Healthcare sector in India – Another economy booster

As the buying and expenditure power of middle-class strata is increasing in India so is the growth of all the related industries and sectors in India. Healthcare is one of the sectors in our country that has seen a tremendous growth in the past few decades and expected to grow further. In the year 2012, the total value of healthcare sector in India that includes medical infrastructure and devices, outsourcing, clinical trial, telemedicine, medical equipment and health insurance was US$ 79 billion and it is expected to reach US $ 160 billion by 2017. Between 2000-2009, the healthcare sector of India has registered a growth of 9.3%. With such an immense growth, healthcare industry in India is competing with the IT as well as pharmaceutical industries.

Increasing demand for high level medical services, increased awareness, growth in infrastructure, increase in income, reimbursement schemes, insurance policies, etc are leading to the growth of healthcare sector in India. Moreover, there is a shift from infectious to lifestyle related diseases in India that need more expenditure for the treatment.

Also, the healthcare sector in India is the largest industry in terms of revenue and it is the second largest in terms of employment. Both private as well as public sectors operate Indian healthcare industry but private sector being the major provider of healthcare services in India.

With this, medical tourism is also getting the required boost and it is expected that this industry will touch US$ 2 billion by 2015. Patients are coming from Africa, Gulf and SAARC nations, Myanmar, Pakistan mainly for organ transplant, cardiac and orthopedic problems. The biggest strength for the growth of medical tourism in India is the skilled doctors and English speaking manpower. As per the study conducted by the Confederation of Indian Industries (CII), Chennai is the most favorite spot for medical tourism in India.

Private players are making significant investments in this sector by setting up private hospitals. Share of private sector in the healthcare delivery industry is 80% whereas government sector is 20%. The Government of India has also decided to raise the health expenditure and by the end of the Twelfth Five Year Plan (2012-17) this will be 2.5 per cent of gross domestic product (GDP). Among all the developing countries, Indian Government Expenditure on healthcare is the highest. All India Institute of Medical Sciences (AIIMS) in New Delhi, Armed Forces Medical College (AFMC) Pune, Madras Medical College Chennai, Maulana Azad Medical College (MAMC) Delhi, Grant Medical College Mumbai are some of the major government institutions in healthcare sector. In private sector Apollo Hospitals, Fortis Healthcare, Max Healthcare, Aravind Hospitals are among the major players.

Healthcare sector is also one of the most leading sectors to provide employment. Approximately 4 million people are employed in healthcare and its related sectors. Moreover, career in healthcare is considered as one of the noblest profession. By looking at the growth, many foreign companies are now interested in investing in this industry. According to the Department of Industrial Policy and Promotion (DIPP), FDI worth US$ 1.70 billion has been attracted by the drugs and pharmaceuticals sector between from the year 2000 to the year 2010, whereas FDI worth US$ 786.14 million in the same period has been attracted by the hospitals and diagnostic centres.

With an aim of providing quality healthcare for all, Government in 2005 has launched National Rural Health Mission (NRHM). For good institutional deliveries, more than 50 lakh women have been brought under the Janani Suraksha Yojana (JSY). Number of doctors, nurses and para medical staff has been increased in number.

But apart from all this growth and development, 50% of the population in India still does not have direct access to healthcare facilities. India has the highest infant mortality rate. Specialized services are available in only 2% of the hospitals. If we talk about good healthcare facilities, then these are available only in metros. Lack of infrastructure, mismanaged public hospitals and lack of commitment in certain cases are other issues of concern in the healthcare sector of India.

There is a growing demand for better healthcare facilities in India but certainly absence of matching the quality expectations is a great challenge as well as opportunity. Other key opportunities in healthcare sector of India are hospital services, medical tourism, pathology services, medical devices manufacturing, telemedicine and health insurance. If all the hidden and untapped opportunities are tapped then healthcare industry in India can surely become the major economy booster of our developing nation.