|
Healthcare Industry Witnessing Major Transition Ever
The Indian healthcare industry is gearing up for a big leap
and the transition from the traditional way to the future healthcare delivery
system is bringing in business opportunities, says Sachin Chaudhary
Industry analysts are expecting some important trends to arrive, which would change the face of healthcare delivery in times
to come. The sunrise industry has witnessed foray of corporate players, international
accreditations, reverse brain drain, world-class infrastructure and the era of
responsive care in the last one decade. Common man has seen paradigm shift in
various service sectors like aviation, hospitality, entertainment and telecom.
This has brought in international standards, price war, quality services, and
various options for individuals. In healthcare, insurance companies, medical tourism,
preventive healthcare, BPOs, telemedicine, health information technology, consulting
services, laboratory & diagnostic services, and medical devices industry,
all these should expect good business opportunities in the near future.
Demand And Supply
As per the CII-Mckinsey Industry Analysis Report, demand is expected
to outstrip supply over the next decade. Almost 80,000 additional hospital beds
will be required every year for the next three to four years to adequately meet
growing healthcare demands. The government, traditionally the largest healthcare
provider, is now under pressure to meet evolving and rising demands for healthcare
services across the country.
The healthcare industry's size is estimated at USD 20 billion and can increase to USD 60 billion by 2010. The report predicts
it will grow at a rate of 13 per cent annually, which will enable healthcare providers
to secure a return of 15-20 per cent on their capital employed. This demand-supply
interaction has created conditions for increasing private/voluntary sector participation
in healthcare delivery.
Key Business Drivers
Gone are the days when healthcare used to be perceived as quasi-social responsibility, it is a profit-making
business venture in itself now. Consumer demands, consumer awareness, thrust for
quality and value for money, changing disease pattern, changing socio-economic
profile and lifestyle patterns, demand for quality healthcare, corporatisation,
increasing penetration of private health insurance, foreign alliances, IT in healthcare
are few business drivers that have resulted in restructuring of Indian healthcare.
Early Transition Effects
Customer outlook: Indian economy is growing at a rate
of seven per cent, which has resulted in more cash flow in the hands of Indian
customers. Increasing purchasing power and available options of delivery have
made patients very impatient. These days, impatient patient demands augmented
services besides just getting quality core product/services.
Payment model: 'Cash and Carry' model of payment is
slowly taking a backseat and 'third party payment' is gaining importance. Third
party payment facilitates cashless transaction by giving credit facility. Cashless
facility for the insured person means he can just walk into a network provider
of his preference for the cashless hospitalisation.
Standardisation of pricing: The fragmented nature of
healthcare sector in India makes pricing very critical, since it varies widely
depending on the provider and the location. As per classification of city and
grading of hospitals, insurance companies are classifying hospital packages
into standardised slabs. TPAs are pursuing this scheme of standardisation, but
providers have not welcomed this initiative of IRDA or insurance companies.
From in-patient care to daycare: Growing health consciousness
among middle and high-income families in India, together with technology growth
in healthcare has shifted focus from inpatient treatment to outpatient/daycare
treatment.
Accreditation & use of IT: The accreditation and
use of IT is slowly but steadily coming to an age. Factors like increasing competition,
entry of private insurance, and expanding clientele market to the tertiary zone
of international boundaries are driving these trends. Most of the big hospital
chains have already identified these needs and are in the process of automating
their services. Indian flagship hospitals like Wockhardt and Apollo won accreditation
from Joint Commission International in the last few months and many more are
in queue.
Business Opportunities
Health insurance & TPA: Integrated healthcare business
model, which is prevalent in developed countries, is beginning to make roads
in our country. According to estimates, more than 80 per cent of the expenditure
on healthcare is out of pocket in India. Approximately, three per cent of country's
population is covered by insurance of some form or other. India's strong middle
class can afford insurance. Expected growth in health insurance is around 13
per cent per annum. The increasingly affluent and strong middle-class population
of 100 million is demanding and willing to pay for higher standards of healthcare.
With the growing insurance market, we have seen growth in the TPA's business
as well. There are over 20 licensed TPAs. According to provisions of IRDA, every
regional office of the insurance company has to appoint TPAs to take care of
policy holders for cashless services.
Medical Tourism
CII-McKinsey study shows that at its current pace of growth, healthcare tourism alone can rake
in over USD 2 billion as additional revenue by 2012. India offers world-class
healthcare that costs substantially less than that of developed countries. For
instance, heart surgery costs USD 30,000 in the US and just USD 8,000 in India,
using the same technology delivered by competent specialists attaining similar
success rates. Medical tourism in India has evolved at a great pace and the Indian
sub-continent attracts patients from SouthEast Asia, Africa, Middle East, the
UK and the US.
Preventive Healthcare
Growing health consciousness among
middle and high-income families in India is heralding
a new business opportunity - preventive healthcare.
This has shifted focus from in-patient treatment to
a regular preventive health check. Corporate companies
offer annual health check for their employees; insurance
companies conduct pre-insurance policy check; and self
paid health checks also give out a potential business
opportunity.
Healthcare BPO
The global healthcare industry is increasingly under pressure due to regulations
and the need for cutting costs, which warrants huge potential for Indian IT companies
to tap this market. We can capitalise on the BPO opportunities, existing at least
in the more advanced sectors of healthcare such as imaging, disease management
and claims processing.
Telemedicine: Tele-consultation and remote-patient-monitoring
is taking a big leap in India to integrate fragmented healthcare industry. Technology
of treating patients while the patient and doctor are geographically distant
is best suited for Indian healthcare scenario, where cost and accessibility
of quality care for a section of society is still a big question.
Healthcare IT: The health informatics market in India
is on the verge of a rapid growth phase. Corporate hospitals and big trust hospitals
have realised the need to transform themselves into paperless and film-less
environment. Increasing competition, both global and local, with the entry of
corporate hospitals and international ventures will be one aspect of fueling
this segment. Application of information technology in healthcare will restructure
the whole system with standardised workflows, medical record maintenance, real
time patient monitoring, remote patient monitoring, decision support, knowledge
management for patient and physicians, tracking of equipment and supplies, cost-effective
patient transaction, patient education, and improved decision support for the
management.
Laboratory & diagnostic services: India is becoming
a competitive outsourcing destination for high-end laboratory and diagnostic
testing. Dr Lal's Pathlabs, Metropolis Health Services, SRL Ranbaxy are few
of the diagnostics chains catering to the high-end services for hospitals in
the UK, the US and West Asia. It is very cost effective for them to outsource
these investigations to Indian providers, which is almost 70-80 per cent less
expensive than the US laboratories.
Medical devices: The medical equipment market is the
direct beneficiary of the boom in healthcare industry. Cardiology equipment
accounts 20 per cent of total market followed by imaging systems, which constitutes
about 15 per cent of total market. Driving forces are new investments in super-specialty
hospitals and diagnostic centres, competition, existing setup upgrading their
equipment, favourable government policies such as a reduction in import duties
on medical equipment, expanding market boundaries etc.
The
emerging industry structure is headed towards providing healthcare services as
an integrated comprehensive package rather than the traditional concept of providing
healthcare infrastructure and reactive medical care. Recession free industry is
estimated to grow at a rate of 13 per cent per annum, which offers sufficient
incentives for new players. With globalisation spreading its wings, we have seen
national boundaries getting shorter day by day and with accreditations coming
in, Indian healthcare is emerging as a 'Global Doctor'.
The author is a Healthcare Consultant with Infosys Technologies,
Pune.
Email: sachin_chaudhary@infosys.com
|
