Indian healthcare is a complex mixed public-private model, with limited government funded public healthcare, alongside pricier and urban-concentrated private providers. In 2015 India spent approximately 4.85% of GDP on healthcare; 32% funded publicly and 68% funded privately, totaling €70 expenditure on healthcare per capita.
The healthcare system in India is still heavily under review and being worked at, since healthcare is not universal nor accessible equally in all areas of India’s vast territory.
Typically, the state provides some limited form of public healthcare through certain secondary and tertiary facilities in larger key cities, and primary healthcare through primary healthcare centers (PHC) in rural settings. The private sector accounts for the largest share of secondary and tertiary care, with a more widely distributed network of care facilities throughout tier 1 and 2 locations and other substantially large cities.
Many in the international investment community have identified healthcare in India as a major business opportunity, due to the sector’s rapid expansion to meet the needs of India’s growing middle-class.
There are many factors driving this growth, including:
- A population of around 300 m with rising incomes
- Increasing expectations of services and quality
- Greater access to healthcare services
Notably, 65% of rural India uses Ayurveda and medicinal plants as primary healthcare.
Despite India’s relatively low per capita expenditure on healthcare to date, India’s market for medical devices is in the world’s top twenty (e.g. in 2015 India’s medical equipment market was estimated at about €2.3 bn). The market is expected to continue its steady growth until 2018.
Although India has a growing domestic medical device manufacturing sector, the country still imports more than half of its healthcare equipment, in particular high-end technology products.
India has both government and private healthcare providers, however most growth in recent years has occurred in the private sector (which currently contributes about 80% to growth in the healthcare delivery market).
Most medical equipment distribution in India goes through regional distributors who have networks of sub-distributors. The use of a local, well-qualified distributor helps in establishing good relationships and influencing buying decisions.
Smaller medical electronic manufacturers may find it difficult to compete with the larger, branded medical electronics manufacturers unless the product has niche applications.
Regardless of the electronics equipment being imported, a rigorous after-sales servicing plan is always expected.
Hospitals and healthcare hubs
Faced with the constraints of extreme poverty and a severe shortage of resources, Indian hospitals have had to operate more nimbly and creatively to serve the vast number of poor people in need of medical care.
Due to the fact that Indians on average bear 85% of healthcare costs out-of-pocket, providers must deliver value. (Unfortunately, there have been problems around ill-informed patients being overcharged by providers.) For the consumer to a certain degree, and particularly for the informed and competing providers, value-based competition is a reality in India.
This tightly coordinated web cuts costs by concentrating the most expensive equipment and expertise in a hub, rather than duplicating it in every village. It also creates specialists at the hubs who, while performing high volumes of focused procedures, develop the skills that will improve quality.
An MRI machine might be used 4 to 5 times a day in the USA, yet 15 to 20 times a day in an Indian hospital.
Many of India’s private hospitals are gaining ISO9001 certification and/or the Joint Commission International USA (the Gold Standard accreditation for US and European hospitals) to communicate that the provisions entail high levels of recognized patient care and patient safety.
Private sector is the main provider
Private healthcare providers account for the majority of healthcare services and expenditure in India. Public healthcare insurance and coverage is very limited and under-developed, resulting in a low accessibility of healthcare for the majority of the low-income population.
Trends impacting the Indian Healthcare System
Accompanying the popularity and growth of medical tourism, some of the major hospitals have developed ties with leading star hotels, airlines and restaurant chains to accommodate their international patients.
In the healthcare industry, an emerging trend and novel concept in India is for the inclusion of hotels in the hospital campus. It will provide comprehensive services to their visitors and patient attendants in addition to basic health services.
Currently, many hospitals and wellness centers are looking towards a comprehensive and holistic approach to treat their patients. Many hospitals are developing ties with holistic health centers to provide traditional treatments with conventional systems.
India, a historically elitist and class-based society, had a dominant ruling class that concentrated healthcare development upon the establishment of extensive tertiary care facilities and medical colleges with high-end technology and treatments in preferred cities, instead of developing village provisions. Often applying the funds of international health agencies, the healthcare development was more focused on catering to urban populations (which were and remain the minority) rather than developing solutions and primary healthcare facilities for the rural populations and areas. An emphasis on vertical disease control, instead of developing a wide-spread basic and general healthcare, continue to mark the Indian healthcare system to this day.
Accordingly, there has always been a much higher expenditure in urban areas in comparison to rural India on medical care and capital equipment.
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