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Final report healthcare industry
1. Healthcare Industry of India 1
HEALTHCARE INDUSTRY
OF INDIA
GLOBAL BUSINESS PROJECT II
FINAL REPORT
Submitted by:
Anjali Raj – 10BSUHH010006
Shikhar Katuva- 10BSUHH010062
Submitted to:
Prof. Girish G P
Date of Submission:
31st March 2012
We confirm that this is our own report and is the final version. We have acknowledged each use
of words or ideas of another person whether written or oral.
2. Healthcare Industry of India 2
Contents
1. Executive Summary 3
2. Introduction 4
3. History 5
4. Objective & Motivation 7
5. Wellness Industry 8
6. Healthcare Industry 9
7. Regulators 11
8. Key Players 12
9. Porter’s Five Force Analysis 13
10. SWOT Analysis 15
11. PESTLE Analysis 16
12. Conclusion & Recommendation 19
13. Appendix
a. Medical Tourism 20
b. Major Healthcare Issues 21
c. Key Developments 22
14. References 24
3. Healthcare Industry of India 3
Executive Summary
―Healthcare Industry of India‖ is a project aimed at analyzing the Healthcare Industry of India
and its future prospects. Healthcare can be Allopathic, Ayurvedic, Homeopathy, Unani, Siddha,
Naturopathy etc. Our project focuses on Allopathy as that is a mainstream medicine in India.
Healthcare contributes to 5.25% of GDP expenditure. There is a very large market potential in
India. Only 20% of this industry potential is tapped. The government cannot afford to spend the
necessary amount and hence it opens up a large area for private investors.
The factors for the boom of this industry are more options in healthcare financing, growing
economy, saturation of other sectors like IT and retail and the different models of healthcare
delivery.
The key players of this industry (on basis of number of beds) are Apollo, Fortis, Manipal,
Aarvind Eye care, Max Hospitals etc. The regulators of this industry are Government of India
Directory of Health and Family Welfare, Ministry of Health and Family Welfare, Indian Council
of Medical Research, Central Drug Standard Control Organization.
Porter’s Five Forces Analysis, SWOT Analysis and PESTLE were done. Indian environment
provides a very good opportunity for private players in healthcare. The growing population with
a much deeper pockets and low government participation has lead to higher demands where
people are willing to pay high costs for proper medical care. India’s unmet demand for
healthcare facilities, rapidly changing demographics, increasing private spending on healthcare,
and a readily available intellectual pool are fuelling the growth of the healthcare industry and
making it highly attractive for investors
4. Healthcare Industry of India 4
Introduction
The health care industry is a sector within the economic system which provides products and
services like diagnosis, treatment and prevention of diseases, illness and injury. Health care is
delivered by practitioners from the fields of medicine, nursing, psychiatry, dentistry and others.
Allopathic healthcare & Ayurveda are the two main forms of healthcare practiced in India.
Homeopathy is also practiced but in comparatively lesser amounts.
Ayurveda, the oldest most comprehensive scientific discipline is known as the knowledge of life
and longevity. It has been preached and practiced since the ancient times. Ayurvedic medicines
have ways to totally rejuvenate the body and mind. All ayurvedic medicines are botanical
preparations and it’s a holistic approach to well being of an individual.
Homeopathy on the other hand is a science developed by a German physician, Dr. Samuel
Hahnemann. It is based on a principle ―like cures like‖. It means that any substance which
produces symptoms in a healthy person can cure similar symptoms in a sick person.
Healthcare can be through products or services and can be provided privately or publicly.
Healthcare sector is said to be the sector which will largely influence the economic growth of the
country along with IT and Education sector. This sector will generate 40 million new jobs and
200 billion in revenue by 2020.
Private healthcare, with hospital chains exploring the markets in tier II cities and metros is an
emerging part of the healthcare sector. Also, the PPP model helps in improving the healthcare
provision of India through development and delivery of low cost, basic healthcare services.
Since the healthcare industry is highly fragmented, the industry is divided among many different
companies. Price levels cannot be influenced by one player as no single firm has large enough
market share to influence price.
The primary demand drivers of the industry are advances in medical care and technology,
increasing life expectancy, patients demanding more services and breakthroughs & population
growth rate. The drivers of profitability are effective management of patient demand, obtaining
grants and funds & referring patients to the most cost effective providers.
Access to health care varies in different countries owing to the influence by the social, economic
and judicial influence. As in, the health care industry is distributed among market participants in
some places while its controlled by the Government at many. Anyhow, according to the WHO
(World Health Organization), for the smooth functioning of the health care industry in any
country, there has to be a robust backing on the financial grounds.
Also, health care forms the pillars of the national economy. Health care is one of the world’s
largest and fastest growing industries. Our main focus for this project is Allopathic care in India.
5. Healthcare Industry of India 5
History
India – A country of rich culture and heritage. Where there was man, there was need for
medicine. Medicine today is a cumulative knowledge gathered for centuries. India, due to her
ancient knowledge and practice initiated the system of healthcare not just through the physical
ailment of the patient but also the environment and other elements.
Unlike modern medicine during those times, medicines were dealt with plants, minerals, stars,
spirits and voodoo. Treatment was done mainly by priests, herbalists, sorcerers and magicians.
Ayurveda
Ayurveda has its origin in the Vedas, particularly the Atharva Veda. It is connected to the Hindu
religion. Ayurveda originated from the 114 hymns of the Atharva Veda. It possibly dates back to
2000 BC. This system of medicine was received by Dhanavantari- the God of medicine from
Brahma.
The present knowledge of Ayurveda is by the texts of Charaka, Sushruta and Vaghbata.
Homeopathy
Homeopathy was founded by Samuel Hahnemann, a German physician in 1790. It was based on
the law of similars. The law of similar was utilized by many cultures like the Chinese, Greek,
Mayan, Native American Indians and Asian Indians. But it was Hahnemann who developed a
systematic medical science out of it. The first Homeopathic school was founded by his students
in the US during late 1800s. Homeopathy gained recognition because it succeeded in treating
disease epidemics like cholera, scarlet fever, yellow fever and typhoid.
Allopathy
In the 1600s, under the reign of the Emperor Akbar, allopathy found its way in India. However,
after 300 years, recognition of allopathy, as a form of medicine came under the Indian Medical
Decree in 1960.
In between the 50s and the 80s, healthcare facilities increased substantially, but the number of
licensed practitioners per 10,000 individuals decreased due to fast population growth.
In the early 70s, vaccinations against diseases like polio and small pox became prevalent. By the
end of the 70s, small pox was declared to have been eradicated from the country.
The end of 80s saw the industry moving towards diagnosis before treatment. Medical education
increased and industry began to grow. This was the time the incidents of cancer increased and
posed problems to the medical community all over the world and the country. There were 128
medical colleges by the end of the 80s.
6. Healthcare Industry of India 6
In the 90s, we struggled with HIV with a mortality rate of over 80% in India. Late 90s saw a rise
in health care costs. During this decade, Indian healthcare grew at a CAGR of 16%. In 1991,
India had 27,400 dispensaries, 22,400 PHC’s and 11,200 hospitals. The primary health centers
relied mostly on trained paramedics. Also, in 1991 there was uneven distribution of medical
facilities in the country. India’s most populated state UP (over 139 million) had 735 hospitals
whereas Kerala (29 million) had 2053 hospitals. In 1992, there were 7,300 hospitals, out of
which 4,000 were owned and managed by the Govt. Another 2,000 owned and managed by
charitable trusts when the other 1,300 were private sector hospitals and in turn, very small
facilities. The major hospitals were a part of the Govt. medical colleges. Lack of sophisticated
medical facilities was common in private hospitals, but the pace of development was very quick.
Today, it is the largest service sector in India.
7. Healthcare Industry of India 7
Objective
To analyze the Healthcare Industry of India.
Motivation
Healthcare is one of India’s largest sectors, in terms of revenue and employment.
The private sector accounts for more than 80% of total healthcare in India.
Health is a sector which will never get affected by recession.
8. Healthcare Industry of India 8
Wellness Industry Analysis (excluding Healthcare)
India's market for "wellness" services is estimated at $2.2 billion, and projected to grow at an
annual rate of 30-35 percent, as per FICCI and Ernst and Young.
Indian youth comprises over 34% of the total population. It is expected to cross over 400 million
by 2015. It forms the core target group for wellness products and services (other than healthcare)
. The population in the urban areas constituted 28% of total population 2001 and is expected to
increase to 37% in 2025. Urbanization leads to higher awareness and higher availability of
wellness products. Stress and lifestyle diseases in the urban areas are driving the growth for
products and services in the enhancement and curative segments.
Exposure to global beauty and fashion is another driver of wellness growth. Society’s obsession
with celebrity culture is resulting in peer pressure to look good.
9. Healthcare Industry of India 9
Healthcare Industry Analysis
The Healthcare industry comprises of both products and services. The products are in the form of
drugs, healthcare equipment & health insurance. Our study focuses on the service segment of the
healthcare industry. Services in the healthcare industry can be diagnostic services, small scale
clinics & full fledged hospitals.
The Indian healthcare industry is projected to grow 23 % per annum. There would be increase in
number of public and private healthcare facilities accounting for another $6.7 billion. This
industry will touch $238.76 bn by 2020.
The expenses of this industry comprise 5.25% of the GDP of the country. In a few years it is
projected to reach 6.2% within the next few years.
Growing population, cheaper treatment costs, increasing lifestyle related health issues, thrust in
medical tourism, improving health insurance penetration, government initiatives, increasing
disposable income and focus on PPP are driving factors for the growth of healthcare sector in
India.
Research says that only 12% of the industry potential has been tapped in our country which tells
us that the scope for growth is very large.
The healthcare industry shows high opportunity for economies of scale. Narayana Hrudayalaya
is the ideal example as to how economies of scale can be achieved in this industry. Through low
cost measures and continuous innovation he has made it a big success.
There is no target customer for this industry. The entire human population is their target. There
are hospitals at every income level targeting people accordingly. The sad part is that the specialty
services are out of reach for a large amount of our population. Even basic health services are
lacking amongst the rural population. The government is taking initiatives but for a country like
India its not enough.
Till few years ago, healthcare was the responsibility of private practitioners and doctor owned
hospitals. Large hospitals were run mostly by the government.
10. Healthcare Industry of India 10
Apollo was the first to start the trend of corporate hospitals. Today, the rapid corporatization of
the industry is due to the movement towards organized healthcare.
The entry barrier in this industry depends on the scale you look at. For a small scale clinic, the
barrier is limited to expertise and basic equipment whereas for a full fledged hospital, the
investments are very high. Expertise and investment are the two main entry barriers in this
industry. Exit barrier is high specialized assets and sunk cost.
The factors for the boom of the Healthcare Industry of India are:
Strong Indian Economy :
India, the 4th largest economy in terms of Purchasing Power Parity will overtake Japan
and reach the 3rd place by 2020.
Opening up of new opportunities in Healthcare Delivery:
Different models are coming up in Healthcare e.g. PPP model, Diagnostics, Family
Clinics etc.
More options for healthcare financing:
Health financing is becoming a preferred tool to cover for most healthcare expenditures.
It involves arranging for payment of a health service that has been arranged under the
financing contract.
FDI in health insurance has rose from 26% to 49% which would result in surge of
international players & even more customized offerings targeting all sections of society.
Saturation of other sectors like retail & IT
11. Healthcare Industry of India 11
Regulators
There are 4 main regulatory bodies in this Industry:
Government of India Directory of Health and Family Welfare
Indian Council of Medical Research
Ministry of Health and Family Welfare
Central Drug Standard Control Organization
12. Healthcare Industry of India 12
Key players in healthcare industry
No. Of
Company Presence
beds
Chennai, Madurai, Hyderabad, Aragonda, Kakindada, Kolkata,
Apollo
Ahmedabad, Mauritius, Pune, Raichur, Karur, Karim Nagar,
Hospitals 8,500
Mysore, Bhubaneswar, Dhaka, Visakhapatnam, Bilaspur,
Enterprise Ltd
Ranipet, Ranchi, Ludhiana, Indore, Bengaluru, Delhi, Noida
Aarvind Eye Puducherry, Madurai, Amethi, Kolkata Theni, Tirunelveli,
3,649
Hospitals Coimbatore,
CARE Hyderabad, Vijaywada, Surat,Nagpur, Pune, Visakhapatnam,
1,400
Hospitals Rajpur, Bhubaneshwar.
Fortis Delhi, Amristar , Mumbai, Bengaluru, Kolkata,Rajpur, Jaipur,
5,044
Healthcare Ltd Chennai, Kota, , Mohali, Noida
Max Hospitals 800 Delhi and NCR
Manipal
Udupi, Bengaluru, Manipal, Vijaywada, Kasaragod,
Group of +7,000
Visakhapatnam, Attavar, Mangalore, Goa, Tumkur
Hospitals
Apollo
Manipal
Fortis
Aarvind eye hospitals
CARE hospitals
Max hospitals
13. Healthcare Industry of India 13
Porter’s Five Forces Analysis
Buyers Power:
Demand is exceeding supply:
India’s demographics are changing, economy is growing, there is a shift in the disease patterns &
awareness of health and fitness is increasing by the day. The demand for healthcare services has
indicated a CAGR of 16%. India still falls short on various key health indicators for e.g. our
hospital beds per 1000 stands at 0.7 whereas the world average is 3.96. There is a big mismatch
between demand and supply of healthcare infrastructure and services in India. India needs to add
over a million beds to increase its ratio to 1.7.
Medical Tourism:
The increase in medical tourism in India has led to reduction on the dependence of Indian
hospitals on local customers.
Suppliers Power:
Equipment Players:
The competition in the equipment market is on a high. Consumables and disposable equipment
are made locally whereas high value equipments are made by international companies. The
companies have expanded their operations to the Indian market and established assembly
centers. The government is encouraging the growth of this market. High competition is turning
out to be beneficial for the hospitals.
Rivalry among Competitors:
Increasing Competition:
The drugs and pharmaceuticals sector has attracted FDI worth $1.66 billion. Hospitals and
diagnostic centers have received FDI worth $761.18 million. Presently the market is fragmented
but the market is changing. The sector is organizing into distinct sectors which are one more
reason the competition is increasing. Investments are increasing by the day as the potential in this
market in India is very high. Only 20% of the market is tapped.
Low Competition from Public Sector:
The share of private sector in India is 78% which is mostly out of reach for the rural and poor
population of the country. An estimate is made that out of the $25.7 billion required to increase
the number of beds, the government is contributing only 15-20% of the amount which is a large
opportunity for private players.
14. Healthcare Industry of India 14
Threat of New Entrants:
Encouraging Government Reforms:
The government does not have the financial strength for large scale investments in the healthcare
sector, government is encouraging FDI in the country.
Barrier for Foreign Firms:
Even though government is encouraging FDI in the country, there are very few FDI hospitals in
India. Other forms of funding are more prevalent. The reason for this can be long gestation
period of investments and relatively low rate of return.
Threat of Substitutes:
Alternative medicines:
Alternative medicine includes Homeopathy, Ayurveda, Unani etc. They are safer and have lesser
side effects as compared to allopathy. The society is moving towards alternative medicine mainly
due to the advantage of painless procedures, lesser side effects, organic medicines etc.
Medical Tourism has seen the shift of people towards Ayurveda. The age old practice is gaining
popularity all over the world. There has been a rise in the amount of people who come to India to
undergo Ayurvedic treatments.
Force High Moderate Low
Buyer’s Power
Supplier’s Power
Internal Rivalry
Entry Barriers
Threat of Substitutes
15. Healthcare Industry of India 15
SWOT Analysis
Strengths
Good Quality Services are available at a low cost
India has a large supply of qualified doctors
India has a strong presence in good quality and advanced healthcare. We also have a
high success rate in operations.
Doctor’s reputation on the international front is very high.
Medical Tourism
Weakness
Delivering healthcare in India is costly.
We have a limited access to life saving medicines
A normal middle class family cannot afford the specialty healthcare
Opportunities
Healthcare Industry has good support from the government.
Major Pharmaceutical companies to choose India as the preferred hub for their global
R&D and manufacturing operations
The growth of middle class in the country has resulted in fast changing
lifestyles in urban and to some extent rural centers. This opens a huge market for
lifestyle oriented drugs, which has a very low contribution in the Indian markets
Threats
Primary Health Infrastructure is the responsibility of the government.
Cost of discovering new drugs is very high.
Factor High Moderate Low
Strength
Weakness
Opportunities
Threats
16. Healthcare Industry of India 16
PESTLE Analysis
Political
Lower Public Expenditure
Public expenditure on health is lower than in other developing countries as a result, the
healthcare industry is highly dominated by the private sector. The Government facilitates the
functioning of the industry and helps attract foreign investors through investor-friendly policies
and tax incentives. Government hopes to provide innovative drugs, expand facilities of
healthcare insurance, and provide modern medical equipment and better services. By
implementing Telemedicine in India, one of the biggest healthcare projects in the world, it wants
to revolutionize the delivery of healthcare services using information technology and
communication.
Private Investment
The Government is also encouraging public-private partnership. It is promoting medical tourism.
Indian government is working toward delivering effective and affordable healthcare services to
the vulnerable sections of population residing in rural areas through its National Rural Health
Mission. The government plays a critical role in prioritizing the healthcare industry in the
development agenda of a country.
The country’s recognition of product patent for pharmaceuticals is expected to lure more foreign
investors into using the outsourcing opportunities in the country. The initiative taken by the
government to set up additional hospital schemes will create further opportunities for the
industry. Hence, India’s healthcare industry is anticipated to grow tremendously in the next five
to ten years.
Economic Environment
Growing incomes
Much of India’s healthcare expenditure comes from private patients, primarily the higher-income
households. The proportion of households in the low -income group has declined significantly.
Rising incomes are leading to a rise in the rich and middle-income groups, and they are expected
to form 49 % of total households in financial year 2010, as compared with 33 % in financial year
2004, thus driving growth. A survey conducted by NCAER, an independent economics research
agency, suggests that per-capita expenditure on healthcare rise with higher education levels
Significant investment opportunities are present for the private sector
Limited government investment provides significant opportunities for private healthcare service
providers as large investments are required to scale up the India’s healthcare infrastructure. Our
17. Healthcare Industry of India 17
healthcare infrastructure needs substantial investment. The government is likely to meet only 15-
20 % investment in hospital beds. Assuming 10-15 % commitment from international donors,
there would be a shortfall of 70 %, which can be funded by private companies. Presently, the
majority of healthcare services in India are provided by the private sector. Public spending on
healthcare will continue to rise, but chances of large and sustained increases are low.
Socio-cultural Environment
Increase in the life expectancy and ageing population
In the domestic market, health spending will be sustained by two demographic trends namely
increased life expectancy and an ageing population. In India, the proportion of the population
aged 65 years and over is also on the rise. Although the rate of ageing in India is slower than the
developed countries, the large size of our population makes any increase significant in terms of
numbers, and hence also in terms of market potential.
A shift to lifestyle-related diseases will be the driver for higher healthcare spends
The shift in disease profiles from infectious diseases to lifestyle-related diseases is expected to
raise expenditures for treatment. On the basis of demographic trends and disease profiles,
lifestyle diseases – cardiovascular diseases, cancer and asthma have become the most important
segments, and in-patient expenditure is expected to represent nearly 50% of total healthcare
expenditure.
Higher Population and Literacy
India has the 2nd largest population in the world. It is estimated that by 2050 we will be having
the largest population in world. This factor displays a huge opportunity for the health sector in
terms of sheer volume. Also there is huge urban shift in India the private hospitals are mainly
located in the urban areas and there is rural to urban shift of 26% which greatly increases the size
of the target market for the private players. Rising literacy in India is improving health
awareness, about lifestyle-related diseases— which tend to be more costly to treat than
infections.
Global & Technological Environment
Health infrastructure in the West.
The healthcare systems in Europe and the United States are under severe pressure. The National
Health Service (NHS) in the UK has a long list of patients waiting for over a year for surgery. In
the US the issues are different. Around 50 million citizens are uninsured. The shortage of
paramedical professionals such as nurses has aggravated the situation. Patients from the US are
now regularly coming to India.
18. Healthcare Industry of India 18
Quality Service and low cost of Healthcare
India offers highly cost-competitive medical treatment and technological advances in areas such
as cardiology, cosmetic, orthopedic surgery, eye care, dentistry, and preventive health checkups.
India offers world class cardiac bypass surgery, organ transplants, hip replacements, cosmetic,
dental surgery and vision correction. The associated costs of surgery are also low. This brings
down the overall cost of treatment. In India, diagnostic checkups are comparatively inexpensive.
India also has the potential to emerge as a hub for preventive health screening. At a private clinic
in London a health check-up for men that includes blood tests, lung tests, electrocardiogram
tests, chest X-Rays and abdominal ultrasound costs around 350 British Pounds. In comparison, a
comparable check-up at a clinic operated by Delhi-based healthcare company Max Healthcare
costs US$ 84. A Magnetic Resonance Imaging (MRI) scan costs US$ 60 at the Escorts Hospital
in Delhi as compared to US$ 700 in New York.
Factor High Moderate Low
Political
Economic
Socio-Cultural
Technological
19. Healthcare Industry of India 19
Conclusion & Recommendation
This analysis concludes on the note that Indian Healthcare Industry is an ideal place for private
players to invest in.
Its contribution to GDP is forecasted to increase to 6.2% within next few years. There is 80%
market potential left to tapped.
Sustenance in this industry is not very difficult as the potential is so large that for a long time
now there will be no internal rivalry. Player’s survival will be easy if they approach the right
business model. There are various models available in the market like PPP, small clinics, super
specialty hospitals etc. The only criteria for success are the human resource involved. Qualified
Human Resource is available in plenty in India. There is an emerging threat from substitutes like
Ayurveda and Homeopathy but in our country these forms of medicine are always taken as a last
resort. Trends are changing but it will take time for them to become perfect substitutes.
The weakness of this industry is basically the high delivery cost and hence the unavailability of
good specialized healthcare for the people low on the income scale. This is the major factor
which counter reacts to the numerous strengths of the industry.
The government is encouraging investment in Healthcare which makes it easier for the
companies as the process will be comparatively hassle free. Every force is in favor of investors.
These healthcare procedures save lives and improve quality of life. Millions of test, operations,
and other healthcare services will happen regardless of world events, economic, political, or
otherwise. When people are sick, they’ll do anything in their power to get better. And it doesn’t
matter one bit what else is happening on the planet. It’s one of the reasons investors should love
the healthcare sector. The population is aging and you don’t need a doctorate in demographics to
know that older people consume more healthcare as they age.
If asked, we would say that investment in this industry is the right thing to do in the current
scenario. It is a sector not affected by economic cycles, where demand is much higher than
supply and a necessity for our country.
Investing in this industry will not only give enormous returns to the investor. It will also be a
great help towards improving the healthcare situation in our country.
20. Healthcare Industry of India 20
Appendix
Medical Tourism
Medical Tourism means the process of leaving home and going abroad or a different place for
medical care.
Medical tourism has become one of India’s major sources of income in the past few years. India
with its well educated, English speaking medical staff, diagnostic conveniences, state of the art
private hospitals and comparatively low cost healthcare services, has emerged as a destination
for medical tourism. The fields in which India’s hospitals excel are cardiology, joint
replacement, hip replacement, gastroenterology, ophthalmology, cosmetology, orthopedics and
urology.
Medical Tourism is growing at the rate of 30%. It will be a $200 billion industry by 2015.
6,00,000 patients travelled to India last year for medical treatment. Corporate hospitals are
commenting that the figure is going up every year.
A Mckinsey Report says that only 9% of travelers seek lower costs as their primary
consideration. 15% seeks faster medical services , 32% seek better healthcare, and 40% seek
advanced technology.
India offers medical services at 1/10th the cost of an American or British hospital. A Business
World report says that a heart bypass surgery costs $144,000 in the United States , $25,000 in
Costa Rica, $20,000 in Mexico, $24,000 in Thailand, $13,500 in Singapore and $8,500 in India.
Along with the cost factor, the quality Indian Hospitals provide is excellent.
Hospitals are not the only ones affected by medical tourism. Hospitality, Pharmaceutical and
Medical equipment industry are greatly affected.
Medical tourism Ayurveda has attracted thousands of tourists to our country. Authentic and
monitored Ayurvedic programmes are sought to heal, cleanse , relax and rejuvenate. The most
common place for Ayurvedic treatments in India is Kerala. The benefits of Ayurveda are being
enjoyed by medical tourists coming from countries like the US, South America, UK, Germany,
France, Sweden, Canada, Netherlands & Europe . Many other wellness seekers are also coming
from countries like Oman, Jordan, Egypt, Australia, New Zealand, Saudi Arabia, Kuwait, UAE,
Malaysia, Singapore, Korea, Japan, etc.
Combination of Ayurveda, Yoga and Meditation is the most common package available to
medical tourists. This package also takes the tourist through the beauty of the country as
Ayurveda, Yoga and Meditation centers are present mostly in the holiday destinations of the
country.
21. Healthcare Industry of India 21
Major Healthcare Issues
Malnutrition:
In an African Sub Saharan Region , 28% of the children below the age of 3 are malnourished
whereas in India, 40% are malnourished ! Malnutrition leads to lack of cognitive, social ,
physical development of a child which in turn is lower productivity for the country once he is an
adult.
High Infant & Maternal Mortality Rate:
Before the age of 1, 1.72 million children die every year. From 202 per thousand in 1970, it has
come down to 50 per thousand in 2009 but the rate is slowing down. India has one of the highest
Maternal Mortality rates in the world. It is 1 in every 140 women.
The reason is lack of primary health facilities in the rural parts of India. Lack of care for the
women during pregnancy is also a reason for High Infant Mortality.
Diseases:
Hepatitis, Dengue, Malaria, Tuberculosis, Pneumonia continue to threaten the country due to
increased resistance to drugs. India is ranked 3rd among the most HIV affected countries. Indians
are also at a risk of atherosclerosis and coronary heart disease.
Inadequacies of Safe Drinking water & Poor sanitation are the causes of most of the healthcare
issues especially on the rural front.
22. Healthcare Industry of India 22
Key Developments
According to the Rural Health Survey report 2009, the rural sector has added 15,000
health sub centers and 28,000 nurses and midwives in the past 5years. Primary Health
Centers has increased by 84% increasing the number to 20,107.
From $2.7 billion in 2008, Indian medical technology is expected to reach $14 billion by
2020.
Frontier Mediville, the country’s first healthcare SEZ is being set up by Frontier Lifeline
Hospital at Elavoor, near Chennai.
The substantial demand for specialty healthcare is driving players such as Apollo and
Fortis to tier II and tier III cities.
Big groups are targeting new segments such as primary care and diagnostics.
The preventive healthcare segment in India is being driven by demographics, health
awareness and increasing capacity to spend.
Organizations like Narayana Hrudalaya and the Mazumdar Shaw Cancer Center are
entering into computer –based bio surveillance projects. These generate data about
diseases and create healthcare databases in rural areas.
Medical Tourism is booming in the country with over 6,00,000 patients travelling to
India for health care.
Narayana Hrudayalaya plans to expand its presence in the next 3 yrs to 7 more cities
which will take the number of hospitals to 14
An Australian medical devices company called Cochlear Ltd plans to set up its wholly
owned subsidiary in India. Cochlear will provide better patient and product support. $15
million is the investment planned.
The drugs and pharmaceuticals sector has attracted FDI worth $1.70 billion between
2000 to 2010. Hospitals and Diagnostic centers have received FDI worth $786.14
million.
Wockhardt plans to invest up to $158.32 million and Fortis Healthcare plans to invest
$146.81 million.
GE Healthcare plans to invest US$ 50 mn to set up more facilities for developing
diagnostic services.
Manipal Hospitals plans to invest US$ 45.23 million in the next three years to take its
capacity up to 8,000 beds.
23. Healthcare Industry of India 23
Cumulative FDI inflow (April 2000 to February 2011)
Sector FDI inflow (US$ million)
Hospital and diagnostic centers 998.11
Medical and surgical appliances 387.52
Drugs and pharmaceuticals 1,882.30
Source of the table: Department of Industrial Policy & Promotion (DIPP)
