Healthcare in India has always posed big questions around accessibility and affordability for most of its population. 70% of hospital infrastructure is limited to top 20 cities as there is a great disparity between urban & rural areas. The availability of qualified doctors, nurses and hospital beds per thousand population are 0.7, 1.3 and 1.3 respectively as against 1, 2.5 and 3.5 recommended by WHO. Despite this huge unmet demand and headroom for growth, the threefold jump forecasts to $372B by 2022 seems doubtful considering the current slowdown.
India only spends 4.7% of GDP on healthcare cumulatively with just 1.4% coming from public sector which is lowest in the world. With growing incidence of lifestyle diseases, rising healthcare delivery costs, growing health insurance penetration, there is a need to find affordable and transparent delivery solutions. Technological advancements and government initiatives will play a key role in driving healthcare market in India.
Healthcare industry has typically lagged other sectors when it comes to technology deployment, however this is fast changing. There is a fundamental shift from ‘volume of care’ to ‘value of care’ with the evolution in disruptive digital technologies that promises to address the gaps in the Indian healthcare system. Burdened with margin pressures due to price control and cost escalations, several players are actively using technology to improve productivity as well as quality on outcomes.
Further, the digital wave has empowered patients and created a new breed of demanding consumer, thus forcing healthcare providers and insurance companies to move from a ‘provider and health system’ driven model to one that’s more ‘customer centric’.
As health delivery organizations begin to focus efforts into this new and expanded care continuum, investment opportunities related to tech embedment and product design are expected to drive new investments. However, despite the multiple disruptive solutions and innovations, very few models have been able to scale up successfully.
According to VCCEdge, the sector has consistently attracted $1-2 billion of private investment and $3-5 billion of M&As over the last several years.
• By 2020, India is expected to rank amongst the top 3 healthcare markets in terms of incremental growth
• By 2020, the healthcare information technology market is expected to grow 1.5 times from current $ 1 bn
• By 2022, the diagnostics market is expected to grow at a CAGR of 20.4% to reach $ 32 bn from $ 5 bn in 2012
To discuss the business opportunity and the emerging challenges, VCCircle is organising its next edition of Healthcare Investment Summit on October 11 in Mumbai.