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    Demand forecast of hospitals in india Demand forecast of hospitals in india Document Transcript

    • DEMANDFORECASTING OF HOSPITALS IN INDIA GROUP MEMBERS : VARUN THAMBA. (F11120) DIVYANSHI GUPTA. (F11121) SYED IBRAHIM. (F11122) AROKIA MANOJ KUMAR. (F10002)
    • 2|PageContents Introduction -3 Nature and Scope of a Hospital -5 History of Hospitals -6 Modern Hospital -7 Classification of hospitals -8 Types of Hospitals - 10 Types of Management - 11 SWOT Analysis of a hospital - 12 Indian Healthcare Sector - 13 Market Drivers of Health Care Sector - 14 Market Trends - 15 Regulatory Framework - 16 Accreditation Schemes - 19 BUDGET 2008-09 - 20 Reform Measures and Policy Initiatives - 22 Market size of Hospital sector - 24 Key Players in the Healthcare Segment - 25 Demand analysis for no of people admitted in hospital - 29 Demand Analysis for Number of consultations offered - 31 Conclusion - 33 Demand Forecasting | Hospital in India
    • 3|PageAcknowledgement We would like to take this opportunity to thank Prof. I Thyagarajan, who has been animmense source of knowledge for us. He has guided us and made us aware of not onlythe concepts in the field of economics but also knowledge common and essential for us tobecome successful and efficient future managers. With this report, we hope to have if notcompletely, but marginally to begin with, portray our understanding of his teachings andapply the concepts that we have learnt to real world industries. Demand Forecasting | Hospital in India
    • 4|PageIntroduction Concept of Health Care Since health is influenced by a number of factors such asadequate food, housing, basic sanitation, healthy lifestyles, protection againstenvironmental hazards and communicable diseases, the frontiers of health extend beyondthe narrow limits of medical care. It is thus clear that “health care” implies more than “medical care”. It embraces a multitude of “services provided to individuals orcommunities by agents of the health services or professions, for the purpose ofpromoting, maintaining, monitoring, or restoring health.” Levels of health care It iscustomary to describe health care at 3 levels primary, secondary, and tertiary care levels.1. Primary care level. It is the first level of contact of individuals, the family andcommunity with the national health system, where “primary health care” is provided. Inthe Indian context, the primary health care is provided by the complex of primary healthcentres and their subordinates through the agencies of multipurpose health workers,village health guides and trained dais.2. Secondary care level. The next higher level of care is the secondary health carelevel. At this level more complex problems are dealt with. In India, this kind of care isgenerally provided in district hospitals and community health centres which also serve asthe first referral level.3. Tertiary care level. The tertiary level is a more specialized level than secondarycare level and requires specific facilities and attention of highly specialized healthworkers. This care is provided by the regional or central level institutions, e.g. MedicalCollege Hospitals, All India Institutes, Regional Hospitals, Specialized Hospitals andother Apex institutions.In the past three decades or so, India has made rapid strides in social, political andeconomic fields. Unfortunately, however, hospital administration has lagged far behind.Even the most sophisticated and the so-called modern hospitals in India continue to begoverned by the stereotyped system of hospital administration, viz. Appointing thesenior-most doctor as the Medical Superintendent. He is entrusted with the responsibilityof the entire administration of the hospital, irrespective of whether or not he hasundergone any formal training in hospital administration. Times have changed andspecialization has become the order of the day. It is, therefore, imperative to haveseparate specialists for general administrative and personnel functions in hospitals.Secondly, with the tremendous expansion in health services, it has become essential tohave specialists in the field of hospital administration, so that maximum efficiency can beachieved at minimum cost. Demand Forecasting | Hospital in India
    • 5|PageNature and Scope of a Hospital Healthy human being make a healthy society, however society has its share ofunhealthy beings, illness, disease and invalidity. As civilization advanced from theindividual to the family, from family to tribe, and finally to the organized community,society acknowledged a common responsibility towards the sick. Today hospital meansan institution in which sick or injured persons are treated. A hospital is different from adispensary – a hospital being primarily an institution where in-patients are received andtreated while the main purpose of a dispensary is distribution of medicine andadministration of outdoor relief. Demand Forecasting | Hospital in India
    • 6|PageHistory of Hospitals The institution that we know today as the hospital is a phenomenon of thetwentieth century. The early institutions from which it developed bore little resemblanceto that important part of community life, which we call the hospital. In its earliest formthe hospital was aimed at care of the poor and lodging was the primary function of theearly hospital. The record shows the earliest hospital in Paris to have been founded about600 A.D., and St. Bartholomew‟s in London dates from the year 1123. The first hospitalsin the New World were built by the Spanish in Mexico City (1524) and the French inCanada. There was a general tendency to lump together the physically handicapped, thesick, the socially unwanted and the pauper. Special inoculation hospitals were builtduring the smallpox epidemics to care for persons being so treated, but these died outwhen this form of treatment was superseded by vaccination. Indian Scenario: The historyof Indian medicine and surgery dates back to the earliest of ages. In India, hospitals haveexisted from ancient times. Even in the 6th century B.C. during the time of Buddha, therewere a number of hospitals to look after the crippled and the poor. The outstandinghospitals in India at that time were those built by King Ashoka. Charaka and Sushruthaof ancient India were famous physicians. Medicine based on the Indian system wastaught in the universities of Taxila and Nalanda, which probably contributed to theadvances in Arabic medicine. The decline of Indian medicine started with the invasion offoreigners in the 10th century A.D., which was a period of unrest. The invaders broughtwith them their own physicians called hakims. The use of allopathic system of medicinecommenced in the 16th century with the arrival of European missionaries in South India.It was during the British rule that there was once again progress in the building ofhospitals. The first hospital in India was probably built in Goa, as mentioned in Fryer‟sTravels. The first hospital in Madras was opened in 1664; the establishment of a hospitalin Bombay was under discussion in 1670 but apparently it was not actually taken up till1676; the earliest hospital in Calcutta was built in 1707-1708 and in Delhi, in 1874.During the 17th and 18th centuries, there was a slow but steady progress in the growth ofthe modern system of medical practice in India and the indigenous system was pushed tothe background. Organized medical training was started in the 19th century. The firstmedical school was started in Calcutta, followed by one in Madras. In the beginning boththe modern system and the Ayurvedic system were taught. The medical school inCalcutta was converted into a college in 1835. Demand Forecasting | Hospital in India
    • 7|PageModern Hospital: A comprehensive definition of a hospital highlighting all the essential servicesprovided by a modern hospital can be as follows: A modern hospital is an institutionwhich possesses adequate accommodation and well qualified and experienced personnelto provide services of curative, restorative, and preventive character of the highest qualitypossible to all people regardless of race, color, creed, or economic status; which conductseducational and training programmes for the personnel particularly required forefficacious medical care and hospital service; which conducts research assisting theadvancements of medical service and hospital service and which conducts programmes inhealth education. Modern hospitals are open 24 hours a day. Their personnel renderservices for the cure and comfort of patients. In the operation theatre, skilled surgeonsperform life-saving surgery. In the nursery, new-borns receive the tender care of trainednurses. In the laboratory, expert technicians conduct urine, stool, and blood tests vital tothe battle against disease. In the kitchen, cooks and dieticians prepare balanced mealsthat contribute to the patient‟s speedy recovery. A hospital aims at the speedy recovery ofpatients. That is why its rooms are equipped with air-conditioners, call-bells and otherdevices. Several hospitals have libraries, which provide books for them. The telephonekeeps the sick in touch with their friends and relatives. In most of the hospitals today,patients have newspaper and barber services in their rooms. To save the precious time ofthe medical staff, secondary duties like explaining the diagnosis and line of treatment tothe patients and their attendants are entrusted to another section of the staff calledmedical assistants. In hospitals, therefore, the endeavor is to provide the best possiblefacilities to the patients within the hospital‟s resources. Demand Forecasting | Hospital in India
    • 8|PageClassification of Hospitals Hospital have been classified in many ways. The most commonly acceptedcriteria of the modern hospitals are (a) length of stay of patients (long-term or short-term), (b) clinical basis, and (c) ownership control basis. Classification according to Ownership/Control On the basis of ownership or control, hospitals can be divided into four categories,namely public hospitals, voluntary hospitals, private nursing homes, and corporatehospitals.Public Hospitals: Public hospitals are those run by the Central Government, state governments orlocal bodies on non-commercial lines. These hospitals may be general hospitals orspecialized hospitals or both. General hospitals are those which provide treatment forcommon diseases, whereas specialized hospitals provided treatment for specific diseaseslike infectious diseases, cancer, eye diseases, psychiatric ailments, etc.Voluntary Hospitals: Voluntary hospitals are those which are established and incorporated under theSocieties Registration Act, 1860 or Public Trust Act, 1882 or any other appropriate Actof the Central or state government. They are run with public or private funds on a non-commercial basis. A board of trustees, usually comprising prominent members of thecommunity and retired high officials of the government, manages such hospitals. Theboard appoints an administrator and a Medical Director to run such voluntary hospitals.The main source of their revenue are public and private donations, and grants from theCentral Government and state governments and from philanthropic organizations, bothnational and international. Thus, voluntary hospitals run on a „non profit, no loss‟ basis.Private nursing homes: Private nursing homes are generally owned by an individual doctor or a group ofdoctors. These nursing homes are run on a commercial basis. Naturally, the ordinary Demand Forecasting | Hospital in India
    • 9|Pagecitizen cannot usually afford to get medical treatment there, however, these nursinghomes are becoming more and more popular due to the shortage of government andvoluntary hospitals. Secondly, wealthy patients who do not want to get treatment atpublic hospitals due to long queues of patients and the shortage of medical as well asnursing staff leading to lack of medical and nursing care.Corporate hospitals: The latest concept is of corporate hospitals, which are publiclimited companies, formed under the Companies Act. They are normally run oncommercial basis. They can be either general or specialized or both.Classification according to Length of Stay of Patients: A patient stays for a short-term in a hospital for treatment of diseases such aspneumonitis, appendicitis, gastroenteritis, etc. A patient may stay for a long term in ahospital for treatment such as tuberculosis, cancer, schizophrenia, etc. Therefore ahospital may fall either under the category of long-term or short-term according to thedisease and treatment provided.Classification according to Clinical Basis A clinical classification of hospitals is another basis for classification of hospitals.Some hospitals are licensed as general hospitals while others as specialized hospitals. Ina general hospital, patients are treated for all kinds of diseases such as typhoid, fever, etc.But in specialized hospital, patients are treated only for those diseases for which thathospital has been set up, such as heart diseases, tuberculosis, cancer, ophthalmic diseasesetc.Classification according to the Government The Directory of Hospitals in India-1988 lists the various types of hospitals andthe types of management. Demand Forecasting | Hospital in India
    • 10 | P a g eTypes of Hospitals(i) General hospital: All establishments permanently staffed by at least two or moremedical officers, which can offer inpatient accommodation and provide medical andnursing care for more than one category of medical discipline (e.g. General medicine,surgery, obstetrics).(ii) Rural hospital: Hospitals located in rural areas (classified by the Registrar General ofIndia) permanently staffed by at least one or more physicians, which offer in-patientaccommodation and provide medical and nursing care for more than one category ofmedical discipline.(iii) Specialized hospital: Hospitals providing medical and nursing care primarily for onlyone discipline or a specific disease/affection of one system.(iv) Medical college hospital: A hospital to which a college is attached formedical/dental education.(v) Isolation hospital: This is a hospital for the care of persons suffering fromcommunicable diseases requiring isolation of the patients. Demand Forecasting | Hospital in India
    • 11 | P a g eTypes of Management1. Central Government/Government of India: All hospitals administered by theGovernment of India, e.g. Hospitals run by the railways, military/defense, public sectorundertakings etc.2. State Government: All hospitals administered by the state/UT governmentauthorities and public sector undertakings operated by the states/uts, including the police,jail, canal departments etc.3. Local Bodies: All hospitals administered by local bodies, e.g. Municipalcorporation, municipality, panchayat etc.4. Private: All private hospitals owned by an individual or by a private organization.5. Autonomous Body: All hospitals established under a special Act ofParliament/state legislation and funded by the central/state government/UT, e.g. NIMS,Hyderabad, SVIMS, Tirupathi, AIIMS, Delhi, PGI, Chandigarh, etc.6. Voluntary Organization: All hospitals operated by a voluntary body/atrust/charitable society registered or recognized by the appropriate authority undercentral/state government laws. This includes hospitals run by missionary bodies andcooperatives. Demand Forecasting | Hospital in India
    • 12 | P a g eSWOT Analysis of a hospitalSTRENGTHS  Quality Service at Affordable Cost  Vast supply of qualified doctors  Strong presence in advanced healthcare e.g. Cardiovascular, organ  Transplants – high success rate in operations  International Reputation of hospitals and Doctors  High confidence level in Indian doctors  Diversity of tourism destinations and ExperiencesWEAKNESS  No strong government support /initiative to promote medical tourism  Low Coordination between the various players in the industry– airline operators, hotels and hospitals  Customer Perception as an unhygienic country  No proper accreditation and regulation system for hospitals  Lack of uniform pricing policies across hospitalsOPPORTUNITY  Increased demand for healthcare  Services from countries with aging population (U.S, U.K)  Fast-paced lifestyle increases demand for wellness tourism and alternative cures Shortage of supply in National Health  Systems in countries like U.K, Canada Reduced/competitive cost of international travel  Demand from countries with underdeveloped healthcare facilities  Demand for retirement homes for elderly people especially JapaneseTHREATS  Strong competition from countries like Thailand, Malaysia, Singapore  Lack of international accreditation – a major inhibitor  Under-investment in health infrastructure  Lack of proper insurance policies for this sector Demand Forecasting | Hospital in India
    • 13 | P a g eIndian Healthcare Sector The healthcare industry includes medical care providers, physicians, specialistclinics, nursing homes, hospitals, medical diagnostic centers and pathologylaboratories.In terms of revenue and employment, healthcare is one of India‟s largestservice-sector industries. During the 1990s, Indian healthcare grew at a compound annualrate of 16%. Today the total value of the sector is more than $34 billion. This translates to$34 per capita, or roughly 6% of GDP. By 2012, India‟s healthcare sector is projected togrow to nearly $40 billion. The Indian healthcare sector constitutes of the following:  Medical care providers: physicians, specialist clinics, nursing homes and  Hospitals  Diagnostic service centers and pathology laboratories;  Medical equipment manufacturers;  Contract research organizations (CROs), pharmaceutical manufacturers;  Third party support service providers (catering, laundry). Hospitals serve an important function in Indias healthcare system. They providein-patient and out-patient services and also support the training of health workers andresearch. Indian hospitals can be broadly classified as public hospitals, private and not-for-profit hospitals. Corporate hospital chains that provide tertiary healthcare services inlarge towns and cities have also been established. The public healthcare system consistsof healthcare facilities run by the central and state government which provide servicesfree of cost or at subsidized rates to low income group in rural and urban areas.Healthcare spending in India accounts for over 5 per cent of the countrys GDP. Out ofthis, the public spending in percentage is around 1 per cent of GDP. The presence ofpublic health care is not only weak but also under-utilized and inefficient. Meanwhile,private sector is quite dominant in the healthcare sector. Around 80 percent of totalspending on healthcare in India comes from the private sector. Inadequate publicinvestment in health infrastructure has given an opportunity to private hospitals to capturea larger share of the market. In addition the demand for hospital services has beenincreasing due to the rise in lifestyle related diseases. Initially the government imposedhigh custom duty on imported medical equipment making it difficult for privateentrepreneurs to set up hospitals. But in post liberalization the duties have come downand some life saving medicines and equipments can be imported duty free. Moreover, theintroduction of product patents in India is expected to boost the industry by encouragingmultinational companies to launch specialized life -saving drugs. Demand Forecasting | Hospital in India
    • 14 | P a g eMarket Drivers of Health Care Sector:  Rising Health awareness;  Shift to lifestyle related diseases;  Increasing government expenditure on health care sector;  Health insurance sector is also on the rise;  Private sector companies are growing fast in terms of owning and managing hospitals;  Growth in medical tourism;  Cost effective surgical services. According to report, the cost of surgery in India is just about 10% of that in USA;  Gradual corporatization of the Healthcare sector. Demand Forecasting | Hospital in India
    • 15 | P a g eMarket Trends: Indias healthcare sector has been growing rapidly and estimated to be worth US$40 billion by 2012. Revenues from the healthcare sector account for 5.2 per cent of theGDP, making it the third largest growth segment in India. The Indian healthcare market iscurrently estimated at US$ 34.2 billion. The market has grown from US$ 22.8 billion inthe year 2005, at a CAGR of 16% and is expected to grow to US$ 50.2 billion and US$78.6 billion by 2011 and 2016 respectively. Healthcare delivery and pharmaceuticalsaccount for nearly 75% of the total healthcare market. India has only 0.7 beds per 1,000people, far below the global average of 2.6. India needs to add 2 million beds to theexisting 1.1 million by 2027, and requires immediate investments of $82 billion to makeup for its infrastructure deficit. The country needs $50 billion annually for the next 20years to meet the healthcare needs of its rapidly expanding population. The Indianhealthcare industry is poised to grow at a compounded annual growth rate of 15 per cent.Nearly 90 per cent of this growth will come from the private sector. Further, privatehospitals in the country are expected to rake in $35.9 billion (Rs 147,154.1 crore) in 2012compared to $15.5 billion (Rs 63,534.5 crore) in 2006. Funds in the Indian healthcare sector have been largely private. The private sectorprovides 60 per cent of all outpatient care in India and as much as 40 per cent of all in-patient care. It is estimated that nearly 70 per cent of all hospitals and 40 per cent ofhospital beds in the country are in the private sector. The Indian health insurance business is fast growing at 50 per cent and isProjected to grow to US$ 5.75 billion by 2010. Investments into the medical and surgicalinstruments segment amount to US$ 115.29 million over the period August 1991 to April2007. A recent study has predicted 15-20 per cent growth for the Indian medicalequipment market and estimated market size to be about US$ 5 billion by 2012. India hasthe fastest growing healthcare IT market in Asia, with an expected growth rate of 22 percent, followed closely by China and Vietnam. In fact, the Indian healthcare technologymarket is poised to be worth more than US$ 254 million by 2012. In 2006, imports ofmedical equipment and supplies were valued at US$1,125.8 million, an increase of 21.7%over 2005. The healthcare sector attracted US$ 379 million in 2007 which is 6.8 percentof the total p rivate equity (PE) investment of US$ 5.93 billion. Demand Forecasting | Hospital in India
    • 16 | P a g eRegulatory Framework: Ministry of Health and Family Welfare (mohfw): The Union Ministry of Healthand Family Welfare (mohfw) is responsible for implementation of national programmes,sponsored schemes and technical assistance relating to the Indian healthcare industry.The following departments come under the Ministry:I) Department of Health: It looks after the following activities:  Health related activities, including various immunization campaigns;  Control over various health bodies including National Aids ControlOrganization (NACO), National Health Programme, Medical Education & Training, andInternational Cooperation in relation to health;  Administers the Hospital Services Consultancy CorporationIi) Department of Family & Welfare: This department offers the followingServices:  Maternal and Child Health Services; Information, Education and Communication;  Rural Health Services, Non-Governmental Organisations and Technical Operations.  Policy Formulation, Statistics, Planning, Autonomous Bodies and Subordinate Offices;  Supply of Contraceptives; International Assistance for Family Welfare and Urban Health Services;  Administration and Finance for the Departments of Health, Family WelfareIii) Department of AYUSH: This department undertakes the followingActivities:  Upgrade the educational standards in the Indian Systems of Medicines and Homoeopathy colleges in the country;  Strengthen existing research institutions and ensure a time-bound research programme on identified diseases for which these systems have an effective treatment; Demand Forecasting | Hospital in India
    • 17 | P a g e  Draw up schemes for promotion, cultivation and regeneration of medicinal plants used in these systems;  Evolve Pharmacopoeial standards for Indian Systems of Medicine and Homoeopathy drugsAutonomous Institutions conducting Research and Development: The following autonomous institutions under the Ministry of Health and FamilyWelfare conduct research in various specific areas:  Indian Council of Medical Research (ICMR)  Indian Medical Association (IMA)  Central Drug Research Institute (CDRI)National Programmes and Schemes: National Rural Health Mission: This mission was launched in April 2005 by theGovernment of India to fulfill the Government‟s commitment to meet people‟saspirations for better health and access to healthcare services. NRHM‟s goals include thetraining of 250,000 women volunteers designated as Accredited Social Health Activists(ashas) over the next three years across 18 states with weak rural health infrastructure.National Health Policy-2002: The National Health Policy 2002 focuses on the need forenhanced funding and organizational restructuring of the national public health initiativesin order to facilitate more equitable access to health facilities. The follo wing are theother areas of its focus:  Gradual convergence of health under a single field administration and emphasis on implementation of programmes through local selfgovernment institutions;  Identification of specific programmes targeted at women‟s health and strengthening of food and drug administration, in terms of both laboratory facilities and technical expertise;  Focus on those diseases that are principally contributing to the disease burden - TB, Malaria and Blindness from the category of historical diseases and HIV/AIDS from the category of newly emerging diseases;  Greater contribution from the Central Budget for the delivery of public health services at the state level. Demand Forecasting | Hospital in India
    • 18 | P a g eOther National Health Programmes:  National Vector Borne Disease Control Programme (NVBDCP)  National Filaria Control Programme  National Leprosy Eradication Programme  Revised National TB Control Programme  National Programme for Control of Blindness  National Iodine Deficiency Disorders Control Programme  National Mental Health Programme  National Aids Control Programme  National Cancer Control Programme  Universal Immuization Programme  National Programme for Prevention and Control of Deafness  Pilot Programme on Prevention and Control of Diabetes, CVD and Stroke  National Tobacco Control Programme Demand Forecasting | Hospital in India
    • 19 | P a g eAccreditation Schemes:Quality Council of India: In India, QCI (Quality Council of India) operates the national accreditationstructure and obtains international recognition for its accreditation schemes in order toguarantee quality healthcare to all. QCI was set up in 1997 as an autonomous body by theGovernment of India jointly with the India industry to establish and operate the NationalAccreditation Structure for conformity assessment bodies.National Accreditation Board for Hospitals & Healthcare Providers (NABH): This is a constituent board of Quality Council of India, set up by the Ministry ofHealth to establish and operate the accreditation programme for healthcare organizationsin India. NABH has standards specific to the Indian healthcare setting, major aspectsbeing the assurance of uniform access, assessment, care of patients and protection ofpatient‟s rights.The following are some of the NABH accredited hospitals in India:  B.M.Birla Heart Research Centre, Kolkata  MIMS Hospital, Calicut  Max Super- Speciality Hospital, New Delhi  Max Devki Devi Heart and Vascular Institute, New Delhi  Kerala Institute of Medical Sciences, Thiruvananthapuram  Moolchand Hospital, New Delhi  Fortis Hospital, Noida, Jaipur and Mohali  Manipal Hospital, Bangalore  Escorts Heart Institute & Research Centre, New DelhiInternational Accreditation Body Present in India: Joint Commission International (JCI): JCI is the largest accreditor of health careOrganizations in the United States which surveys nearly 20,000 health care programsthrough a voluntary accreditation process. The following are some ofThe JCI Accreditated Organizations in India:  Indraprastha Apollo Hospital, Delhi  Apollo Hospital, Bangalore, Chennai, Hyderabad  Asian Heart Institute, Mumbai  Shroff Eye Hospital, Mumbai  Wockhardt Hospital, Mumbai and Bangalore  Fortis Healthcare, Mohali Demand Forecasting | Hospital in India
    • 20 | P a g eBUDGET 2008-09:The following initiatives were taken for the healthcare industry:  Rs.16, 534 crore allocated for the healthcare sector marking an increase of 15% over 2007-08.  National Rural Health Mission (NRHM): 462,000 Associated Social Health Activitists have been trained, 177,924 villages have sanitation committees functional and 323 district Hospitals have been taken up for upgradation. Allocation to NRHM has been increased to Rs. 12,050 crore.  HIV/AIDS: The National Aids Control Programme provided Rs.993 crore.  Polio: Drive to eradicate polio continues with revised strategy and focus on the high risk districts in Uttar Pradesh and Bihar. Rs. 1,042 crore allocated in 2008-09.  A five year tax holiday to hospitals located in any place outside the urban agglomerations especially in tier-2 and tier-3 towns.  A reduction in excise duty from 16 per cent to 8 per cent.  Amounts spent on Research and Development eligible for a 125 per cent weighted deduction.  A reduction in customs duty from 10 to 5 per cent and a total exemption of excise duty on certain specified life -saving drugs and bulk drugs.FDI Policy: 100% FDI is permitted for hospitals and all health-related services under theautomatic route.Other Government Initiatives:  The government encourages foreign / private investment in the healthcare sector.  It defines and enforces minimum quality standards for healthcare facilities.  It stimulates the growth of private, social and community insurance.  The National Health Policy, 2002, makes it clear that government policy supports medical tourism. The policy encourages the supply of services to patients of foreign origin on payment. The rendering of such services on payment in foreign exchange is treated as deemed exports and is made eligible for all fiscal incentives extended to export earnings.  A new category of visa "Medical Visa" (M-Visa) has been introduced which can be given for a specific purpose to foreign tourists coming into India. Demand Forecasting | Hospital in India
    • 21 | P a g e  In order to allay suspicions regarding the quality of care in a developing country, Indian corporate hospitals are getting certified by international accreditation schemes.  The government has identified healthcare as a priority section and hence have taken some measures to promote one of its most important segment “Medical Device Market”. The conditions for exporting to India have significantlyimproved since the economic reforms started in the middle of the nineties. Import licenserequirements have been cancelled, majorityowned subsidiaries are possible, anddividends can be paid out abroad.Some other measures are:I) Reduction in import duty on medical equipment from 25 per cent to 5 per cent.Ii) Depreciation limit on such equipment rose to 40 per cent from 25 per cent, toencourage medical equipment imports.Iii) Customs duty reduced to 8 per cent from 16 per cent for medical, surgical, dental andveterinary furniture.Iv) Customs duty on as many as 24 medical equipments, which include X-ray,goniometry and teletherapy stimulator machines, has been reduced to 5 per cent. Demand Forecasting | Hospital in India
    • 22 | P a g eReform Measures and Policy InitiativesReforms done during 2010-2011:  Large number of medical and paramedical staff has been taken on contract to augment thehuman resources. During the year 2009-10, about 2475 MBBS doctors, 160 specialists, 7136anms, 2847 staff nurses, 2368 AYUSH doctors and 2184 AYUSH paramedics were appointed.  Mobile Medical Units increased to 363 districts in 2009-10 from 310 in 2008- 09 to providediagnostic and outpatient care closer to hamlets and villages in remote areas.  About 50,000 Village Health and Sanitation Committees (vhscs) set up.  Under National Programme for Control of Blindness, number of cataract operation performedhave registered a significant increase from about 22 lakh operations in 2007-08 to 59 Lakhcataract operations in 2009-10.In terms of systems improvements the NRHM targets were  Upgrade all phcs into 24x7 phcs by the year 2010.  Upgrading all Community Health Centres to Indian Public Health Standards.  Increase utilization of first referral units from bed occupancy by referred cases of less than20 per cent to over 75 per cent.  Engaging 4,00,000 female Accredited Social Health Activists (ashas).Goals for 2011-2012  To raise public spending on health from 0.9 per cent of GDP to 2-3 per cent of GDP, within proved arrangement for community financing and risk pooling.  Reducing Maternal Mortality Ratio (MMR) to 1 per 1,000 live births.  Reducing Infant Mortality Rate (IMR) to 28 per 1,000 live births.  Reducing Total Fertility Rate (TFR) to 2.1.  Providing clean drinking water for all by 2009 and ensuring no slip-backs.  Reducing malnutrition among children in the age group 0–3 year to half its present level.  Reducing anaemia among women and girls by 50 per cent. Demand Forecasting | Hospital in India
    • 23 | P a g e  Raising the sex ratio in the age group 0–6 years to 935 by 2011–12, and to 950 by 2016–17.  Malaria Mortality Reduction Rate: 50 per cent up to 2010, additional 10 per cent by 2012.  Kala Azar Mortality Reduction Rate: 100 per cent by 2010 and sustaining elimination until2012.  Filaria / Microfilaria Reduction Rate: 70 per cent by 2010, 80 per cent by 2012 and eliminationby 2015.  Dengue Mortality Reduction Rate: 50 per cent by 2010 and sustaining at that level until 2012.  Cataract operations: Increaseto 46 lakhs by 2012.  Leprosy Prevalence Rate: Reduce from 1.8 per 10,000 in 2005 to less that 1 per 10,000thereafter.  Tuberculosis DOTS series: Maintain 85 per cent cure rate through entire mission period andalso sustain planned case detection rate.National Health Programmes  National Vector Borne Disease Control Programme (NVBDCP)  School Health Programme  Operational Guidelines / Financial Guidelines  Prevention & Control of Non Communicable Diseases  Pilot Programme on Prevention and Control of Diabetes, CVD and Stroke  National Programme for Prevention and Control of Deafness Universal Immuization Programme  National Cancer Control Programme  National Aids Control Programme  National Mental Health Programme  National Iodine Deficiency Disorders Control Programme  National Programme for Control of Blindness  Revised National TB Control Programme  National Leprosy Eradication Programme  National Filaria Control Programme  National Tobacco Control Program Demand Forecasting | Hospital in India
    • 24 | P a g eMarket size of Hospital sector: Hospital industry is an important component of the value chain in IndianHealthcare. Industry rendering services and recognized as healthcare delivery segment ofthe Healthcare industry, which is growing at an annual rate of 14%. The size of theIndian Healthcare industry is estimated at Rs. 1,717 billion in 2007. It is estimated togrow by 2012 to Rs. 3,163 billion at 13% CAGR. The private sector accounts for nearly80% of The healthcare market, while public expenditure accounts for 20%. The countryhad 15,393 (2005) hospitals, which had 8.75 lakh hospital beds. According to the WHOReport, India needs to add 80,000 hospital beds each year for the next five years to meetThe demands of its growing population. Newfound prosperity of many Indianhouseholds is spurring demand for high-quality medical care, transforming the healthcaredelivery Sector into a profitable industry. Medial tourism is changing the face oftraditional Healthcare industry in India. India‟s excellence in the field of modernmedicine and its Ancient methods of physical and spiritual wellbeing make it the mostfavourable Destination for good health and peaceful living. India‟s cost advantage andexplosive Growth of private hospitals, equipped with latest technology and skilledhealthcare Professionals has made it a preferred destination for medical tourism.According to Ministry of Commerce and Industry, Indian medical tourism that wasvalued at US$350 Million in 2006, is estimated to grow into a US$2 billion industry by2012. Demand Forecasting | Hospital in India
    • 25 | P a g eKey Players in the Healthcare Segment: The governments share in the healthcare delivery market is 20 percent while 80percent is with the private sector. Private players have made significant investments insetting up state-of-the-art private hospitals in cities like Mumbai, New Delhi, Chennaiand Hyderabad. The following are the major domesticPrivate healthcare providers in India:Apollo Hospitals: Apollo Hospitals has emerged as the single largest private hospital group in SouthAsia. It operates hospitals, dispensaries, clinics and laboratories. It manages a network ofapproximately 41 specialty hospitals and clinics with a bed capacity of over 9,000 acrossthe country and abroad. It has tied up with insurers like BUPA (UK), Vanbreda(Belgium) and Mondial (France) to direct inflow of foreign patients to India. It has a jointventure with Singaporebased Parkway Group Healthcare PTE Ltd. It has tied up withIndian Oil Corporation (IOC) to set up its pharmacies at the latter‟s petrol stations.The Escorts Group: This has a presence in specialized cardiac treatment and multi-specialty carehospitals providing a whole gamut of specialized medical services. Escorts operates tenhospitals across India. The group is also reputed for tertiary care services such as Demand Forecasting | Hospital in India
    • 26 | P a g eneurology, neurosurgery, plastic surgery and urology. Escorts Heart Institute andResearch Centre (EHIRC) has a 325 bed tertiary care institute, with 9 operation theatres,5 cath labs, 2 heart command centres and world class facilities. It has carried out over80,000 angiographies and 43,000 cardiac surgeries over the past fifteen years – which is aworld record.Fortis Healthcare: This is a company founded by the promoters of the Indian pharmaceutical major,Ranbaxy Laboratories, started operations in 2001. It has approximately 12 hospitals with1,900 beds.It has operations across North India in the cities of Delhi, Noida, Mohali,Amritsar, Faridabad, Raipur and Srinagar. It has a joint venture with Real Estate playerDLF to set up hospitals across the country with an investment of about US$ 1.5 billionMax Healthcare: This is a fully owned subsidiary of the highly diversified Max Group, with a chainof clinics and hospitals with a bed capacity of 1200. On an average, Max Healthcaretreats 30,000 patients every month, with 200 new patients visiting the facilities every day.It has collaborated with Singapore General Hospital in the areas of medical practices,nursing, paramedical research and training .Wockhardt: This is among India‟s leading pharmaceutical and healthcare companies. Sinceinception in 1989, the Wockhardt Hospital & Heart Institute has become a renownedtertiary level heart centre providing cardiac care to patients of all age groups. It is the firstrecognized hospital in South Asia on the worldwide panel of Blue Cross blue Shield, thelargest provider of health insurance in USA. It has approximately 10 hospitals with 1,500beds. It has entered into Public-Private Partnership with the Government of Gujarat tomanage the 275-bed Palanpur Civil General Hospital in Gujarat.Manipal Health Systems: Its chain consists of approximately 9 primary centres at 7 rural locations, 8secondary hospitals at urban and semi-urban locations and 3 tertiary hospitals at urbanand semi-urban locations. It has a joint venture with Pantaloon Retail for comprehensiveretail healthcare foray. Arvind Eye Hospital: This hospital in South India is the singlelargest provider of eye surgery in the world. In 1998, its hospitals saw 1.2 millionoutpatients and performed 183,000 cataract surgeries. It costs Arvind about US$ 10 toconduct a cataract operation. It costs hospitals in the United States about US$ 1,650 toperform the same operation. Demand Forecasting | Hospital in India
    • 27 | P a g eForeign collaboration in the Indian Healthcare sector: Since liberalization in 1991, a growing number of Indian companies have formedAlliances with foreign firms. The following are some of such alliances:  Wockhardt collaborated with Harvard Medical International Inc. USA  Fortis Healthcare collaborated with Partners Healthcare System, USA  Birla Heart & Research Centre collaborated with Cleveland Clinic Foundation, USA  Max Healthcare and Singapore General Hospital (SGH) have entered into collaboration for medical practice, research, training and education in healthcare services.  Apollo-Gleneagles Hospitals Ltd. Is a 50:50 joint venture between Apollo Hospitals Ltd and Parkway Group of Singapore. The joint venture is also looking at business opportunities overseas in West Asia and North Africa.  Apollo Hospitals has also entered into a partnership with Yemen‟s Hayel Saeed Anam Group to provide advisory services to the latter‟s hospital project.Foreign players in India:  The US-based Atlas Medical Software, which specializes in developing software solutions for the healthcare industry, has set up its operations in India.  Bayer Diagnostics, one of the largest diagnostic businesses in the world.  GE-BEL, a joint venture between General Electricals and Bharat Electronics Limited is the only manufacturer of X-ray and CT tubes in South Asia.  UK-based Isoft Group plc (isoft), one of the world‟s leading suppliers of application systems for hospitals and healthcare organizations.  Phillip sells about US$ 43-49 million worth of medical systems in India.  The US-based healthcare products major, Proton Health Care is making an entry into India with its range of digital health monitoring devices.  Siemens is a leading manufacturer of medical equipment with a market share of more than 30 per cent in India.  Wipro GE Medical Systems, a joint venture between GE Medical Systems and Wipro Corporation, is India‟s largest medical systems sales and service provider Demand Forecasting | Hospital in India
    • 28 | P a g ePrivate Equity players in healthcare: The following PE firms have evinced interest in healthcare (hospitals, diagnosticsector and medical equipment):  Carlyle  Fidelity International  UK-based CDC Group  Blackstone  IDFC  HSBC  JP Morgan Private Equity Fund  American International Group Inc (AIG)  Evolvence India Life Sciences Fund  George Soross fund Quantum  Blue Ridge  ICICI Venture  Global Healthcare Investments and Solutions  Bluewater International Investment  Lightspeed Advisory  Ajay Piramal Group  Groupe Limagrain  Singularity Ventures  Eplanet Ventures  Daninvest  Barings Private Equity Partners India  Reliance Life Sciences Demand Forecasting | Hospital in India
    • 29 | P a g eDemand analysis for no of people admitted in hospital:Statistical Data from Ministry of Health & Family welfare : Year No of people admitted in Hospital ( in million) 2006-2007 1.11 2007-2008 1.14 2008-2009 1.18 2009-2010 1.24 2010-2011 1.37Calculation of Demand Analysis: Year (Taking Base Y x^2 x*y Year 2009-2010) X2006 – 2007 -2 1.11 4 -2.222007 – 2008 -1 1.14 1 -1.142008 – 2009 0 1.18 0 02009 – 2010 1 1.24 1 1.24 2010 - 2011 2 1.37 4 2.74The Demand for the Preceding years: y=a+bxwhere, a=∑y/n b=∑(x*y)/∑(x^2) a= 6.04/5= 1.208; b= 0.62/10= 0.062Using ,y=a+bx For 2011-2012, y=1.208+0.062(4)=1.456 For 2012-2013, y=1.208+0.062(5)=1.518 For 2013-2014, y=1.208+0.062(6)=1.580 For 2014-2015, y=1.208+0.062(7)=1.642 Demand Forecasting | Hospital in India
    • 30 | P a g e For 2015-2016, y=1.208+0.062(8)=1.704Demand Forecasted: 2011- 2012- 2013- 2014- 2015- Years 2012 2013 2014 2015 2016 Demand For bed in millions 1.456 1.518 1.58 1.642 1.704 Demand Forecasting | Hospital in India
    • 31 | P a g eDemand Analysis for Number of consultations offered:Statistical Data from Ministry of Health & Family welfare : Year No of consultations offered ( in million) 2006-2007 7.89 2007-2008 7.99 2008-2009 8.23 2009-2010 8.76 2010-2011 9.26Calculation of Demand Analysis: Year (Taking Base Y x^2 x*y Year 2009- 2010) X 2006 – 2007 -2 7.89 4 -31.56 2007 – 2008 -1 7.99 1 -7.99 2008 – 2009 0 8.23 0 0 2009 – 2010 1 8.76 1 8.76 2010 - 2011 2 9.26 4 37.04The Demand for the Preceding years: y=a+bxwhere, a=∑y/n b=∑(x*y)/∑(x^2) a= 42.13/5= 8.426; b= 6.25/10= 0.625Using ,y=a+bx For 2011-2012, y=8.426+0.625 (4) =21.065 For 2012-2013, y=8.426+0.625 (5)=26.330 For 2013-2014, y=8.426+0.625 (6)=31.597 For 2014-2015, y=8.426+0.625 (7)=36.860 Demand Forecasting | Hospital in India
    • 32 | P a g e For 2015-2016, y=8.426+0.625 (8)=42.130Demand Forecasted: 2011- 2012- 2013- 2014- 2015- Years 2012 2013 2014 2015 2016 Demand for consultations to be offered ( in million) 21.065 26.330 31.597 36.860 42.130 Demand Forecasting | Hospital in India
    • 33 | P a g eConclusion:As we can see from the demand curves, it is evident that there is a clear increase in thenumber of patients approaching hospitals for health care. As the reach of hospitalsbecomes greater, even the rural market is getting tapped and thus the demand shows abullish growth path over the years.This trend is expected to continue for the next few years, given the spending capacity ofthe Indian customer and the increased awareness level in the health care sector.With companies also insisting on health checkups and tests before giving employees thefinal joining letter is another major factor which has seen the numbers going updrastically.Also the fact that health care is affordable in India compared to most of the developedcountries brings in visitors from these countries under the umbrella of medical tourism.This is also a major contributor to the overall income of the health care industry and thisis only set to increase with more and more hospital chains coming up with offers andplans to woo the customers. Demand Forecasting | Hospital in India