With a large patient population and vast underdeveloped areas, Indian healthcare sector has bright prospects for growth. The need to improve infrastructure will keep the sector buoyant in the coming years, aver heads of some of the leading hospitals.
In order to cash in on the upcoming opportunities and drive the growth of the sector, hospitals from Apollo to Fortis and Manipal Health Enterprises Private Ltd, which are the largest and top three in terms of bed strength have put in massive expansion efforts. Even hospitals like the Narayana Health (formerly Narayana Hrudayalaya Hospitals) founded by Dr. Devi Shetty which has 22 hospitals across 14 Indian cities with total of 6200 beds is scouting for locations to build hospitals in the tier II and tier III cities.
"Healthcare has a poor presence in the central, north and north east of India. There is a need to invest in hospitals in these areas. Patients are seen travelling to south India for treatments. The hospitals in the southern states came up following the presence of leading medical colleges. Therefore, a medical institutional is seen as an ideal platform to establish a healthcare facility because of availability of doctors," said Rajen Padukone, managing director, Chief executive officer, Manipal Health Enterprises.
According to Dr. Devi Prasad Shetty, the objective is to not just build high-end hospitals in the metros, but to ensure investments in a chain of low-cost hospitals in smaller town and outskirts of districts that could serve much of the healthcare needs.
Dr Umapathy Panyala, CEO- Karnataka Region, Apollo Hospitals, said that large investments by private sector players are likely to contribute significantly to the development of India's hospital industry, which comprises around 80 per cent of the total market. Secondly, the trend is shifting from infectious diseases to lifestyle diseases.
There is a huge demand for single specialties like oncology, nephrology and ophthalmology. For instance Healthcare Global Enterprises Ltd is Asia's largest cancer care network, with 27 cancer centres, four tertiary care centres and four fertility care centres.
"We have redefined the future of healthcare in India by designing, building and managing centres with a committed vision. The vision of HCG is to make high quality healthcare accessible to all by adopting global innovations, said Dr. B S Ajaikumar, Chairman, HCG.
The Coimbatore-based The Eye Foundation (TEF) incepted in 1984, is a pioneer in the signature centres model where smaller centres could access the large facilities for complicated procedures. "TEF has six signature centres in Tamil Nadu. By mid-2014, it would expand into Karnataka at Mysore and Hubli, Kerala in Kochi besides Chennai. The capital expenditure envisaged is projected at Rs 80 crore. Over the next three years, plans are underway for a pan India presence which would be funded through internal accruals and other avenues," said Dr. D Ramamurthy, Chairman, The Eye Foundation and Chairperson, Scientific Committee of the All India Ophthalmological Society(AIOS).
Indian healthcare scene
Indian healthcare industry which includes hospitals, diagnostics, medical devices-equipment, clinical trials, outsourcing, telemedicine and health insurance would be valued around US $ 280 billion by the year 2020. By 2017, is estimated to generate revenues to the tune of US$ 160 billion, according to the IBEF report.
According to a RNCOS report titled, 'Indian Medical Device Market Outlook for 2017'.
By 2015, Indian healthcare would be valued at US$ 81.2 billion. The sector generated revenues of over US$ 45 billion in 2012. This revenue is expected to increase at a compound annual growth rate (CAGR) of 20 per cent during 2012-2017,
“The Indian healthcare scene is becoming more exciting with every passing day. The healthcare spending in India is expected to rise by 12 per cent per annum. An estimate suggests that by 2014 healthcare spending could contribute to eight per cent of GDP and employ around nine million people. Rising incomes and growing literacy are likely to drive higher per capita expenditure on healthcare,” pointed out Dr. Panyala.
The industry is seen to make a gradual transition from paper files to electronic formats. This indicates that in the last few years, the healthcare assisted by information technology (IT) segment is seen to be on an upswing and expected to grow at a CAGR of around 22.7 per cent between 2013-2015. The Indian healthcare providers plan to spend Rs 5,700 crore (US$ 897.64 million) on IT products and services in 2013, a seven per cent rise over 2012 revenues of Rs 5,300 crore (US$ 834.65 million), as per a report by Gartner.
The Department of Industrial Policy and Promotion (DIPP) has stated that between April 2000 to June 2013, the foreign direct investment (FDI) into the hospital and diagnostics centres was US $ 1,914.28 million, while drugs & pharmaceutical and medical & surgical appliances industry registered FDI worth US$ 11,318 million and US$ 653.45 million, respectively.
Key drivers of healthcare industry
According to Ernst & Young, the key drivers of the sector are rural healthcare growth, health insurance penetration, preventive healthcare and medical tourism.
Rural healthcare sector is also witnessing an expansion. During the last five years, the government of India has added around 15,000 health sub-centres and appointed 28,000 nurses and midwives.
RNCOS indicates that Indian health insurance market represents one the fastest growing and second largest non-life insurance segment in the country. The premium is expected to grow at a CAGR of over 25 per cent for the period spanning from 2009-10 to 2013-14.
India's share in the global medical tourism industry is predicted to be around three per cent by the end of 2013. The sector is expected to generate around US$ 3 billion in revenues by 2013, with the number of medical tourists to grow at a CAGR of over 19 per cent during 2011-2013 to reach 1.3 million by 2013.
The Indian medical technology industry is expected to reach US$ 14 billion by 2020 from US$ 2.7 billion in 2008, according to a report by PwC.
There are also efforts by healthcare providers to set-up massive infrastructure to provide the required quality care. Demographics, health awareness and increasing capacity to spend are the key drivers of the preventive healthcare segment in India.
For instance, Frontier Mediville, an initiative of the Frontier Lifeline & Dr K M Cherian Heart Foundation has announced its investment of Rs.1,000 crore to set up the facility in the country's first healthcare Special Economic Zone (SEZ), at Elavoor, near Chennai.
Fortis and Apollo are expanding to tier-II and tier-III cities, along with urban cities, due to substantial demand for high-quality and specialty healthcare services in these cities.
Computer-based bio-surveillance projects generating data about diseases and creating databases on healthcare in rural areas are gaining popularity in India Narayana Health City and the Mazumdar Shaw Cancer Centre making a presence in the sector, reports Overseas Indian Facilitation Centre, which comes under the aegis of Confederation of Indian Industry.
Huge scope for medical tourism
With advantages of lower cost and sophisticated treatments, India is considered among the most competitive destinations. Due to these factors, the medical tourism has great potential in the country.
The industry in India is expected to record revenue worth US$ 1 billion per annum, growing at around 18 per cent and is expected to touch US$ 2 billion by 2015. India has witnessed an influx of patients from Africa, CIS countries, Gulf and SAARC nations, Pakistan, Bangladesh and Myanmar, who mainly come for organ transplant, orthopaedic, cardiac and oncology problems.
Apollo Hospitals has six tele-medicine centres in the East and North East India. Plans are afoot to add another 24 over the next couple of years.
In the case of Manipal Health Enterprises, medical tourism is seen to be a key area of growth and this segment constituted five of percent of its Rs. 800 crore revenues in 2012-13, said Padukone.
Technologies revolutionizing healthcare delivery
Use of information technology has paved a way for paradigm shift in patient management and interface especially in the areas of telemedicine , tele ICU, electronic medical records and system driven drug delivery and dispensing system. This has brought in a sea change in the prevention of medical errors hence saving lives and costs. Top-of-the-line diagnostics and imaging services have made a huge impact in the area of clinical prognosis which is aiding doctors for accurate and quicker turnaround. State-of art-technology like True Beam and Cyberknife for cancer treatment both of which are available with Apollo Group has made a difference in delivery of treatment with high level of accuracy with less pain and quick recovery, said Dr. Panyala.
According to Padukone, robot assisted surgery has transformed operations and recovery time. The robotic surgical system is designed to seamlessly replicate the movement of the surgeon's hands with the tips of micro-instruments. The system cannot make decisions on its own, nor can it perform any type of movement or manoeuvre, without the surgeon's direct input, so at all times during the surgery, it is guided by the direct supervision of the surgeon. The sophisticated robotic system is capable of expanding the operator's surgical skills, allowing unmatched accuracy, vision and control. Furthermore, the surgeon can offer a minimally invasive option which is far more precise then conventional MIS. On an average a patient undergoing a robotic assisted surgery will leave the hospital two to five days earlier as compared to patients who have undergone traditional surgery and return to work with normal activity 50 per cent more quickly. Additional benefits of the robot assisted surgery are that it can reach where surgeons hands cannot and also allows 360 degree rotation, which is not humanly possible. Thus robots take surgery beyond the limits and reach of the human hand.
From the Flattening Free Filter Mode technology to the Intra Operative 3D radio- guided surgery are some of the advanced technologies in oncology which are available in India, said Dr. Ajai Kumar.