Fortis

The Indian Healthcare Landscape Jim Dockins, FACHE Regional Director Fortis Healthcare Limited 731-256-0585 (US) [email_address]

Some Facts India

Hard Facts
According to May 2007 data, the per capita income of India was Rs 29,382 ($588) a year or Rs 2,448.5 ($49) a month
A third of the global poor now reside in India
The World Bank estimates that 456 million Indians (42% of the total Indian population) now live under the global poverty line of $1.25 per day (PPP)
The Planning Commission of India has estimated that 27.5% of the population was living below the poverty line in 2004–2005
Criterion: monthly per capita consumption expenditure below Rs. 356.35 for rural areas and Rs. 538.60 for urban areas

Two Faces of Indian Healthcare

Healthcare Industry in India
3 Types of healthcare providers
Private (Out of Pocket)
Public
Public Industry (BHEL, Railways, ONGC)

India is host to 17% of world’s population, 20% of all maternal deaths, 23% of child deaths, 26% of childhood vaccine preventable deaths, 30% of TB& 68% of leprosy, 20% of entire disease burden, and 8% of Doctors
Average per head spending on healthcare in India = US $94 - $100
United States = $5,711 per citizen
Switzerland = $3,445 per citizen
Norway = $3,083
South Korea = $931
Netherlands = $2909

Healthcare is not a part of the concurrent list of constitution of India, every state formulates its own policy (28 states and 7 union territories)
Only few national programs are run by the Indian Government – NMEP, NACO etc
Healthcare Industry expected to reach from US $ 35 billion to 75 billion by 2012, and 150 billion by 2017, bulk of it will be by Private Sector (KSA Technopak)

Burden of Disease
Communicable, Maternal, Perinatal, and Nutritional diseases contribute 46% of disease burden
India accounts for
20% of world’s maternal deaths
40 million diabetics – expected to rise to 70 million by 2025 – every fifth diabetic in the world will be an Indian
Huge burden of cardiac diseases – 38% Indians have high cholesterol levels, making 2 out of 5 Indians susceptible to heart disease

Other diseases Heart diseases Sense organs MuscoSkeletal Acute Infections Other diseases Acute Infections Heart diseases MuscoSkeletal Sense organs Acute Infections Other Disease Heart Disease Cancer Accidents / Injuries Acute Infections Other Disease Heart Disease Cancer Accidents / Injuries 2001 2012 2012 2001 USD 19 Bn USD 10 Bn Outpatient Market size ( Private spend on Healthcare Delivery) Inpatient Market size ( Private spend on Healthcare Delivery) 46% 54% … ..life style diseases will become dominant USD 6 Bn USD 18 Bn

Progression Graph - India

Government Initiatives
Number of subcentres: 137,311
PHC: 22,842
CHC: 3,043
Government (Public) Medical Colleges & Hospitals – 138
Total number of Government Hospitals: 9,976
Total number of Beds: 482,522

IMR of 56/1000 (double of Brazil and China)
MMR of 44/10000 (4 and 10 times of Brazil and China)
Indicators India Brazil China USA Beds/1000 population .86 2.6 2.2 3.2 Bed occupancy ratio (%) 72% 60-80% 72% 69.3% Average length of stay (number of days) 10 4-8 10.6 6.7

Private sector has 38% beds (FICCI & E&Y, 2008), but
caters to approximately 80% of Indian population
Only 1-2% of Private sector beds are in hospitals of bed
size > 200 beds
Additional Requirements 2008 2018 2028 Additional Beds required 1.1 million 3.1 million 2 million Beds/1000 population 0.7 – 1.7 4 5 Additional Floor Space @ 800 sq feet/bed 880 million sq feet 2480 1600 Additional Land Area (FSI 1:1) 20,000 acres 56,400 36,400

7% decline 42% growth 50% growth Number per 1000 population Average rate of population growth in India is 2% annually

Targets (2025)
Hospital Bed density = 2/1000 population
Physicians per 1000 population = 1
Nurses per 1000 population = 2.2

Fastest growing Free Market Economy
Fourth-Largest economy in the world in terms of Purchasing power parity
Higher services mix, Increasing Urbanization, growing working population and a nascent consumer credit cycle are supporting India’s growth story
Mar - 95 Mar - 02 Mar – 07 E 0.4% 3.4% 5.0% 5.0% 14.0% Private Health Insurance Social Insurance Employer’s spend Community Insurance Total Favorable shift in Demographics Exciting phase of Economic development Insurance coverage Rapid growth in per capita GDP(PPP) Upper Middle & High(> $ 1500 pa) Upper Middle & Middle($500- $ 1500 pa) Low(<$500 pa) Percent of population, 2001 … reason for optimism

Increasing Private Expenditure
Public health expenditure has remained stagnant between 0.9 – 1.2% of GDP (of a total of 5.1%)
Public health expenditure in developed countries like USA is in the range of 8-10% of GDP
Private expenditure on HC has increased from 60% in 1990-91 to 80% in 2000-01

Private Sector - Phases Phase 1 1947-83 Phase 2 1983-2000 Phase 3 Post 2000
Public sector focus
None to be denied care, regardless of ability to pay
State Responsibility to provide healthcare
Private sector encouraged to provide healthcare services
Access to public funded CHC expanded
State’s role redefined to that of a financer of health services from that of a provider
Liberalization of Insurance sector for health financing

Out-of-pocket expenditure on HC in India 4 times higher than the world average

Health Insurance
Health Insurance industry is worth US $1025 million, and is expected to grow at 30% annually till 2015 to US $5600 million, by which time insurance coverage would have increased to 10% from the present 2%
Insurance coverage in India was 12% in 2007 as compared to the USA where it is more than 85%
In 2000 – 20% of all plans sold were retail insurance policies, while the remaining were group insurance policies
By 2008, the ratio has changed to 45% group policies and 55% retail insurance policies

Health Insurance
Insurance companies need to focus on Below Poverty Level segments
Rashtriya Swasthya Bima Yojana – launched by the government in 20008
Covers 300 million people living below the poverty line – each member of such families will get a maximum health insurance coverage of Rs 30,000 ($600) per annum along with additional incidental benefits
Insured family pays roughly ½ a Euro annually
Rajiv arogya sri health scheme
Chiranjivi Project
Rogi Kalyan Samitis

Potential to become the Global Healthcare destination Overview Cost & Waiting Time Advantage
Globally the Med Value Travel market is already estimated to cross $40 Bn.
Thailand, South Africa, Malaysia, Cuba, Cost Rica are some of the emerging destinations
In India the Medical tourism market is estimated at approx USD 0.33 Bn.
Various studies project the market in India to grow to USD 2.7 Bn by end of the decade.
Key drivers for the growth
Quality Healthcare at fraction of the cost
Availability of Skilled Doctors & Hospitals
Good reputation of Indian Doctors
Issues
Poor Infrastructure of the country
Low information levels on good Quality Hospitals
Lack of accreditation of Hospitals
* These are average Costs not the actual cost which would be incurred …… . a $3 Bn opportunity in Med Value travel by 2012

Need for a Nano model for Healthcare Price = 1470 Euros

Way Forward
Prevention of disease and promotion of healthy lifestyle
Increase health insurance coverage
PPP
Government to become facilitator rather than provider for tertiary care and higher secondary care
Infrastructure status to healthcare
Unshackle medical education

Prepared by Fortis Healthcare Ltd.

Thanks
Credits:
FICCI Ernst & Young 2008
WHO Statistics
Assocham Study
Government Healthcare Statistics

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