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Healthcare and Medical Tourism in India



Healthcare has become one of India’s largest sectors - both in terms of revenue and employment. Healthcare comprises hospitals, medical devices, clinical trials, outsourcing, telemedicine, medical tourism, health insurance and medical equipment. The Indian healthcare sector is growing at a brisk pace due to its strengthening coverage, services and increasing expenditure by public as well private players.

The Indian healthcare sector is expected to register a compound annual growth rate (CAGR) of 22.9 per cent during 2016-20 to US$ 280 billion. Rising income level, greater health awareness, increased precedence of lifestyle diseases and improved access to insurance would be the key contributors to growth.

The private sector has emerged as a vibrant force in India's healthcare industry, lending it both national and international repute. It accounts for almost 74 per cent of the country’s total healthcare expenditure. Telemedicine is a fast-emerging trend in India; major hospitals (Apollo, AIIMS, Narayana Hrudayalaya) have adopted telemedicine services and entered into a number of public-private partnerships (PPP).The telemedicine market in India is valued at US$ 7.5 million currently and is expected to grow at a CAGR of 20 per cent to reach US$ 18.7 million by 2017.Further, presence of world-class hospitals and skilled medical professionals has strengthened India’s position as a preferred destination for medical tourism.

The Government of India aims to develop India as a global healthcare hub. It has created the National Health Mission (NHM) for providing effective healthcare to both the urban and rural population. The Government is also providing policy support in the form of reduced excise and customs duty, and exemption in service tax, to support growth in healthcare.
Investment in healthcare infrastructure is set to rise, benefiting both 'hard' (hospitals) and 'soft' (R&D, education) infrastructure.

Indian healthcare delivery system is categorized into two major components - public and private. The Government, i.e. public healthcare system comprises limited secondary and tertiary care institutions in key cities and focuses on providing basic healthcare facilities in the form of primary healthcare centers (PHCs) in rural areas. The private sector provides majority of secondary, tertiary and quaternary care institutions with a major concentration in metros, tier I and tier II cities.

India's competitive advantage lies in its large pool of well-trained medical professionals. India is also cost competitive compared to its peers in Asia and Western countries. The cost of surgery in India is about one-tenth of that in the US or Western Europe.

Segments of Healthcare Sector

Hospitals (71%)
Healthcare delivery market in terms of volume was around 4.4 billion treatments in 2014.
Healthcare delivery comprises In-patients Department (IPD) for 72% and Out-Patients Department (OPD) accounting for 28%.
The healthcare delivery market is dominated by private healthcare providers, accounting for around 80% of total healthcare delivery in value terms.
Currently market is expanding at CAGR 9% and estimated to expand at CAGR 11% during 2016-2018.

Pharmaceuticals (13%)
The Indian pharmaceutical industry is estimated to expand at CAGR of around 12% during 2015-2020, mainly due to growth factors such as presence of epidemiological factors, increase in affordability due to increase in income, expansion of insurance coverage and increased awareness.
It is expected that India would be among the top three pharmaceutical markets by incremental growth and sixth largest in absolute size.

Medical Equipment and Supplies (9%)
The Indian medical device market is fourth-largest in Asia, with more than 700 medical device manufacturers.
India’s medical device market is forecasted to expand at a CAGR of over 16% during 2015-2020, mainly due to increased financial support in the form of fiscal benefits and technological advancements.

Medical Insurances (4%)
Indian Health insurance markets, one of the fastest growing markets, recorded a CAGR of over 20% during 2009-2014.
Less than 15% of Indian population has some form of health insurance coverage. By 2020, the figure is forecast to reach 45%.
The Indian health insurance industry is dominated by four public sector companies: National, New India, Oriental and United India with the market share of around 60%.

Diagnostics (3%)
Looking at the current growth, the Indian diagnostic market is expected to grow at CAGR of 21% during 2015-2020.
Major growth is expected in hematology, reagents, molecular diagnostics (currently accounting for the largest share of 30-40%), and specially diagnostics.

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