Indian Healthcare

Healthcare in India was always treated as a second cousin when it came to prioritizing resources, but with the advent of Covid 19 three years back, India experienced a disadvantage it had put itself, as the virus exposed its shortcomings. Covid 19 made the government realize that this is a significant sector for which if sufficient resources are not provided, then it has the potential to bring the entire country to its knees and can devastate the economy.

After this realization, presently the Indian healthcare sector is one of the fastest growing sectors with high contributions not only in terms of revenue but also employment. It includes hospitals, medical devices, health insurance, telemedicine, clinical trials, medical tourism, and medical equipment. This shift of focus to Healthcare infrastructure led the country and the world to sit up and realize that there is a massive opportunity beyond the Pharma sector. Presently the healthcare sector is witnessing an expansion by existing hospitals in terms of new services through technology platforms investment in next-generation tools for diagnosis, tie-ups with insurance companies, and geographical expansions, with a focus to provide world-class medical care at affordable cost. The sector is attracting fresh investment from domestic as well as international investors to fund expansions.

In 2021, PM’s Atmanirbhar Swasth Bharat Yojana (PMASBY) was launched with an outlay of Rs 65,000 Cr in 6 years. Among others, it included an important aspect of establishing critical care hospital blocks in 602 districts and 12 central institutions. The healthcare market size was expected to reach approx $ 400 billion by 2023. This growth is driven by rising income, ageing population, increasing healthcare awareness, growing health insurance penetration, and increasing government focus on providing universal healthcare.

Some facts about the Indian healthcare industry

• As of 2022, the market size for pharmaceuticals in India was $41 billion, which is expected to reach $ 120 billion by 2030. Indian Pharmaceuticals have a share of 85% while Global Pharmaceuticals have 15% of the market share in India.
• India already contributes over 20% by value to the global generics market, with Indian products contributing over 40% (by volume)of the US drug market.
• Presently the hospital industry in India is accounting for 80% of the healthcare market. From $61.8 billion in 2017, the hospital industry is expected to reach $130 billion by 2023.
• The diagnostic industry is expected to grow and reach $ 32 billion by 2023.
• The medical tourism industry which was $ 3 billion in 2016, rose to $ 6 billion by 2020, but then it was hit by Covid.
• Presently the diagnostic industry is valued at $ 4 billion.
• The digital healthcare market which was valued at Rs 117 billion in 2018, is expected to reach Rs 485 billion by 2024.
• The government has allowed 100% Foreign Direct Investment (FDI) for all Greenfield projects under automatic route. For investments in brownfield projects, up to 100% FDI is permitted under the government route.
• The telemedicine market is the maximum potential e Health segment in India, which is expected to touch $5.4 billion by 2025.
• India’s comprehensive investment in Medical Education: Rs 17, 691 Cr, invested in 157 newly approved medical colleges since 2014.

As per today’s news, major hospital chains including Fortis Healthcare and Apollo hospitals, have bounced back with 23% revenue growth, driven by higher surgeries and occupancy, after the threat of Covid disappeared over the past few months.

Fortis has been pursuing an expansion strategy while focusing on improving operations. The company plans to grow through both brownfield and inorganic mode, with brownfield expansion along with adding 1400 beds over the next few years.

For Apollo, the revenue growth is 21.3% over the year. In the diagnostic sector, there is steady growth of 22%, despite steep competition.

It looks like after the Covid pandemic, the healthcare sector is witnessing a major overhaul in their operational and expansion patterns, to meet the demands which will be there in the future.

Waiting for your views on this blog.

Anil Malik

Mumbai, India

19^th June 2023