Healthcare in India The Indian Healthcare Scenario Current Scenario Major Players Future Outlook

Current Scenario

Major Players

Future Outlook

The Social Burden

India Spends US $ 22.7 Billion On Healthcare * Source: National Accounts Statistics 2001; McKinsey analysis The Indian Healthcare Market

* Source: National Accounts Statistics 2001; McKinsey analysis Healthcare Market (2005 vs 2025) Healthcare is the third largest growth segment in India

Healthcare : Demand & Supply 90 % patients need primary and secondary care

Total expenditure in India as percentage of GDP : 5.0 (2004) Global Healthcare Infrastructure

Source: National Accounts Statistics, 2001; Manpower profile; CBHI; McKinsey analysis Sectorwise Distribution By 2012, the Healthcare sector could account for 7- 8% of GDP and provide direct and indirect employment to 9 million

As economy improves, greater stress on preventive care Healthcare Spectrum

Source: CII-McKinsey Report, 2002 Private expenditure as % of total expenditure on health : 82.7 (2004) India Prefers Private Providers

Source : NSSO, 52 nd Round India will have the largest number of diabetics in the world in next 3 years Public and Private Sector

Out of pocket semi-urban and rural expenses higher than Urban The Current Status Of Healthcare RURAL (per 1000 population) Hospital Beds = 0.2 Doctors = 0.6 Public Expenditures = Rs.80,000 Out of pocket = Rs.750,000 ____________________ IMR = 74/1000 LB U5MR = 133/1000 LB Births Attended = 33.5% Full Immunz.=37% Median ANCs=2.5 URBAN (per 1000 population) Hospital Beds = 3.0 Doctors = 3.4 Public Expenditures = Rs.560,000 Out of Pocket = Rs.1,150,000 ____________________ IMR = 44/1000 LB U5MR = 87/1000 LB Births Attended = 73.3% Full Immunz.= 61% Median ANCs=4.2

India Diabetes Prevalence: 31,705,000(2000) 79,441,000(2030) Healthcare trends in India

Drivers of Growth Health Insurance penetration Increasing disease burden – lifestyle diseases Awareness of healthcare and preventive care Employer provided healthcare Community based health plans Increasing health awareness, Increasing spends on health

Health Insurance Private Health Insurance to cover 20% to 25% by 2020

The Demographics Middle Income Class in India to grow to 400 to 500 Million by 2015

Healthcare – Urban vs Rural Healthcare services one of the fastest growing segment in India

Major Players Clinics & Nursing Homes Single doctor or family of doctors Good local network and word of mouth clientele Limited range of services and facilities Charitable Trusts Multispeciality hospitals run by religious or social groups Standard of care is driven by individual doctors Subsidised pricing offset by donations Sub-optimal facilities Government Hospitals Ill equipped to provide efficient healthcare Unavailability of appointed doctors and hospital staff Not favoured by semi-urban populations Standard of care is abysmal Organised Sector Very few players in this sector Regional in focus, usually offshoots of tertiary players Most current players are Urban Centric Healthcare services is highly unorganised segment in India

Clinics & Nursing Homes

Single doctor or family of doctors

Good local network and word of mouth clientele

Limited range of services and facilities

Charitable Trusts

Multispeciality hospitals run by religious or social groups

Standard of care is driven by individual doctors

Subsidised pricing offset by donations

Sub-optimal facilities

Government Hospitals

Ill equipped to provide efficient healthcare

Unavailability of appointed doctors and hospital staff

Not favoured by semi-urban populations

Standard of care is abysmal

Organised Sector

Very few players in this sector

Regional in focus, usually offshoots of tertiary players

Most current players are Urban Centric

US $ IN BILLION at 2000-2001 prices Huge Growth Potential Majority of the spending in Private Sector

Healthcare services – expected CAGR of 11 to 13% Healthcare Services Growth

The Indian Healthcare Delivery market is estimated at US$ 18.7 billion. Nearly 65 % of the healthcare services market has been captured by the private sector. The industry is growing at about 13 % annually and is expected to grow at 15 % over the next four to five years. A recent CII - McKinsey & Co. study forecasts growth from US$ 18.7 billion to around US$ 45 billion – equivalent to 8.5 % of GDP by 2012. Private healthcare is expected to account for 75 % of this spending The Market Opportunity McKinsey : Rural healthcare will account for half of the total consumption

Share of the wallet McKinsey : Healthcare share of the wallet in India will be very close to China.

Investment in India (Estimates) Healthcare in India will grow at 10.8% annually to reach USD 190 billion

Who is Vaatsalya? Vaatsalya is a corporate healthcare network focused on providing affordable, efficient and sustainable healthcare service to semi-urban & rural areas and was founded by two physicians Dr. Ashwin Naik and Dr. Veerendra Hiremath in late 2004. Vaatsalya intends to eliminate the gap in healthcare access by creating India’s first network of hospitals exclusively in semi-urban and rural areas and bringing urban healthcare facilities and services to non-urban areas. More than 70% of India lives in Semi-Urban and Rural India 300 Million Middle Income families