Healthcare has become one of India’s largest sectors – both in terms of revenue and employment. The industry comprises hospitals, medical devices, clinical trials, outsourcing, telemedicine, medical tourism, health insurance and medical equipment. The Indian healthcare industry is growing at a tremendous pace due to its strengthening coverage, services and increasing expenditure by public as well private players.
The Indian healthcare delivery system is categorised into two major components – public and private. The Government, i.e. public healthcare system comprises limited secondary and tertiary care institutions in key cities and focuses on providing basic healthcare facilities in the form of primary healthcare centers (PHCs) in rural areas. The private sector provides majority of secondary, tertiary and quaternary care institutions with a major concentration in metros, tier I and tier II cities.
India’s primary competitive advantage lies in its large pool of well-trained medical professionals. Also, India’s cost advantage compared to peers in Asia and Western countries is significant – cost of surgery in India is one-tenth of that in the US or Western Europe.
The Indian healthcare sector, one of the fastest growing industries, is expected to grow at a compound annual growth rate (CAGR) of 17 per cent during 2011-2020 to touch US$ 280 billion. It is expected to rank amongst the top three healthcare markets in terms of incremental growth by 2020.
Of total healthcare revenues in the country, hospitals account for 71 per cent, pharmaceuticals for 13 per cent and medical equipment and supplies for 9 per cent.
The private sector has emerged as a vibrant force in India’s healthcare industry, lending it both national and international repute. It accounts for almost 72 per cent of the country’s total healthcare expenditure.
Telemedicine is a fast-emerging sector in India; many major hospitals (Apollo, AIIMS, Narayana Hrudayalaya) have adopted telemedicine services and entered into a number of public-private partnerships (PPP). In 2012, the telemedicine market in India was valued at US$ 7.5 million and is expected to grow at a CAGR of 20 per cent to reach US$ 18.7 million by 2017.
The Government of India aims to develop India as a global healthcare hub. It has created the National Health Mission (NHM) for providing effective healthcare to both the urban and rural population.
Investment in healthcare infrastructure is set to rise, benefiting both ‘hard’ (hospitals) and ‘soft’ (R&D, education) infrastructure. India is the largest exporter of formulations with 14 per cent market share and ranks 12th in the world in terms of export value. Double-digit growth is expected over the next five years.