A case study on

Addressing the Needs of Indian Healthcare Industry

Team Name : One Shot- One KillInstitute : Indian Institute of Management Raipur

Team MembersMember 1 : Nabil Abdulla P KEmail :15pgp091.nabil@iimraipur.ac.inMobile : 7225018091Member 2 : Habeeb Rahman N KEmail :15pgp079.habeeb@iimraipur.ac.inMobile : 7225018079

Member 3 : Aswin R SekharEmail :15pgp129.aswins@iimraipur.ac.inMobile : 7225018129

Current Trend of Healthcare in India

US$ 100

billion

2015

US$ 280

billion

2022

CAGR 22.9

China brazil India USA UK Global

4.3%

8.4%

4.1%

15.7%

8.4%9.7%

Spending as % of GDP

74%

26%

Expenditure (%)

Private Public

Insurance& Medical Equipment

15%

Hospital50%

Pharma25%

Diagnostics10%

Industry Break-up

Source : World Bank, BMI Report, Techsci ResearchSource: WHO World Health Statistics

Major Problems of Indian

Healthcare System

Changing Disease Profile

Accessibility Issues

Very Low Public Expenditure

Lack Of Infrastructure

Paucity of

Manpower

Fastest Growing Population

Japan

Russia

China

USA

UK

Brazil

Thailand

Malaysia

India

Indonesia

Philippines

0 2 4 6 8 10 12 14 16

Hospital Beds per Thousand Population,2013Global Average 2.9

Japan

Russia

China

USA

UK

India

Brazil

Malaysia

Indonesia

0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5

Physician per Thousand Population

Global Average 1

Population Rural(72%) Urban(28%)

Hospital % 31 69Hospital Bed % 20 80Doctors % 8 92Doctors/100,000 people 5 50Spurious Pharma Sales 75-80 20-25

Parameter Current Annual Production

To fill the gap

Physicians 30,558 9,93,500Nurses 1,14,218 2,510,250

Source : World Bank, BMI Report, Techsci ResearchSource: WHO World Health Statistics

How to tackle Human

Resources shortage?

maintaining an adequate workforce• Need 600(100 Seats) Medical College, 1500(60

seats) Nursing College to fill the gap• Retaining existing workers, including those able to

retire• Create Long term benefits to increase attractiveness• Redesigning work processes and introducing new

technologies to increase efficiency.

Launch Innovative fee payment• Provide industry Sponsorship for

lower income groups• Tie-ups between industry and

training institutes will help courses affordable

Sector Specific focused training • Promote infrastructure To increase access to remote

areas• Curriculum for most allied support professionals is

often not updated and not properly imparted• Incentivize industry players who offer training in rural

areas• Affordable training create large pool

Launch Sectoral awareness programs

• Promote vocational training in the in rural and remote areas

• Provide information on career options, career fairs, school education programs etc.

How to improve infrastructure

Foreign Direct Investment• High investment opportunity• Joint Venture

Private Equity Investment• Tertiary care hospitals in metros/

Tier 2 Cities• Showing good trend in Pharma

and Biotech systems

Public Private Partnership• Political Commitment and introduction of requisite regulations• Incentivize the private sector with an ‘acceptable rate of return• Education sector to reduce shortage in Human Resource

Tax Interventions• All new hospitals being set up in Tier II and Tier III towns of

India are given a five year tax holiday• Reduction in Import duty on equipment from 25 percent to 5

percent• Customs Duty reduced from 16 percent to 8 percent for

medical and veterinary furniture

Future of Indian

Medical Industry

Shift in demographics•Increase of geriatric population from 96m to 168m by 2026

•Over 60% of the population being comprised of health conscious youth

Dual disease burden•Urban India facing increasing incidence of lifestyle disease Eg diabetes, cancer

•Rural India-Communicable disease Eg typhoid, Dysentery

•50% of spending from inpatients to be on lifestyle diseases by 2016

Insurance converge•Out of pocket health expenditure approx. 67% of nation health expenditure

•Health insurance by Pvt schemes as low as 3-5%

•Impact of TPAs

R&D•Expenditure for health research increasing by 24% YOY

•Opportunity of contract research in India

•Market size on contract research showed a growth of 50% (2008-09)

•Main players: Apollo spectra research foundation and fortis research clinical foundation

Digitalization•Mobile apps•Sites•Use of Gadgets & equipment

•Health record database

Medical Tourism

Single specialty hospitals•Ease of operation•Economies of scale•Competitive pricing•Higher quality due to greater specialization

•Eg Aravind eye care, Mohan’s Diabetic care

Source : Strategic health care solution Pvt Ltd Article : Healthcare: Destination India(2004)

Impact of digitalization in urban areas

Target Market

• Aimed at upper middle class and above• Major portion comprising of lifestyle-related diseases

Implementation

• Aimed at prevention and monitoring• Uses gadgets and equipment to collect and analyse data

remotely

Health records

• Digitisation of personal health records• Sharing of digital health care data across different platforms and

applications• Privacy issue is a main concern

Patients

Equipments and gadgets

DatabaseAnalysis

Feedback

Impact of digitalization in rural areas

Grass root level

• E-choupal model outreach centers• Increased role of nurses

Midlevel

• Efficient utilization of doctors• Screening process in first stage to categorize the

patients based on need

Tertiary care• Needed cases to receive specialist attention

Specialist

Physician

Outreach centers with internet connectivity

manned by nurses

Strengths• Quality service at affordable cost• Strong presence in advanced healthcare• International reputation of hospitals and

doctors

Weakness• Low Coordination between the various

players in the industry• Customer Perception as an unhygienic

country• Lack of uniform pricing policies

Opportunities• Increases demand for wellness tourism • Demand from countries with

underdeveloped• Countries with aging population

Threats• Under-investment in health

infrastructure• Lack of international accreditation• Overseas medical care not covered by

insurance

Medical tourism in India

Wellness tourism

Alternate medicine

Advanced medicine

Services Stress relief, rejunuvation center

AYUSH treatment

Open transplants, hip replacement, eye treatment

Key competitors

Thailand, South Africa

Thailand, South Africa

Singapore, Jordan

India’s Strength

Medium High High

Alternate medicine• Undisputed leader in

Ayurveda, unani, siddha and naturopathy

• 12% CAGR

Wellness tourism• Undisputed leader in yoga,

meditation, holistic healing and naturopathy

• 20% CAGR expected

Advanced medicine• Specialized treatment at low

costs• Asian and African countries• 20% CAGR expected

Source : SRI International Research Study

2009 2010 2011 20120

1

2

3

4

5

6

7

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

5.16 5.77 6.3 6.57

2.2%

2.7%

2.2%

2.6%

Foreign Tourist Arrivals (FTA) vs FTAs for medical treatment in India

FTAs Medical FTAsM

illio

n FT

As

USA UK Bangladesh Sri Lanka Canada Germany France Japan Australia Malaysia0

0.2

0.4

0.6

0.8

1

1.2

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

Top 10 source countries of FTAs in India, 2013

FTAs Medical FTAs

Mill

ion

FTAs

Source : KPMG medical value travel report

Foreign Medical Tourist Inflow

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