to synthesize a multi-dimensional framework of innovation to keep pace with the growing technological progression and shift in consumer buying behavior to maximize benefits. With such developments altering the healthcare marketplace, identifying new areas for expansion will become imperative for hospitals.

Healthcare delivery shall be a collaborative effort of the government and private healthcare players together. A synergistic approach leveraging the best of each other following an innovative approach could ensure a smooth transition to the new era.

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