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Final report healthcare industry

  1. 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 2012We confirm that this is our own report and is the final version. We have acknowledged each useof words or ideas of another person whether written or oral.
  2. 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. 3. Healthcare Industry of India 3 Executive Summary―Healthcare Industry of India‖ is a project aimed at analyzing the Healthcare Industry of Indiaand 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 inIndia. Only 20% of this industry potential is tapped. The government cannot afford to spend thenecessary 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, growingeconomy, saturation of other sectors like IT and retail and the different models of healthcaredelivery.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 IndiaDirectory of Health and Family Welfare, Ministry of Health and Family Welfare, Indian Councilof Medical Research, Central Drug Standard Control Organization.Porter’s Five Forces Analysis, SWOT Analysis and PESTLE were done. Indian environmentprovides a very good opportunity for private players in healthcare. The growing population witha much deeper pockets and low government participation has lead to higher demands wherepeople are willing to pay high costs for proper medical care. India’s unmet demand forhealthcare facilities, rapidly changing demographics, increasing private spending on healthcare,and a readily available intellectual pool are fuelling the growth of the healthcare industry andmaking it highly attractive for investors
  4. 4. Healthcare Industry of India 4 IntroductionThe health care industry is a sector within the economic system which provides products andservices like diagnosis, treatment and prevention of diseases, illness and injury. Health care isdelivered 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 lifeand longevity. It has been preached and practiced since the ancient times. Ayurvedic medicineshave ways to totally rejuvenate the body and mind. All ayurvedic medicines are botanicalpreparations 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. SamuelHahnemann. It is based on a principle ―like cures like‖. It means that any substance whichproduces 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 thecountry along with IT and Education sector. This sector will generate 40 million new jobs and200 billion in revenue by 2020.Private healthcare, with hospital chains exploring the markets in tier II cities and metros is anemerging part of the healthcare sector. Also, the PPP model helps in improving the healthcareprovision 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 differentcompanies. Price levels cannot be influenced by one player as no single firm has large enoughmarket 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 & populationgrowth rate. The drivers of profitability are effective management of patient demand, obtaininggrants 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, economicand judicial influence. As in, the health care industry is distributed among market participants insome 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 anycountry, 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’slargest and fastest growing industries. Our main focus for this project is Allopathic care in India.
  5. 5. Healthcare Industry of India 5 HistoryIndia – A country of rich culture and heritage. Where there was man, there was need formedicine. Medicine today is a cumulative knowledge gathered for centuries. India, due to herancient knowledge and practice initiated the system of healthcare not just through the physicalailment 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.AyurvedaAyurveda has its origin in the Vedas, particularly the Atharva Veda. It is connected to the Hindureligion. Ayurveda originated from the 114 hymns of the Atharva Veda. It possibly dates back to2000 BC. This system of medicine was received by Dhanavantari- the God of medicine fromBrahma.The present knowledge of Ayurveda is by the texts of Charaka, Sushruta and Vaghbata.HomeopathyHomeopathy was founded by Samuel Hahnemann, a German physician in 1790. It was based onthe 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 asystematic medical science out of it. The first Homeopathic school was founded by his studentsin the US during late 1800s. Homeopathy gained recognition because it succeeded in treatingdisease epidemics like cholera, scarlet fever, yellow fever and typhoid.AllopathyIn 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 MedicalDecree in 1960.In between the 50s and the 80s, healthcare facilities increased substantially, but the number oflicensed 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 theend 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 educationincreased and industry began to grow. This was the time the incidents of cancer increased andposed problems to the medical community all over the world and the country. There were 128medical colleges by the end of the 80s.
  6. 6. Healthcare Industry of India 6In the 90s, we struggled with HIV with a mortality rate of over 80% in India. Late 90s saw a risein 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 centersrelied mostly on trained paramedics. Also, in 1991 there was uneven distribution of medicalfacilities in the country. India’s most populated state UP (over 139 million) had 735 hospitalswhereas Kerala (29 million) had 2053 hospitals. In 1992, there were 7,300 hospitals, out ofwhich 4,000 were owned and managed by the Govt. Another 2,000 owned and managed bycharitable trusts when the other 1,300 were private sector hospitals and in turn, very smallfacilities. The major hospitals were a part of the Govt. medical colleges. Lack of sophisticatedmedical facilities was common in private hospitals, but the pace of development was very quick.Today, it is the largest service sector in India.
  7. 7. Healthcare Industry of India 7 ObjectiveTo analyze the Healthcare Industry of India. MotivationHealthcare 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. 8. Healthcare Industry of India 8 Wellness Industry Analysis (excluding Healthcare)Indias market for "wellness" services is estimated at $2.2 billion, and projected to grow at anannual 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 millionby 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 toincrease to 37% in 2025. Urbanization leads to higher awareness and higher availability ofwellness products. Stress and lifestyle diseases in the urban areas are driving the growth forproducts and services in the enhancement and curative segments.Exposure to global beauty and fashion is another driver of wellness growth. Society’s obsessionwith celebrity culture is resulting in peer pressure to look good.
  9. 9. Healthcare Industry of India 9 Healthcare Industry AnalysisThe Healthcare industry comprises of both products and services. The products are in the form ofdrugs, healthcare equipment & health insurance. Our study focuses on the service segment of thehealthcare industry. Services in the healthcare industry can be diagnostic services, small scaleclinics & full fledged hospitals.The Indian healthcare industry is projected to grow 23 % per annum. There would be increase innumber of public and private healthcare facilities accounting for another $6.7 billion. Thisindustry 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 isprojected to reach 6.2% within the next few years.Growing population, cheaper treatment costs, increasing lifestyle related health issues, thrust inmedical tourism, improving health insurance penetration, government initiatives, increasingdisposable income and focus on PPP are driving factors for the growth of healthcare sector inIndia.Research says that only 12% of the industry potential has been tapped in our country which tellsus that the scope for growth is very large.The healthcare industry shows high opportunity for economies of scale. Narayana Hrudayalayais the ideal example as to how economies of scale can be achieved in this industry. Through lowcost 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. Thereare hospitals at every income level targeting people accordingly. The sad part is that the specialtyservices are out of reach for a large amount of our population. Even basic health services arelacking amongst the rural population. The government is taking initiatives but for a country likeIndia its not enough.Till few years ago, healthcare was the responsibility of private practitioners and doctor ownedhospitals. Large hospitals were run mostly by the government.
  10. 10. Healthcare Industry of India 10Apollo was the first to start the trend of corporate hospitals. Today, the rapid corporatization ofthe 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, thebarrier is limited to expertise and basic equipment whereas for a full fledged hospital, theinvestments are very high. Expertise and investment are the two main entry barriers in thisindustry. 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. 11. Healthcare Industry of India 11 RegulatorsThere 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. 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. 13. Healthcare Industry of India 13 Porter’s Five Forces AnalysisBuyers 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 hasindicated a CAGR of 16%. India still falls short on various key health indicators for e.g. ourhospital beds per 1000 stands at 0.7 whereas the world average is 3.96. There is a big mismatchbetween demand and supply of healthcare infrastructure and services in India. India needs to addover 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 Indianhospitals on local customers.Suppliers Power:Equipment Players:The competition in the equipment market is on a high. Consumables and disposable equipmentare made locally whereas high value equipments are made by international companies. Thecompanies have expanded their operations to the Indian market and established assemblycenters. The government is encouraging the growth of this market. High competition is turningout to be beneficial for the hospitals.Rivalry among Competitors:Increasing Competition:The drugs and pharmaceuticals sector has attracted FDI worth $1.66 billion. Hospitals anddiagnostic centers have received FDI worth $761.18 million. Presently the market is fragmentedbut the market is changing. The sector is organizing into distinct sectors which are one morereason the competition is increasing. Investments are increasing by the day as the potential in thismarket 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 poorpopulation of the country. An estimate is made that out of the $25.7 billion required to increasethe number of beds, the government is contributing only 15-20% of the amount which is a largeopportunity for private players.
  14. 14. Healthcare Industry of India 14Threat of New Entrants:Encouraging Government Reforms:The government does not have the financial strength for large scale investments in the healthcaresector, 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 inIndia. Other forms of funding are more prevalent. The reason for this can be long gestationperiod 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 lesserside effects as compared to allopathy. The society is moving towards alternative medicine mainlydue 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 gainingpopularity all over the world. There has been a rise in the amount of people who come to India toundergo Ayurvedic treatments. Force High Moderate LowBuyer’s Power Supplier’s Power Internal Rivalry Entry Barriers Threat of Substitutes 
  15. 15. Healthcare Industry of India 15 SWOT AnalysisStrengths 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 TourismWeakness Delivering healthcare in India is costly. We have a limited access to life saving medicines A normal middle class family cannot afford the specialty healthcareOpportunities 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 marketsThreats Primary Health Infrastructure is the responsibility of the government. Cost of discovering new drugs is very high. Factor High Moderate LowStrength Weakness Opportunities Threats 
  16. 16. Healthcare Industry of India 16 PESTLE AnalysisPoliticalLower Public ExpenditurePublic expenditure on health is lower than in other developing countries as a result, thehealthcare industry is highly dominated by the private sector. The Government facilitates thefunctioning of the industry and helps attract foreign investors through investor-friendly policiesand tax incentives. Government hopes to provide innovative drugs, expand facilities ofhealthcare insurance, and provide modern medical equipment and better services. Byimplementing Telemedicine in India, one of the biggest healthcare projects in the world, it wantsto revolutionize the delivery of healthcare services using information technology andcommunication.Private InvestmentThe Government is also encouraging public-private partnership. It is promoting medical tourism.Indian government is working toward delivering effective and affordable healthcare services tothe vulnerable sections of population residing in rural areas through its National Rural HealthMission. The government plays a critical role in prioritizing the healthcare industry in thedevelopment agenda of a country.The country’s recognition of product patent for pharmaceuticals is expected to lure more foreigninvestors into using the outsourcing opportunities in the country. The initiative taken by thegovernment to set up additional hospital schemes will create further opportunities for theindustry. Hence, India’s healthcare industry is anticipated to grow tremendously in the next fiveto ten years.Economic EnvironmentGrowing incomesMuch of India’s healthcare expenditure comes from private patients, primarily the higher-incomehouseholds. 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 expectedto form 49 % of total households in financial year 2010, as compared with 33 % in financial year2004, thus driving growth. A survey conducted by NCAER, an independent economics researchagency, suggests that per-capita expenditure on healthcare rise with higher education levelsSignificant investment opportunities are present for the private sectorLimited government investment provides significant opportunities for private healthcare serviceproviders as large investments are required to scale up the India’s healthcare infrastructure. Our
  17. 17. Healthcare Industry of India 17healthcare 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, themajority of healthcare services in India are provided by the private sector. Public spending onhealthcare will continue to rise, but chances of large and sustained increases are low.Socio-cultural EnvironmentIncrease in the life expectancy and ageing populationIn the domestic market, health spending will be sustained by two demographic trends namelyincreased life expectancy and an ageing population. In India, the proportion of the populationaged 65 years and over is also on the rise. Although the rate of ageing in India is slower than thedeveloped countries, the large size of our population makes any increase significant in terms ofnumbers, and hence also in terms of market potential.A shift to lifestyle-related diseases will be the driver for higher healthcare spendsThe shift in disease profiles from infectious diseases to lifestyle-related diseases is expected toraise expenditures for treatment. On the basis of demographic trends and disease profiles,lifestyle diseases – cardiovascular diseases, cancer and asthma have become the most importantsegments, and in-patient expenditure is expected to represent nearly 50% of total healthcareexpenditure.Higher Population and LiteracyIndia has the 2nd largest population in the world. It is estimated that by 2050 we will be havingthe largest population in world. This factor displays a huge opportunity for the health sector interms of sheer volume. Also there is huge urban shift in India the private hospitals are mainlylocated in the urban areas and there is rural to urban shift of 26% which greatly increases the sizeof the target market for the private players. Rising literacy in India is improving healthawareness, about lifestyle-related diseases— which tend to be more costly to treat thaninfections.Global & Technological EnvironmentHealth infrastructure in the West.The healthcare systems in Europe and the United States are under severe pressure. The NationalHealth Service (NHS) in the UK has a long list of patients waiting for over a year for surgery. Inthe US the issues are different. Around 50 million citizens are uninsured. The shortage ofparamedical professionals such as nurses has aggravated the situation. Patients from the US arenow regularly coming to India.
  18. 18. Healthcare Industry of India 18Quality Service and low cost of HealthcareIndia offers highly cost-competitive medical treatment and technological advances in areas suchas 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 bringsdown 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 clinicin London a health check-up for men that includes blood tests, lung tests, electrocardiogramtests, chest X-Rays and abdominal ultrasound costs around 350 British Pounds. In comparison, acomparable check-up at a clinic operated by Delhi-based healthcare company Max Healthcarecosts US$ 84. A Magnetic Resonance Imaging (MRI) scan costs US$ 60 at the Escorts Hospitalin Delhi as compared to US$ 700 in New York. Factor High Moderate LowPolitical Economic Socio-Cultural Technological 
  19. 19. Healthcare Industry of India 19 Conclusion & RecommendationThis analysis concludes on the note that Indian Healthcare Industry is an ideal place for privateplayers 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 timenow there will be no internal rivalry. Player’s survival will be easy if they approach the rightbusiness model. There are various models available in the market like PPP, small clinics, superspecialty hospitals etc. The only criteria for success are the human resource involved. QualifiedHuman Resource is available in plenty in India. There is an emerging threat from substitutes likeAyurveda and Homeopathy but in our country these forms of medicine are always taken as a lastresort. 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 ofgood specialized healthcare for the people low on the income scale. This is the major factorwhich counter reacts to the numerous strengths of the industry.The government is encouraging investment in Healthcare which makes it easier for thecompanies 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, orotherwise. When people are sick, they’ll do anything in their power to get better. And it doesn’tmatter one bit what else is happening on the planet. It’s one of the reasons investors should lovethe healthcare sector. The population is aging and you don’t need a doctorate in demographics toknow 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 currentscenario. It is a sector not affected by economic cycles, where demand is much higher thansupply and a necessity for our country.Investing in this industry will not only give enormous returns to the investor. It will also be agreat help towards improving the healthcare situation in our country.
  20. 20. Healthcare Industry of India 20 Appendix Medical TourismMedical Tourism means the process of leaving home and going abroad or a different place formedical care.Medical tourism has become one of India’s major sources of income in the past few years. Indiawith its well educated, English speaking medical staff, diagnostic conveniences, state of the artprivate hospitals and comparatively low cost healthcare services, has emerged as a destinationfor medical tourism. The fields in which India’s hospitals excel are cardiology, jointreplacement, hip replacement, gastroenterology, ophthalmology, cosmetology, orthopedics andurology.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 arecommenting that the figure is going up every year.A Mckinsey Report says that only 9% of travelers seek lower costs as their primaryconsideration. 15% seeks faster medical services , 32% seek better healthcare, and 40% seekadvanced technology.India offers medical services at 1/10th the cost of an American or British hospital. A BusinessWorld report says that a heart bypass surgery costs $144,000 in the United States , $25,000 inCosta 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 andMedical equipment industry are greatly affected.Medical tourism Ayurveda has attracted thousands of tourists to our country. Authentic andmonitored Ayurvedic programmes are sought to heal, cleanse , relax and rejuvenate. The mostcommon place for Ayurvedic treatments in India is Kerala. The benefits of Ayurveda are beingenjoyed by medical tourists coming from countries like the US, South America, UK, Germany,France, Sweden, Canada, Netherlands & Europe . Many other wellness seekers are also comingfrom 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 tomedical tourists. This package also takes the tourist through the beauty of the country asAyurveda, Yoga and Meditation centers are present mostly in the holiday destinations of thecountry.
  21. 21. Healthcare Industry of India 21 Major Healthcare IssuesMalnutrition:In an African Sub Saharan Region , 28% of the children below the age of 3 are malnourishedwhereas 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 anadult.High Infant & Maternal Mortality Rate:Before the age of 1, 1.72 million children die every year. From 202 per thousand in 1970, it hascome down to 50 per thousand in 2009 but the rate is slowing down. India has one of the highestMaternal 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 thewomen during pregnancy is also a reason for High Infant Mortality.Diseases:Hepatitis, Dengue, Malaria, Tuberculosis, Pneumonia continue to threaten the country due toincreased resistance to drugs. India is ranked 3rd among the most HIV affected countries. Indiansare also at a risk of atherosclerosis and coronary heart disease.Inadequacies of Safe Drinking water & Poor sanitation are the causes of most of the healthcareissues especially on the rural front.
  22. 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. 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 1,882.30Source of the table: Department of Industrial Policy & Promotion (DIPP)
  24. 24. Healthcare Industry of India 24 References
  25. 25. Healthcare Industry of India 25