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Virtual Trade Mission: Exploring Opportunities in India

May 7, 2009

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Fortis

  1. 1. The Indian Healthcare Landscape Jim Dockins, FACHE Regional Director Fortis Healthcare Limited 731-256-0585 (US) [email_address]
  2. 3. Some Facts India
  3. 4. Hard Facts <ul><li>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 </li></ul><ul><li>A third of the global poor now reside in India </li></ul><ul><li>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) </li></ul><ul><li>The Planning Commission of India has estimated that 27.5% of the population was living below the poverty line in 2004–2005 </li></ul><ul><li>Criterion: monthly per capita consumption expenditure below Rs. 356.35 for rural areas and Rs. 538.60 for urban areas </li></ul>
  4. 5. Two Faces of Indian Healthcare
  5. 6. Healthcare Industry in India <ul><li>3 Types of healthcare providers </li></ul><ul><ul><li>Private (Out of Pocket) </li></ul></ul><ul><ul><li>Public </li></ul></ul><ul><ul><li>Public Industry (BHEL, Railways, ONGC) </li></ul></ul>
  6. 7. Healthcare Industry in India <ul><li>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 </li></ul><ul><li>Average per head spending on healthcare in India = US $94 - $100 </li></ul><ul><li>United States = $5,711 per citizen </li></ul><ul><li>Switzerland = $3,445 per citizen </li></ul><ul><li>Norway = $3,083 </li></ul><ul><li>South Korea = $931 </li></ul><ul><li>Netherlands = $2909 </li></ul>
  7. 8. Healthcare Industry in India <ul><li>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) </li></ul><ul><li>Only few national programs are run by the Indian Government – NMEP, NACO etc </li></ul><ul><li>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) </li></ul>
  8. 9. Burden of Disease <ul><li>Communicable, Maternal, Perinatal, and Nutritional diseases contribute 46% of disease burden </li></ul><ul><li>India accounts for </li></ul><ul><ul><li>20% of world’s maternal deaths </li></ul></ul><ul><ul><li>40 million diabetics – expected to rise to 70 million by 2025 – every fifth diabetic in the world will be an Indian </li></ul></ul><ul><ul><li>Huge burden of cardiac diseases – 38% Indians have high cholesterol levels, making 2 out of 5 Indians susceptible to heart disease </li></ul></ul>
  9. 10. 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
  10. 11. Progression Graph - India
  11. 12. Government Initiatives <ul><li>Number of subcentres: 137,311 </li></ul><ul><li>PHC: 22,842 </li></ul><ul><li>CHC: 3,043 </li></ul><ul><li>Government (Public) Medical Colleges & Hospitals – 138 </li></ul><ul><li>Total number of Government Hospitals: 9,976 </li></ul><ul><ul><ul><ul><ul><li>Total number of Beds: 482,522 </li></ul></ul></ul></ul></ul>
  12. 13. <ul><ul><li>IMR of 56/1000 (double of Brazil and China) </li></ul></ul><ul><ul><li>MMR of 44/10000 (4 and 10 times of Brazil and China) </li></ul></ul>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
  13. 14. <ul><li>Private sector has 38% beds (FICCI & E&Y, 2008), but </li></ul><ul><li>caters to approximately 80% of Indian population </li></ul><ul><li>Only 1-2% of Private sector beds are in hospitals of bed </li></ul><ul><li>size > 200 beds </li></ul>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
  14. 15. 7% decline 42% growth 50% growth Number per 1000 population Average rate of population growth in India is 2% annually
  15. 16. Targets (2025) <ul><li>Hospital Bed density = 2/1000 population </li></ul><ul><li>Physicians per 1000 population = 1 </li></ul><ul><li>Nurses per 1000 population = 2.2 </li></ul>
  16. 17. <ul><li>Fastest growing Free Market Economy </li></ul><ul><li>Fourth-Largest economy in the world in terms of Purchasing power parity </li></ul><ul><li>Higher services mix, Increasing Urbanization, growing working population and a nascent consumer credit cycle are supporting India’s growth story </li></ul>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
  17. 18. Increasing Private Expenditure <ul><li>Public health expenditure has remained stagnant between 0.9 – 1.2% of GDP (of a total of 5.1%) </li></ul><ul><li>Public health expenditure in developed countries like USA is in the range of 8-10% of GDP </li></ul><ul><li>Private expenditure on HC has increased from 60% in 1990-91 to 80% in 2000-01 </li></ul>
  18. 19. Private Sector - Phases Phase 1 1947-83 Phase 2 1983-2000 Phase 3 Post 2000 <ul><li>Public sector focus </li></ul><ul><li>None to be denied care, regardless of ability to pay </li></ul><ul><li>State Responsibility to provide healthcare </li></ul><ul><li>Private sector encouraged to provide healthcare services </li></ul><ul><li>Access to public funded CHC expanded </li></ul><ul><li>State’s role redefined to that of a financer of health services from that of a provider </li></ul><ul><li>Liberalization of Insurance sector for health financing </li></ul>
  19. 20. Out-of-pocket expenditure on HC in India 4 times higher than the world average
  20. 21. Health Insurance <ul><li>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% </li></ul><ul><li>Insurance coverage in India was 12% in 2007 as compared to the USA where it is more than 85% </li></ul><ul><ul><li>In 2000 – 20% of all plans sold were retail insurance policies, while the remaining were group insurance policies </li></ul></ul><ul><ul><li>By 2008, the ratio has changed to 45% group policies and 55% retail insurance policies </li></ul></ul>
  21. 22. Health Insurance <ul><li>Insurance companies need to focus on Below Poverty Level segments </li></ul><ul><li>Rashtriya Swasthya Bima Yojana – launched by the government in 20008 </li></ul><ul><ul><li>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 </li></ul></ul><ul><ul><li>Insured family pays roughly ½ a Euro annually </li></ul></ul><ul><li>Rajiv arogya sri health scheme </li></ul><ul><li>Chiranjivi Project </li></ul><ul><li>Rogi Kalyan Samitis </li></ul>
  22. 23. Potential to become the Global Healthcare destination Overview Cost & Waiting Time Advantage <ul><li>Globally the Med Value Travel market is already estimated to cross $40 Bn. </li></ul><ul><ul><li>Thailand, South Africa, Malaysia, Cuba, Cost Rica are some of the emerging destinations </li></ul></ul><ul><li>In India the Medical tourism market is estimated at approx USD 0.33 Bn. </li></ul><ul><ul><li>Various studies project the market in India to grow to USD 2.7 Bn by end of the decade. </li></ul></ul>Key drivers for the growth <ul><li>Quality Healthcare at fraction of the cost </li></ul><ul><li>Availability of Skilled Doctors & Hospitals </li></ul><ul><li>Good reputation of Indian Doctors </li></ul>Issues <ul><li>Poor Infrastructure of the country </li></ul><ul><li>Low information levels on good Quality Hospitals </li></ul><ul><li>Lack of accreditation of Hospitals </li></ul>* These are average Costs not the actual cost which would be incurred …… . a $3 Bn opportunity in Med Value travel by 2012
  23. 24. Need for a Nano model for Healthcare Price = 1470 Euros
  24. 25. Way Forward <ul><li>Prevention of disease and promotion of healthy lifestyle </li></ul><ul><li>Increase health insurance coverage </li></ul><ul><li>PPP </li></ul><ul><li>Government to become facilitator rather than provider for tertiary care and higher secondary care </li></ul><ul><li>Infrastructure status to healthcare </li></ul><ul><li>Unshackle medical education </li></ul>
  25. 26. Prepared by Fortis Healthcare Ltd.
  26. 27. Thanks <ul><li>Credits: </li></ul><ul><li>FICCI Ernst & Young 2008 </li></ul><ul><li>WHO Statistics </li></ul><ul><li>Assocham Study </li></ul><ul><li>Government Healthcare Statistics </li></ul>

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