Health care industry :

Basic detail about the health care industry :

The health care industry or health profession treats patients who are injured,
sick, disabled, or infirm. The delivery of modern health care depends on an
expanding interdisciplinary team of trained professionals.[1][2]

For purposes of finance and management, the healthcare industry is typically

divided into several groups and sectors. The Global Industry Classification
Standard and the Industry Classification Benchmark divide the industry into two
main groups: (1) health care equipment & services and (2) pharmaceuticals,
biotechnology & related life sciences. Health care equipment and services
comprise companies that provide medical equipment, medical supplies, and health
care, such as hospitals, home health care providers, and nursing homes. The second
industry group comprises sectors companies that produce biotechnology,
pharmaceuticals, and miscellaneous scientific services.

Sector structure
The Indian healthcare sector is expected to become a US$ 280 billion industry by 2020 with spending on health
estimated to grow 14 per cent annually, according to a report by an industry body. "Healthcare has emerged as one
of the most progressive and largest service sectors in India with an expected GDP spend of 8 per cent by 2012 from
5.5 per cent in 2009. It is believed to be the next big thing after IT and predicted to become a US$ 280 billion industry
by 2020," the report said.

At present the sector is estimated to be around US$ 40 billion and will grow to US$ 78.6 billion by 2012.

As per a study by an industry body and Ernst & Young, India would require another 1.75 million beds by the end of
2025. The public sector however is likely to contribute only around 15-20 per cent of the required US$ 86 billion
investment. The corporate India is therefore, leveraging on this business potential and various health care brands
have started aggressive expansion in the country. Some of the companies that plan to increase their footprints
include Anil Ambani’s Reliance Health, the Hindujas, Sahara Group, Emami, Apollo Tyres and the Panacea Group.

Sahara Group is planning several healthcare projects such as a 200-bed multi-specialty tertiary care hospital at
Gorakhpur in Uttar Pradesh, a 1,500-bed multi super-specialty, tertiary care hospital at Aamby Valley City and 30-bed
multi-speciality secondary care hospitals across all the 217 Sahara City Homes Townships.

Meanwhile, Artemis Health Sciences (AHS), a health care venture of the Apollo Tyres Group, is also planning to
establish four to eight multi-specialty hospitals in Punjab, Uttar Pradesh, Madhya Pradesh, Rajasthan and Haryana
over the next three years.
Charecterstics of healthcare industries :

1. Demand charecteristics :

2.Supply charecteristics

Market size :

The size of the Indian medical technology industry may touch US$ 14 billion by 2020 from US$ 2.7 billion in 2008 on
account of strong economic growth, higher public spending and private investments in healthcare, increased
penetration of health insurance and emergence of new models of healthcare delivery, according to a report ‘Medical
Technology in India: Enhancing Access to Healthcare through Innovation’ released by PwC and an industry body.

Healthcare Industry Segments

 Hospitals & healthcare delivery systems (acute care)

 Behavioral health
 Rehabilitation
 Home health
 Long-term care
 Physician organizations (PHOs, POs, IPAs, et. al.)
 Other ancillary providers
 Managed care organizations/Payers
 Other national and international consulting firms

Growth Rate :

The demand for healthcare services in India has grown from $ 4.8 billion in
1991 to $ 22.8 billion in 2001-02, indicating a compounded annual growth rate
 of 16 per cent. The healthcare industry accounted for 5.2 per cent of India’s
GDP in 2002, and this figure could reach $ 47 billion or 6.2—7.5 per cent of
GDP by 2012. On the one hand, the Indian middle class, with its increasing
purchasing power, is more willing than ever before to pay more for quality
healthcare. On the other, the supply of healthcare services has grown steadily,
as the private sector becomes more involved in owning and running hospitals.

This report describes the growth trends in healthcare services. The report analyses the
increasing share of privately owned healthcare facilities. Profile of major players and
impact of major regulatory changes are also highlighted in this report.

KEY GROWTH DRIVERS OF THIS INDUSTRY

There are various factors, which govern the growth of the medical and healthcare industry. Some of the key factors are:

 Continuous investments in research & development has resulted in increased productivity and better quality of drugs,
medicines, medical instruments, hospital equipment, and other medical supplies used in medical industry.
 Provides employment to large chunk of human population. United States of America has the largest workforce i.e. one in
every 11 US residents employed in the health care business.
 Increased costs in the medical treatment in the developed nations have driven patients to migrate to Asian countries.
 Rise in ailments among the ageing population especially in developed nations has led to the increase in demand of variety
of drugs or medicines.
 Innovative techniques of drug discovery and drug development, new cures and treatments, gene testing for insurance,
genetic predictions of disease and related issue, human cloning and reproductive technologies are the other key drivers of
the medical industry

FUTURE PERSPECTIVE OF THE INDUSTRY

The future perspective of medical industry seems to be immensely bright and
encouraging for this industry in terms of the expected surge in global demand and
upsurge in investments. Several trends such as globalization, continuous investments in
research and development, newer techniques of drug development and discovery,
product proliferation, mergers and acquisitions are the key drivers of this industry.
Increasing corporatization of Private Healthcare in the backdrop of a growing and affluent
middle class is an emerging trend that has been pushing the growth of this industry.
Health Insurance and Medical Tourism are the other significant trends, which are
governing the global healthcare and medical industry. Most of the nations are now
emphasizing on the accreditation of medical professionals so as to ensure legitimacy of
the services provided by them. Robust advancement in the field of information technology
will allow critical medical data to be processed and transferred quickly over larger
distances, thereby saving time of both the patients and physicians in the speeding
delivery of treatment.