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HEALTHCARE SECTOR IN INDIA HEALTHCARE SECTOR IN INDIA Challenges and Opportunities

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Page 1: Healthcare Sector in India

HEALTHCARE SECTOR IN INDIAHEALTHCARE SECTOR IN INDIA

Challenges and Opportunities

Page 2: Healthcare Sector in India

OUTLINE

Healthcare Sector in IndiaHealthcare Sector in India

Current ScenarioCurrent Scenario

Growth DriversGrowth Drivers

Public vs Private sectorPublic vs Private sector

Healthcare Value ChainHealthcare Value Chain

Government Policies and IncentivesGovernment Policies and Incentives

Major PlayersMajor PlayersMajor PlayersMajor Players

Future GrowthFuture Growth

ChallengesChallengesChallengesChallenges

Business OpportunitiesBusiness Opportunities

Page 3: Healthcare Sector in India

HEALTHCARE SECTOR IN INDIA

Health administration in India is governed by theMinistry of Health and Family Welfare

The central administration provides co-ordination anddirection to a network of state health ministries for

l i l iactual implementation

The healthcare sector constitutes

Medical care providersDiagnostic service centres and pathological labsMedical equipment manufacturersMedical equipment manufacturersContract research organizationsPharmaceutical manufacturersThird party support service providers

Page 4: Healthcare Sector in India

HEALTH INFRASTRUCTURE A COMPARISON

BedsP ’000 l ti

PhysiciansP ’000 l ti

NursesPer ’000 population

Countries

India

Per ’000 population

1 5 1.2

Per ’000 population

0 9

Per 000 population

Low income (e.g., sub-Saharan Africa)

1.5

1.5 1.0

0.9

1.6

Middle income (e.g., China, Brazil) 4.3 1.8

1.6

1.9

High income (e.g., US, Western Europe) 7.4 1.8

7.5

World average 3.3 1.5 3.3

Page 5: Healthcare Sector in India

HEALTHCARE - INFRASTRUCTURE

Investment in Major States

189157

150

200

11194

100

SD M

illion

0

50US

Maharashtra Delhi Karnataka Meghalaya

States

Page 6: Healthcare Sector in India

HEALTHCARE–REGISTERED DOCTORS

Availability of Doctors in Major States

95,299100,000

120,000

d

72,72564,492

53,456

40 000

60,000

80,000

ors r

egist

ered

0

20,000

40,000

No. o

f Doc

to

Maharashtra Tamil Nadu Karnataka West Bengal

States

Page 7: Healthcare Sector in India

OUTLINE

Healthcare Sector in IndiaHealthcare Sector in India

Current ScenarioCurrent Scenario

Growth DriversGrowth Drivers

Public vs Private sectorPublic vs Private sector

Healthcare Value ChainHealthcare Value Chain

Government Policies and IncentivesGovernment Policies and Incentives

Major PlayersMajor PlayersMajor PlayersMajor Players

Future GrowthFuture Growth

ChallengesChallengesChallengesChallenges

Business OpportunitiesBusiness Opportunities

Page 8: Healthcare Sector in India

CURRENT SCENARIO

The healthcare industry is estimated at USD22 billion22 billion

Estimated growth at 13 per cent annuallyt f 15 20 t f thassures a return of 15-20 per cent for the

healthcare providers

Healthcare sector at present employs 4 millionpeople directly and indirectly

Private healthcare market currently estimatedat Rs 690 billion (USD 14.8 billion)

Page 9: Healthcare Sector in India

CURRENT SCENARIO

85 per cent private sector establishmentshave less than 25 bedshave less than 25 beds

Speciality and super speciality hospitalsaccount for 2 per cent of total institutesaccount for 2 per cent of total institutes

Corporate hospitals constitute less than 1 percent of all institutescent of all institutes

Private sector accounts for 82 per cent of allout patient visitsout-patient visits

Private sector accounts for 52 per cent of allh it li tihospitalization

Page 10: Healthcare Sector in India

CURRENT SCENARIO

Current Healthcare InfrastructureHealthcare Indicators: India Vs World

Hospitals 15,393

Public 4,049

Private 11,344

6378

Life expectancy at birth

Developed CountriesIndia Today

Developing CountriesIndia at 1990

Developed CountriesIndia Today

Developing CountriesIndia at 19901951

Hospital beds 875,000

Doctors 592,215

Nurses 737,000

37

63 65

56146Infant mortality

Dentists 80,000

Medical Colleges 170

Retail chemist outlets 350,000

656

70

Th i bi f i t h t i t t t iti

New doctors every year 18,000

There is a big scope for improvement, hence vast investment opportunities…

Page 11: Healthcare Sector in India

STATUS OF HEALTHCARE SECTOR

Sector Direct employment Revenues/GDP

Million, 2000-2001 Per cent, 2000-2001

4.0

5.3

5.2

4.8

Healthcare

Education

1.0

1.2

1 6

3.5

3.0

1 8

Retail banking

Power

R il

Healthcare is the largest service

industry in terms of revenues and

the second1.6

0.8

1 7

1.8

1.4

0 9

Railways

Telecom

Hotels, restaurants

the second largest after education in

terms of employment

1.7

0.4

0.9

1.7

,

IT

By 2012, the sector could account for 6 to 8 per cent of GDP and providedirect and indirect employment of 8 million

Page 12: Healthcare Sector in India

HEALTHCARE ISSUES & CONCERNS

Small hospitals – 80 per cent < 25b dbedsSpecialised services available in only 2per cent hospitalsper cent hospitalsGood healthcare available only inmetrosLack of infrastructureMismanaged Public hospitalsI d t ti f bliInadequate remuneration for publichospital staffLack of commitment Lack of commitment

Page 13: Healthcare Sector in India

OUTLINE

Healthcare Sector in IndiaHealthcare Sector in India

Current ScenarioCurrent Scenario

Growth DriversGrowth Drivers

Public vs Private sectorPublic vs Private sector

Healthcare Value ChainHealthcare Value Chain

Government Policies and IncentivesGovernment Policies and Incentives

Major PlayersMajor PlayersMajor PlayersMajor Players

Future GrowthFuture Growth

ChallengesChallengesChallengesChallenges

Business OpportunitiesBusiness Opportunities

Page 14: Healthcare Sector in India

GROWTH DRIVERS

“Physicians, Nurses, Medical Technicians and Other Scientific Occupations will Become Growth Industries to Rival the IT Sector

within the Next Decade”

- India Vision 2020 Report

Page 15: Healthcare Sector in India

GROWTH DRIVERS

Private Healthcare Spending

42

30354045

n 8 4 bn

if health insurance cover is available to the rich and the middle class it

14.8

51015202530

USD

Bill

ion 8.4 bn

33.6 bn

would rise to this level

05

2007 2012

Year

Private healthcare expected to grow to Rs 1,560 billion (USD 33.6 billion) in 2012

Page 16: Healthcare Sector in India

GROWTH DRIVERS

This would account for

Total Healthcare Sector

52-6970

80

This would account foraround 6.2 to 8.5% of GDPby 2012

22 230

40

50

60

USD

Bill

ion

Currently 5.2% of GDP

22.2

0

10

20

2007 2012

Year

Total Healthcare market including Pharma to account for 6.2 to 8.5% of GDP in 2012

Page 17: Healthcare Sector in India

GROWTH DRIVERS

Corporates are sensing a huge untapped opportunity indelivery of quality healthcare to the Indian masses

Policies and budgetary considerations towardspharmaceutical as well as biotech organizations are nowf blfavorable

De-regulation of health insurance has paved the way for theentry of foreign health insurance companiesentry of foreign health insurance companies

Medical equipment industry too being opened to foreigncollaboration for manufacturing high and middle-levelcollaboration for manufacturing high and middle leveltechnology medical equipment

Global Private Equity players and Venture Capital companiesGlobal Private Equity players and Venture Capital companiesalso actively exploring opportunities

Page 18: Healthcare Sector in India

GROWTH DRIVERS

INDIA – COST ADVANTAGE

PROCEDURE COST (US$)

THAILANDTHAILAND INDIA

Heart Surgery 7,500 6,000

USUS

40,000

UK

23,000

Bone Marrow Transplant

Liver Transplant

-------

-------

26,000

69,000

2,50,000

3,00,000

1,50,000

2,00,000

Knee Replacement

Cosmetic Surgery

8,000

3,500

6,000

2,000

20,000

20,000

12,000

10,000

Page 19: Healthcare Sector in India

GROWTH DRIVERS

HEALTHCARE SNAPSHOTS

0.5 million major surgeries carried out

Over a million surgical procedures carried out

Cardiac bypass success rate – 98.7 per cent

B t l t 80 t tBone marrow transplant – 80 per cent success rate

Renal transplant – 95 per cent success rate

Page 20: Healthcare Sector in India

INTERNATIONAL RECOGNITION

As per NHS of UK - India is a favored destination for surgeries

British Standards Institute has accredited Delhi-based EscortsHospital

Wockhardt Hospital has an exclusive association with HarvardWockhardt Hospital has an exclusive association with HarvardMedical International, global arm of Harvard Medical School

US-based Joint Commission on Accreditation of HealthcareOrganisations has certified:

Indraprastha Apollo Hospital (New Delhi)Apollo Hospital (Chennai)Apollo Hospital (Hyderabad)Apollo Hospital (Hyderabad)Wockhardt Hospital (Mumbai)

Shroff Eye Hospital (Mumbai)

Page 21: Healthcare Sector in India

OUTLINE

Healthcare Sector in IndiaHealthcare Sector in India

Current ScenarioCurrent Scenario

Growth DriversGrowth Drivers

Public & Private SectorPublic & Private Sector

Healthcare Value ChainHealthcare Value Chain

Government Policies and IncentivesGovernment Policies and Incentives

Major PlayersMajor PlayersMajor PlayersMajor Players

Future GrowthFuture Growth

ChallengesChallengesChallengesChallenges

Business OpportunitiesBusiness Opportunities

Page 22: Healthcare Sector in India

HEALTHCARE - PRIVATE & PUBLIC

Private sector offers tertiary-level, preventive and diagnosticy , p ghealthcare

Public/Private share of Non Hospitalization

78 81

50

60

70

80

90Public/Private share of Hospitalization

5862

50

60

70

22 19

0

10

20

30

40

Rural Urban

4238

10

20

30

40

Public Private0

0

Rural Urban

Public Private

Page 23: Healthcare Sector in India

ROLE OF PUBLIC SECTOR

Public sector focus is on prevention and elimination of infectious diseases and accessibility of basic healthcare facilities to the

rural and urban masses

Page 24: Healthcare Sector in India

PRIVATE SECTOR INITIATIVES

At Rs 690 billion, private spending accounts for 80 per cent of the healthaccounts for 80 per cent of the health care market

61 per cent is spent on outpatient care

Over 50 per cent of outpatient spend is on acute infectious diseases

Over 80 per cent of inpatient spend is in five d d fareas: cardio, cancer, accidents, acute infections

and maternity

Urban Indians and rich account for a disproportionate spenddisproportionate spend

Page 25: Healthcare Sector in India

HEALTHCARE EXPENDITURE

Public & Private Sector Initiatives

138 bn

552 bn

Private Spending Govt Spending

Out of Rs 690 billion, (USD17 billion) the private sector accounts for 80 per cent or Rs 552 billion of the spending

Page 26: Healthcare Sector in India

PRIVATE EQUITY IN HEALTHCARE

Private equity deals in Healthcare in India, 2006 (USD Million)

Diagnostic

2006 (USD Million)

Hospitals, 82.33

Diagnostic chains, 8

Ph tiPharmaceuticals, 377.56

Page 27: Healthcare Sector in India

PRIVATE EQUITY IN HEALTHCARE

MAJOR HEALTHCARE DEALS

George Soros’ fund Quantum and Blue Ridge bought 10per cent in Fortis HealthcarepManipal Health Systems Private Limited raised overUSD 20 million of equity from IDFC Private Equity FundBangalore-based HealthCare Global Enterprises LimitedBangalore based HealthCare Global Enterprises Limited(HCG) raised over USD 10 million in equity from IDFCPrivate Equity FundMetropolis Health Services Ltd. India’s leadingMetropolis Health Services Ltd. India s leadingCorporate Diagnostics Chain raised over USD 8 millionin equity from India Advantage Fund-I managed byICICI Ventures

Page 28: Healthcare Sector in India

OUTLINE

Healthcare Sector in IndiaHealthcare Sector in India

Current ScenarioCurrent Scenario

Growth DriversGrowth Drivers

Public vs Private sectorPublic vs Private sector

Healthcare Value ChainHealthcare Value Chain

Government Policies and IncentivesGovernment Policies and Incentives

Major PlayersMajor PlayersMajor PlayersMajor Players

Future GrowthFuture Growth

ChallengesChallengesChallengesChallenges

Business OpportunitiesBusiness Opportunities

Page 29: Healthcare Sector in India

HEALTHCARE VALUE CHAIN

Business Objectives Expected Ch

Business O t iti

• Health insurance•Quality services

•Changing diseases pattern

•Changing socio economic profile

us ess Object es Changes Opportunities

Patient

H it l

• Medical tourism

• Preventive healthcare

• Healthcare BPO

• Value for money• Minimum co-pay

• Minimization of the cost

profile

•Changing life style patterns

•Demand for quality healthcare

Hospital • Telemedicine

• Laboratory and diagnostic services

• Medical devices

• Health IT

• Wealth maximization• Increase value per patient• Operational efficiency

•Corporatization of Indian healthcare

• Increasing penetration of private health insurance

Insurance• Health IT

• Consulting

• Wealth maximization• Minimum annual pay put

•Foreign alliances

•Information technology in healthcare

Investment opportunities exist in multiple segments along the value chain

Page 30: Healthcare Sector in India

OUTLINE

Healthcare Sector in IndiaHealthcare Sector in India

Current ScenarioCurrent Scenario

Growth DriversGrowth Drivers

Public vs Private sectorPublic vs Private sector

Healthcare Value ChainHealthcare Value Chain

Government Policies and IncentivesGovernment Policies and Incentives

Major PlayersMajor PlayersMajor PlayersMajor Players

Future GrowthFuture Growth

ChallengesChallengesChallengesChallenges

Business OpportunitiesBusiness Opportunities

Page 31: Healthcare Sector in India

GOVERNMENT POLICIES & INCENTIVES

Infrastructure status conferred on healthcare industry

Budgetary allocation to healthcare – Rs 62 billion (USD 1 51Budgetary allocation to healthcare Rs 62 billion (USD 1.51billion)

40 per cent depreciation limit on medical equipment imports

Income tax exemption for the first 5 years to 100 bed hospitalsIncome tax exemption for the first 5 years, to 100 bed hospitalsset up in rural areas

Reduced duties (between 5–8 per cent) on certain medicalequipment and devicesequipment and devices

Customs duty exemption on specific personal medical aids likecrutches, wheel-chairs, walking frames, artificial limbs

Customs duty, excise duty and CVD exemption on specific medicaldevices such as talking books, Braille computer terminals, etc.

Page 32: Healthcare Sector in India

OUTLINE

Healthcare Sector in IndiaHealthcare Sector in India

Current ScenarioCurrent Scenario

Growth DriversGrowth Drivers

Public vs Private sectorPublic vs Private sector

Healthcare Value ChainHealthcare Value Chain

Government Policies and IncentivesGovernment Policies and Incentives

Major PlayersMajor PlayersMajor PlayersMajor Players

ChallengesChallenges

Future GrowthFuture Growth

gg

Business OpportunitiesBusiness Opportunities

Page 33: Healthcare Sector in India

GOVERNMENT INSTITUTIONS

Major Government institutions in healthcare

All India Institute of Medical Sciences (AIIMS), NewDelhi (Central Government)Armed Forces Medical College (AFMC), Pune (Ministryg ( ), ( yof Defence)JIPMER, Pondicherry (Central Government)Madras Medical College (MMC), Chennai (StateGovernment)Maulana Azad Medical College (MAMC), Delhi (StateGovernment)Stanley Medical College Chennai (State Government)Stanley Medical College, Chennai (State Government)Grant Medical College, Mumbai

Page 34: Healthcare Sector in India

MAJOR PRIVATE HOSPITAL CHAINS

Hospital Speciality Services Size Global Forays

Apollo Hospitals

Open heartsurgery, angioplastic surgeryand renal

130 retail pharmacies across India

40 hospitals with 6,000 beds

Existing overseas facilities in Colombo andMiddle East

Plans to set up hospitals in Mauritius andFijiand renal

transplantsFiji

Bidding for a diagnostic facility in the UKApollo-Gleneagles Hospitals, a joint

venture between Apollo Hospitals andParkway Group of Singapore, plans 2 morehospitals in India, after the first set up atK lk tKolkata

Business opportunities in West Asia andNorth Africa

Partnership with Yemen’s Hayel SaeedAnam Group to provide advisory services forits hospital project

Will provide consultancy to set up a 160-bed super specialty hospital at Taiz, Yemen.

Wockhardt Hospitals

Tertiary level heart centre

Product and services formulations, nutritional

10 hospitals with 1500 beds

•Eyeing markets in Europe, particularly UK•Building tie-ups with leading healthcareinsurance providers in the US, UK andSingapore

products, vaccines, pharmaceutical ingredients, bio pharmaceuticals

Singapore

Fortis Provides the Super speciality 12 hospitals Fortis Healthcar

e

Provides the latest medical care to patients

Super speciality hospital

12 hospitals with 1,900 beds

N.A

.Cont…

Page 35: Healthcare Sector in India

MAJOR PRIVATE HOSPITAL CHAINS

Hospital Specialty Services Size Global Forays

Max Healthcare

Focusing on becoming th l t

3-tier business model for delivering h lth i

7 hospitals with 800 b d

Trying to enter the US, UK and far-eastmarkets.

the largest healthcare player in India

healthcare services beds Expanding operations in neighbouringcountries like Bangladesh and Afghanistan.

Max Healthcare and Singapore GeneralHospital (SGH) have entered into collaborationfor medical practice, research, training andeducation in healthcare services.

Aravind Hospitals

Single largest provider of eye surgery in the world

Operates an international research foundation and a resource and training centre

5 hospitals and a manufacturing center for ophthalmic

N.A.

products

*Escorts Group

World class treatments

Diagnostic services, treatment services,

20 hospitals and 8 p

for heart ailments

Preventive cardiology and Rehabilitation services and Pediatric heart care

facilitation centres

N.A.

*Escorts group has been taken over by Fortis Healthcare (Ranbaxy Group)

Page 36: Healthcare Sector in India

PRIVATE SECTOR INFRASTRUCTURE

Leading Hospital ChainsLeading Hospital Chains

Group No of beds

Apollo 2,164

Manipal 3,858

Fortis 1,790

Max Healthcare 750Max Healthcare 750

Wockhardt 700

Page 37: Healthcare Sector in India

FOREIGN COLLABORATIONS

Global real estate major Emaar Properties and its Indianpartner MGF group to set up 50 hospitals across Indiap g p p p

Pacific Healthcare Holdings, Singapore – VitaeHealthcare Pvt Ltd for setting up medical centre inHealthcare Pvt Ltd for setting up medical centre inHyderabad (Andhra Pradesh)

Parkway Group Singapore Apollo Hospitals set up aParkway Group, Singapore – Apollo Hospitals set up a325-bed super-speciality Apollo Geneagles Hospital,Kolkata

Prexus Health USA’s through its Indian subsidiary isplanning state-of-art hospitals around Delhi

Page 38: Healthcare Sector in India

OUTLINE

Healthcare Sector in IndiaHealthcare Sector in India

Current ScenarioCurrent Scenario

Growth DriversGrowth Drivers

Public vs Private sectorPublic vs Private sector

Healthcare Value ChainHealthcare Value Chain

Government Policies and IncentivesGovernment Policies and Incentives

Major PlayersMajor PlayersMajor PlayersMajor Players

Future GrowthFuture Growth

ChallengesChallengesChallengesChallenges

Business OpportunitiesBusiness Opportunities

Page 39: Healthcare Sector in India

FUTURE GROWTH

By 2012, revenues estimated to reach USD 52-69billion, 6.2 to 8.5 per cent of GDP; employment willd bldouble

The pattern of healthcare spending will also change

The share of outpatient spend will decrease from 61 percent to 53 per cent

Lifestyle diseases will drive the growth of outpatient spendLifestyle diseases will drive the growth of outpatient spend

Cancer and heart diseases will drive most of the growth ofinpatient spend

80,000 additional hospital beds required every year forthe next 3 to 4 years to meet growing demands

Page 40: Healthcare Sector in India

INVESTMENTS IN HEALTHCARE

77,962

70,00080,00090,000

n

38,824

20 00030,00040,00050,00060,000

USD

Mill

ion

7,828

010,00020,000

2006 2009 2012Year

Investment in healthcare to grow nearly 11 times to touch USD 77 billion in 2012

Page 41: Healthcare Sector in India

OUTLINE

Healthcare Sector in IndiaHealthcare Sector in India

Current ScenarioCurrent Scenario

Growth DriversGrowth Drivers

Public vs Private sectorPublic vs Private sector

Healthcare Value ChainHealthcare Value Chain

Government Policies and IncentivesGovernment Policies and Incentives

Major PlayersMajor PlayersMajor PlayersMajor Players

Future GrowthFuture Growth

ChallengesChallengesChallengesChallenges

Business OpportunitiesBusiness Opportunities

Page 42: Healthcare Sector in India

CHALLENGES

The growing demand for the quality healthcare and theabsence of matching delivery mechanisms pose a challengeg y p gand certainly a great opportunitySeveral barriers need to overcome to attract sizeable privateinvestment in healthcare…

Unwillingness of lending institutions to finance healthcareprojects due to failures in early ’90sCapital intensive industry with long gestation periodPoor availability of doctors, nurses and paramedicpersonnelInability to lower prices to attract required number of

ti t b f fi d t f tti f ilitpatients because of fixed cost of setting up a facilityLow availability of qualified practitioners in rural areas

Page 43: Healthcare Sector in India

CHALLENGES

No clarity within various government departments andministries about issues faced by the healthcare industry

Low consumer awareness about differences in quality of careacross different provider types

By 2010, 4,53,785 doctors and 1,290,174 more nurses will berequired by the Indian Healthcare Industry, which is both abig challenge and an opportunity

Page 44: Healthcare Sector in India

OUTLINE

Healthcare Sector in IndiaHealthcare Sector in India

Current ScenarioCurrent Scenario

Growth DriversGrowth Drivers

Public vs Private sectorPublic vs Private sector

Healthcare Value ChainHealthcare Value Chain

Government Policies and IncentivesGovernment Policies and Incentives

Major PlayersMajor PlayersMajor PlayersMajor Players

Future GrowthFuture Growth

ChallengesChallengesChallengesChallenges

Business OpportunitiesBusiness Opportunities

Page 45: Healthcare Sector in India

HEALTH–COMPARATIVE STRENGTHS

Key Competencies Key Outsourcing Areas in focus

IndiaHigh Quality Talent poolProven Track recordFavorable Governmental Policies for healthcareCost savingsConventional Medicinal Facilities like AyurvedaHigh Quality infrastructure

Medical TourismHealthcare Customer careNetwork supportHealthcare BPO outbound Healthcare analytics

Philippines Cost BenefitsThe US accent Talent poolThe cultural affinity with US

Healthcare Customer Care

China Bigger talent pool at a lower costHigh end medical facilitiesConventional Chinese medicine

Healthcare Customer CareNetwork SupportTraditional medical facilities

Eastern EuropeQuick deploymentHigh Quality output and FacilitiesCost savings

Oral and Surgical facilities especially in OphthalmologyHealthcare Customer serviceHealthcare BPO outbound

S i i d lThailand Service oriented cultureHigh Quality facilities at low prices

Medical Tourism

Page 46: Healthcare Sector in India

BUSINESS OPPORTUNITIES

India needs an investment of USD 203 billion to meet the ‘Healthfor All’ target by 2010Significant requirement in increase in number of beds per 1000population – from 3 beds per 1000 population to 5 beds per1000 population by 2010 (in both private and public)This translates to an addition of 2 2 million beds requiringThis translates to an addition of 2.2 million beds requiringinvestment of USD 77.9 billion, majority of which will come fromthe private participationIncreasing preference for private medical care amongst theurban populationHigh growth domestic market arising from increasing healthawareness

d h dRapid growth in private sector companies owning and managinghospitalsCost of advanced surgeries in India is about 10 per cent of that inUSAService Providers: Curative and preventive in primary, secondary andtertiary care

Page 47: Healthcare Sector in India

BUSINESS OPPORTUNITIES

Medical Equipment

Market size estimated at USD 2 billion in 2006Market size estimated at USD 2 billion in 2006Growing at a rate of 15 per cent, expected to touch USD 4.9billion in 201265 per cent of equipment is importedMajor suppliers include Siemens, GE, Philips, Toshiba, Hitachi,Boston ScientificCardiology equipment - 20 per cent of total market Imagingsystems - 15 per cent of total marketsystems 15 per cent of total marketDriving forces

Investments in specialty hospitals and diagnostic centresCompetitionCompetitionUp gradation of equipmentFavorable government policies- reduction in import dutiesExpanding market boundaries

Page 48: Healthcare Sector in India

BUSINESS OPPORTUNITIES

Medical Equipment Market Size

4,977.985,000.00

6,000.00

nRising 15 %

per year

2,176.68

3,275.42

2,000.00

3,000.00

4,000.00

USD

Mill

ion

0.00

1,000.00

2006 2009 2012

YYear

Medical equipment requirement to touch USD4.9 billion in 2012

Page 49: Healthcare Sector in India

BUSINESS OPPORTUNITIES

Medical Equipment: Market Distribution

3%19%

52%26%

Medical furnitures Equipment Consumable Orthopaedic productsMedical furnitures Equipment Consumable Orthopaedic products

Page 50: Healthcare Sector in India

BUSINESS OPPORTUNITIES

Page 51: Healthcare Sector in India

BUSINESS OPPORTUNITIES

Health Insurance

Health insurance market is estimated at USD 2.8billionMore than 80 per cent of the expenditure onp phealthcare is out of pocketOnly 3 per cent of country's population is covered byinsuranceExpected growth rate of 13 per cent per annumPrivate and public players registered a growth of 77per cent and 25 per cent over 2004-05S i R ti t t ti l f USD 7 700 illi iSwiss Re estimates a potential of USD 7,700 million inhealth insurance premium by 2015

Page 52: Healthcare Sector in India

BUSINESS OPPORTUNITIES

Health Insurance Market

7.7 bn

56789

illio

nOnly 3% of country's

population is covered by insurance

2.8 bn

012345

USD

Bi

2007 2015

Health insurance market at USD 2.8 billion - Only 3 per cent of country'spopulation covered by insurance - a potential of USD 7,700 million inhealth insurance premium by 2015

Page 53: Healthcare Sector in India

BUSINESS OPPORTUNITIES

Affluent middle-class population willing to pay for higherstandards of healthcareForeign Direct Investment (FDI) limit in health insurance maybe raised from 26 per cent to 49 per centThird Party Administrators business has also witnessedgrowth

Private players in Health insurance

Royal Sundaram9%

Cholamandalam4% Tata AIG

6%

Reliance

HDFC Chubb1%

Bajaj Alliance18%

ICICI Lombard50%

2%

Iffco Tokyo10%

50%

Page 54: Healthcare Sector in India

BUSINESS OPPORTUNITIES

Medical Tourism

- Healthcare tourism market, currently at USD 450 million, expected to bring in over USD 1.5 billion revenues by 2012 2012

- Attracts patients from South East Asia, Africa, MiddleEast UK and USEast, UK and US

- Number of tourists visiting India increased from 10,000 in2001 to 150,000 in 20052001 to 150,000 in 2005

Page 55: Healthcare Sector in India

BUSINESS OPPORTUNITIES

Medical Tourism

14801500

2000io

n

CAGR 22%

450500

1000

USD

Mill CAGR-22%

02006 2012

Medical Tourism market to grow at a Compound Annual Growth Rate of 22 per cent to touch USD 1.48 billion in 2012.

Page 56: Healthcare Sector in India

BUSINESS OPPORTUNITIES

Clinical Research

Present market size around Rs 1 billion (USD 25 million)Present market size around Rs 1 billion (USD 25 million)Expected to grow to Rs 50 billion (USD 1.25 billion) by 201050 per cent Contract Research Organisations in India at present

L b t & Di ti S iLaboratory & Diagnostic Services

India becoming a competitive outsourcing destination for high-end laboratory and diagnostic testingD L l' P hl b M li H l h S i SRL R bDr Lal's Pathlabs, Metropolis Health Services, SRL Ranbaxy –some diagnostics chains catering to the high-end services forhospitals in the UK, the US and West Asia

Page 57: Healthcare Sector in India

BUSINESS OPPORTUNITIES

Healthcare BPO and IT

Healthcare industry under pressure due to regulations and theHealthcare industry under pressure due to regulations and theneed for cutting costs

Huge potential for Indian IT companies to tap this market

BPO opportunities in more advanced sectors such as imaging,disease management and claims processing

Need for transformation into paperless and film-less environmentby corporate hospitals and big trust hospitals

Page 58: Healthcare Sector in India

BUSINESS OPPORTUNITIES

Radiology Outsourcing

Indian corporate hospitals are in talks with hospitals in US andIndian corporate hospitals are in talks with hospitals in US andUK, who are interested in outsourcing radiology workRadiology images can be transferred to Indian hospitals througha dedicated line, which can be analysed by the Indian doctors

d t b kand sent backRadiology outsourcing to Indian hospitals can cut down cost by50 per cent or lessThe 12 hour time difference with India enables the hospitals inpthe US to work 24x7

Page 59: Healthcare Sector in India

BUSINESS OPPORTUNITIES

Total Healthcare Outsourcing

7400

600070008000

Growing at 11% Per annum

3700

20003000400050006000

USD

Mill

ion

01000

2006 2012

Year

Page 60: Healthcare Sector in India

UPCOMING PROJECTS

Naresh Trehan’s MedicityRs 12 billion project in Gurgaon (near Delhi), spread over 93acresacresWill consist of 1600 beds, with a complete biotechnology backupand R&D facilityWill have major institutions for cardiology, oncology, bone andjoint, neurosciences, regenerative medicine and trauma care

Fortis MedicityRs 12 billion project in Gurgaon, having 2 campusesHospital campus will have high end multi speciality hospital andHospital campus will have high end multi speciality hospital andresearch centreCollege campus will have a medical college, a dental college,nursing college and facility for primary and applied research inmedicine along with a 600-800 bed hospital

Madras Institute of Orthopaedics and Traumatology(MIOT) Medical City

MIOT Hospitals plans to set up a multi speciality medical cityMIOT Hospitals plans to set up a multi speciality medical citynear Chennai

Page 61: Healthcare Sector in India

UPCOMING PROJECTS

Apollo Health CityR 10 billi j i H d b d d 33Rs 10 billion project in Hyderabad, spread over 33 acresHas a postgraduate college for doctors, a nursing school andcollege, college of physiotherapy, institute of hospitaladministration, institute of medical informatics, institute foremergency medicine and institute for paramedicsemergency medicine and institute for paramedicsHas 500 beds and 200 more will be added in next 6 months

Dhirubhai Ambani Health CityR li A il Dhi bh i A b i G i t t d i b ildi 60Reliance Anil Dhirubhai Ambani Group interested in building a 60acre health city in Kolkata

CMC Ajit Singh Lottery MedicityRs 500 million medicity project in Ludhiana by the ChristianRs 500 million medicity project in Ludhiana by the ChristianMedical College and HospitalWill have a general and a speciality hospital and an educationinstitute

Page 62: Healthcare Sector in India

INVESTMENTS PLANNED

N E t tNew Entrants

New Hospital Investment Proposed (Rs million)

A t i 5000Artemis 5000

Prexus Health, USA 2500

Emaar MGF 30,000

Pacific Healthcare 750

Parkway group 2000

C l bi A i 6600Columbia Asia 6600

Page 63: Healthcare Sector in India

DRIVERS OF M&A

Proactive government policies – Infrastructurestatus to healthcare, financial incentives etc.

Demand for quality healthcare in India

Health insurance leading to higher spends on healthHealth insurance leading to higher spends on health

Synergies between Indian and foreign firms

Need for benchmarked foreign technology

Investment opportunities for global PE and VC firmsg

Medical equipment industry open to foreign collaboration

Page 64: Healthcare Sector in India

EXPANDING INDIAN MARKETEXPANDING INDIAN MARKET

Healthcare industry will grow at 13 percent per annum

Assured return of 15-20 per cent annually

Annual Demand for 80,000 bedsAnnual Demand for 80,000 beds

Private sector accounts for 52 per cent of all hospitalization p

Page 65: Healthcare Sector in India

VALUE PROPOSITION

Some options for investment are

Medical Infrastructure

Clinical Research

Healthcare BPOHealthcare BPO

Indian medical institutions can commit assured supply ofmanpower - doctors, nurses, paramedics

Conduct joint research in medical delivery, clinical trialsj y,etc – Ability to generate large volumes and an easier regulatory regime

Access Indian capability in IT in the medical arena

S di l i f i b i I diSet up medical equipment manufacturing base in India

Leverage cost advantage for Medical Value Travel