Just a dose of healthcare statistics

Dhiraj Sharma

Healthcare is one of the most essential services in any growing society. Propelled by an affluent and health conscious growing middleclass, the healthcare industry in India grew by more than 13 per cent per annum in the last decade.

Market

India’s healthcare industry is estimated at Rs 1,500 billion or USD 34 billion. This works out to USD 34 per capita which is 6 per cent of GDP. Of this 15 per cent is publicly financed, four per cent is from social insurance, one per cent private insurance and the remaining 80 per cent being out of pocket as user fees (80 per cent of which goes to the private sector). Two thirds of the users are purely out-of pocket users and 90 per cent of them are from the poorest section.

Healthcare statistics

India has 5,03,900 doctors, 7,37,000 nurses, 162 medical colleges, 143 pharmacy colleges and 3,50,000 chemists. There are 15,097 hospitals accounting for 8,70,161 hospital beds in India. There is an extensive three-tiered government healthcare infrastructure comprising 23,000 Primary Health Centres(PHC) and 1,37,000 sub-centres serving the semi-urban and rural areas and 3000 (CHC) Community Health Centres-(Source: OPPI 2000 Estimates)

India stands

• India’s health expenditure is 5.6 per cent of GDP, whereas most established market economies spend 7-10 per cent of GDP on health. USA spends over 14 per cent.
• US has 2,340 doctors as compared to India’s 143 doctors for very 10,000 people
• On an average, 80 out of every 1,000 children die. This figure is just 9 in the US and 30 for every 1,000 in Thailand.
• Life Expectancy in India is amongst the lowest at 55.5 years compared to US at 75.5 years and 66.5 years for Thailand.
• Compared to Brazil’s 4300 beds, India has only 1,600 beds.

Potential

The potential of health services sector is immense in India as there are more than 140 million upper and middle class, growing at over four per cent per annum with combined annual income of over Rs 820,000 crore.

These people have confidence in healthcare products and services offered by private hospitals. The quality of healthcare has improved considerably with the availability of world class high-tech medical equipment and information technology. However, the low penetration of health insurance is limiting the growth of these world-class services.

Privatisation of insurance sector has led to spurt in health care services. Less than 10 per cent of the Indian population is covered by some form of health insurance. Insurance is expected to be the main driver for raising quality consciousness and increased demand for better standards, hospital accreditation and Patient / Management Information Systems.

The voluntary health insurance market estimated at Rs 4 billion is expected to be Rs 130 billion by 2005.

The healthcare business for IT services comprises of players like government, insurance companies, consumer and corporate hospitals is about Rs 500 crore which is a pittance compared to the contribution of healthcare industry to national GDP which is growing at a rate of about 10-15 percent annually.

The MBPO (medical business process outsourcing) will be the next boom the Indian knowledge economy will witness as it has massive potential for outsourcing within the US healthcare industry. This time outsourcing won’t be the once fashionable and now dead medical transcription, but would be more for processes like medical billing, claim processing, disease coding and forms processing which easily gives returns of USD 16-18 per person per hour, much higher than the billing rates in other BPO verticals.

According to a Frost and Sullivan Study, the Indian medical hardware market (equipment and devices) is estimated at Rs 65.32 billion in 2001, growing at 12 per cent per annum, which is almost double the market size in 1993.

With India becoming a healthcare destination, Health Tourism Industry, stands at Rs 1200-1500 crores, and growing at a rate of 30 per cent annually is bound to grow at a more faster rate.

Lower production costs and skilled workforce has attracted multinationals to set up R & D and production centres in India. In the long run these R&D centres will help develop low-cost medicines for the Indian market. The Astra-Zeneca centre in Bangalore is a testament to this.

The road ahead

In order to capitalise on all these opportunities, we have to create a conducive environment by:

Attracting investment

• Granting infrastructure status to the healthcare sector.
• Create fiscal policies, like providing low interest rate loans, introducing tax holidays for investment in low per capita income states, reducing import/excise duty for medical equipment, et cetera, to promote investment in healthcare services.
• Facilitating various clearances and certification like medical registration number, building number, anti-pollution certificate etc.

Changing the legislation

• Mandating the employers to buy group or individual medical insurance for their employees to ensure a certain minimum financial coverage.
• Mandating the private sector units, that take advantage of improved fiscal policies, to commit resources to remote rural/under developed sectors.
• Create an autonomous body to standardise on medical messaging, codes and vocabulary, content and format, identification standards and security.
• Mandate the healthcare service providers to transmit selected patient data to the government for analysis. This data will be analysed to identify trends and evolve policies.
• Create a national database of health care providers, their facilities and services. This will create awareness among the population towards quality health care.
• Streamline the process of handling patient grievances.
• Create a nation-wide agency to deal with patient requests like ambulance hotline, emergency/first-aid consultation, trauma help-line etc.

IT initiatives

• Sharing of patient information between providers, with patient and payers.
• Security and privacy services.
• Need for standards for messaging, codes and vocabulary (CPT, ICD), content and format standards (MR, lab report)

To witness a successful revolution in healthcare, we need to bring these arrays of activities together. If this works for India over the next decade, the vast population living in rural and urban areas will bear the fruit of success

“If Information is Power, Health Information is Life.”

The writer is a business analyst with FCG Software Services (India) Pvt. Ltd.

Email:dsharma@fcg.com