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The UHC Challenge

The one-and-a-half month long bidding saga between multiple parties wishing to acquire Fortis Healthcare lends credence to the fact that the healthcare industry is on a roll. In fact, ICICI Securities have pegged the revenues of hospitals at Rs. 8.6 trillion in FY 22, at a 16-17 percent CAGR. A recent PwC study, Financing and Funding Indian Healthcare: Navigating the Turbulent Tide reaffirms this.

The hospital chains are showing steady revenue growth despite the recent headwinds of price control, demonetization, and regulatory overreach. There is continued investor interest in healthcare and the players see listing as an attractive option for raising funds. The interest of the private equity fraternity continues with multiple companies in the healthcare sector raising funds. FDI flow is unabated with a flow of USD 747 million in FY17, the highest amount in the last 7 years. Medical tourism has been on the rise, with the number of medical visas increasing at a CAGR of 52 percent over the last 3 years.

Countries, which have performed relatively well on Universal Health Coverage, generally have high government spending on healthcare. Currently our government’s total healthcare expenditure is less than 5 percent of its GDP, as compared to the global average of 10 percent. And its spending as a percentage of total healthcare is 31 percent, as against the global average of 58 percent; with out-of-pocket expenditure at an abnormally high 66 percent.

Traditionally, the public and private sectors have not worked together. International experience shows that the most efficient public healthcare systems use private capital and expertise to induce efficiency and innovation. The challenges are serious, though not insurmountable. The stakeholders, the government and the providers, to deliver on their promises, must be prepared to take bold action if they are to achieve UHC.

More patients at the hospitals translate to procurement of more equipment. Our current edition, Buyer’s Guide, an exhaustive compilation of the equipment offered by the industry provides our readers, the buyer community with the information they need to make smart purchase decisions.

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