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Working towards building a healthier India!

India's healthcare market may see threefold jump in value terms to USD 372 bn by 2022. In 2017, Indian healthcare sector stood as the 4th largest employer as the sector employed a total of 319,780 people.

Key components of the Indian healthcare market are Hospitals (government & private hospitals), Pharmaceuticals, Diagnostics (imaging & pathology), Medicals equipment & supplies, Medicals insurance & Tele-medicines.

Growing incidence of lifestyle diseases, rising demand for affordable healthcare delivery systems due to increasing healthcare costs, technological advancements, emergence of telemedicine, rapid health insurance penetration, mergers and acquisitions helping to reach untapped markets and government initiatives like e-health together with tax benefits, incentives and a host of upcoming regulatory policies are driving healthcare market in India.

  •  By 2020, the Healthcare Information Technology (IT) market which is currently valued at USD 1 bn, is expected to grow 1.5 times
  •  By 2020, India is expected to rank amongst the top 3 healthcare markets in terms of incremental growth
  •  Over 2012-22, diagnostic market is expected to grow at a CAGR of 20.4% to USD 32 bn from USD 5 bn in 2012
  •  Over 2015-20, the In-Patient market is expected to grow at a CAGR of 13%

 

100% FDI allowed under automatic route & upto 100% FDI allowed under Government route.

For more details, refer FDI Policy 2017

HIGHLIGHTS

  • ‘NHP Scheme’ - World's largest government-funded healthcare programme
  • India plans to create 1 mn skilled healthcare providers by 2022
  • Healthcare has become one of India's largest sectors both in terms of revenue & employment

Industry Scenario

The Indian healthcare industry is expected to reach USD 127 bn by 2022.

The industry is growing at a tremendous pace owing to its strengthening coverage, services and increasing expenditure by public as well as private players.

Healthcare in India comprises hospitals, medical devices, clinical trials, outsourcing, telemedicine, medical tourism, health insurance and medical equipment. The industry is growing at a tremendous pace owing to its strengthening coverage, services and increasing expenditure by public as well private players.

  •  The Indian medical tourism industry is expected to show 2X growth to become a USD 6 bn industry by the end of 2018 from USD 3 bn in 2017. Moreover, medical tourist arrivals in India increased more than 50% to 2,00,000 in 2016 from 1,30,000 in 2015.
  •  The Indian hospital industry which contributes to around 80% of the total market is likely to attract large investments. The industry is currently valued at UDD 61.8 bn (2017) which is expected to reach USD 132 bn by 2023 (CAGR: 16-17%).
  •  Indian diagnostics industry is currently valued at USD 4 bn. Share of organised sector is almost 25% in this industry (15% in labs & 10% in radiology).
  •  Indian primary care industry is currently valued at USD 13 bn. Share of organised sector is practically negligible in this case.

Growth Drivers

GD
  • Total pvt. hospitals worth in India

    USD 50-55 bn

  • Market contribution of organised sector

    5-6%

  • Pvt. sector's share in hospital beds

    40%

  • Industry CAGR (2015-20)

    22.9%

Key policies

Ayushman Bharat (Modicare)

The Government announced two major initiatives in health sector, as part of Ayushman Bharat programme. This policy is aimed at making path breaking interventions to address health holistically, in primary, secondary and tertiary care systems, covering both prevention and health promotion.

The initiatives are as follows: - 

(i) Health and Wellness Centre: Under this 1.5 lakh centres will bring the health care system closer to the homes of people. These centres will provide comprehensive health care, including for non-communicable diseases and maternal and child health services. The Budget has allocated USD 177.8 mn for this flagship programme. Contribution of private sector through CSR and philanthropic institutions in adopting these centres is also envisaged.

 

(ii) National Health Protection Scheme: - The second flagship programme under Ayushman Bharat is National Health Protection Scheme, which will cover over 10 crore poor and vulnerable families (approximately 50 crore beneficiaries) providing coverage upto USD 7410 per family per year for secondary and tertiary care hospitalization.  This will be the world’s largest government funded health care programme. Adequate funds will be provided for smooth implementation of this programme.

National Health Policy, 2017

The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi in its meeting during March 2017, has approved the National Health Policy, 2017 (NHP, 2017).  

The Policy seeks to reach everyone in a comprehensive integrated way to move towards wellness.  It aims at achieving universal health coverage and delivering quality health care services to all at affordable costs. The key highlights are:

 

(i) This Policy looks at problems and solutions holistically with private sector as strategic partners. It seeks to promote quality of care, focus on emerging diseases and investment in promotive and preventive healthcare. The policy is patient centric and quality driven. It addresses health security and make in India for drugs and devices.

 

(ii) The main objective of the National Health Policy 2017 is to achieve the highest possible level of good health and well-being, through a preventive and promotive health care orientation in all developmental policies, and to achieve universal access to good quality health care services without anyone having to face financial hardship as a consequence.

 

(iii) In order to provide access and financial protection at secondary and tertiary care levels, the policy proposes free drugs, free diagnostics and free emergency care services in all public hospitals.

 

(iv) The policy envisages strategic purchase of secondary and tertiary care services as a short-term measure to supplement and fill critical gaps in the health system.

 

(v) The Policy recommends prioritizing the role of the Government in shaping health systems in all its dimensions. The roadmap of this new policy is predicated on public spending and provisioning of a public healthcare system that is comprehensive, integrated and accessible to all.

Rashtriya Arogya Nidhi (RAN)

The scheme Rashtriya Arogya Nidhi (RAN) is under implementation in the country. The details of scheme and salient features are given below: 

 

(i) The Rashtriya Arogya Nidhi (RAN) has been set up vide Resolution No. F-7-2/96-Fin-II dated 13/1/1997 and registered under the Societies Registration Act, 1860, as a Society. The RAN was set up to provide financial assistance to patients, living below poverty line and who are suffering from major life threatening diseases, to receive medical treatment at any of the super speciality Hospitals/ Institutes or other Government hospitals. The financial assistance to such patients is released in the form of ‘one-time grant’, which is released to the Medical Superintendent of the Hospital in which the treatment has been/is being received.

 

(ii) Under RAN Revolving Funds have been set up in 13 Central Government Hospitals/Institutions located all over India for providing financial assistance for treatment up to USD 2964. In addition financial assistance is provided for individual cases referred by Government hospitals/institutions, which do not have a Revolving Fund and for cases referred by 13 Government hospitals/ institutions with Revolving Funds for assistance exceeding USD 2964.        

Relaxation of FDI Norms

100% FDI is allowed under the automatic route for greenfield projects. For brownfield project investments, up to 100% FDI is permitted under the government route

FDI Facts

  • FDI inflows (USD) in hospitals and diagnostic centres during April 2000 - December 2017

  • Share of total FDI inflows

  • FDI is allowed in construction of hospitals under the automatic route

  • FDI is allowed in greenfield projects under the automatic route and in brownfield projects through government route

Recent Investments

  • April 2018 - DM Aster Group Plans to invest USD 59.6 mn in Chennai to launch a 500 bed multi-speciality hospital.

  • March 2018 - Lenskart to invest around USD 5 mn for increasing its manufacturing capacity

  • March 2018 - Kent RO is investing USD 29.8 mn in a manufacturing set up in Noida, Uttar Pradesh.

  • February 2018 - Metropolis Health Services Group plans to invest USD 14.89 mn to open 30 labs and 700 collection centres. According to reports they have plans to increase their presence in Southern, Western and Northeast states.

  • January 2018 - Nova Medical centres recently opened state of the art centres in Lucknow and plans to add 20 more centres in India, in partnership with IVI of Spain.

  • March 2017 - Kerala Institute of Medical Sciences (KIMS) has raised USD 200 mn from True North, a private equity fund, for a 40% stake in the company, which will be utilised towards funding its growth plans.

Major Investors