Healthcare in India

The Indian Healthcare Scenario

• Current Scenario
• Major Players
• Future Outlook

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The Social Burden

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The Indian Healthcare Market

India Spends US $ 22.7 Billion

* On Healthcare

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Source: National Accounts Statistics 2001; McKinsey analysis
Healthcare Market (2005 vs 2025)

Healthcare is the third largest growth

* segment in India

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Source: National Accounts Statistics 2001; McKinsey analysis
Healthcare : Demand & Supply

90 % patients need primary and secondary care

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 Global Healthcare Infrastructure
Beds Physicians Nurses
Countries Per ’000 population Per ’000 population Per ’000 population

Distribution is skewed towards

Urban/ Metro Areas
0.9
1.5 1.2
India

1.6
Low income 1.5 1.0
(e.g., sub-Saharan Africa)

4.3 1.8 1.9

Middle income
(e.g., China, Brazil)

High income 7.4 1.8 7.5

(e.g., US, Western Europe)

World average 3.3 1.5 3.3

Total expenditure in India as percentage of GDP : 5.0 (2004)

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 Sectorwise Distribution
Sector Direct employment Revenues/GDP
Million, 2000-2001 Per cent, 2000-2001

Healthcare
4.0 5.2

Education 5.3 4.8

Healthcare is the
Retail banking 1.0 3.5 largest service
industry in
Power
1.2 3.0 terms of
revenues and
Railways
1.6 1.8 the second
largest after
Telecom 0.8 1.4 education in
terms of
Hotels, restaurants 1.7 0.9 employment
IT 0.4 1.7

By 2012, the Healthcare sector could account

for 7- 8% of GDP and provide direct and indirect employment to 9 million

Source: Vaatsalya.com
National Accounts Statistics, 2001; Manpower profile; CBHI; McKinsey analysis
Healthcare Spectrum

Vaccination
Preventive care Check-ups
Heath camps

For Minor ailments

Out-patient care
For Major ailments

Medical
In-patient care
Surgical

As economy improves, greater stress on preventive care

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India Prefers Private Providers

Private expenditure as % of total expenditure on health : 82.7 (2004)

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Source: CII-McKinsey Report, 2002
 Public and Private Sector

India will have the largest number of diabetics in the world in next 3 years

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Source: NSSO, 52nd Round
The Current Status Of Healthcare
RURAL (per 1000 population)
Hospital Beds = 0.2
Doctors = 0.6
Public Expenditures = Rs.80,000
Out of pocket = Rs.750,000
____________________
IMR = 74/1000 LB
U5MR = 133/1000 LB
Births Attended = 33.5%
Full Immunz.=37%
Median ANCs=2.5
Out of pocket semi-urban and rural expenses higher than Urban
URBAN (per 1000 population)
Hospital Beds = 3.0
Doctors = 3.4
Public Expenditures = Rs.560,000
Out of Pocket = Rs.1,150,000
____________________
IMR = 44/1000 LB
U5MR = 87/1000 LB
Births Attended = 73.3%
Full Immunz.= 61%
Median ANCs=4.2
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Healthcare trends in India

India Diabetes Prevalence: 31,705,000(2000) 79,441,000(2030)

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Drivers of Growth
Health Insurance penetration

Increasing disease burden – lifestyle diseases

Awareness of healthcare and preventive care

Employer provided healthcare

Community based health plans

Increasing health awareness, Increasing spends on health

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Health Insurance

Private Health Insurance to cover 20% to 25% by 2020

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The Demographics

Middle Income Class in India to grow to 400 to 500 Million by 2015

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Healthcare – Urban vs Rural

Healthcare services one of the fastest growing segment in India

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Major Players
Clinics & Nursing Homes
• Single doctor or family of
doctors
• Good local network and word of
mouth clientele
• Limited range of services and
facilities
Government Hospitals
• Ill equipped to provide efficient
healthcare
• Unavailability of appointed
doctors and hospital staff
• Not favoured by semi-urban
populations
• Standard of care is abysmal
Healthcare services is highly unorganised segment in India
Charitable Trusts
• Multispeciality hospitals run
by religious or social groups
• Standard of care is driven by
individual doctors
• Subsidised pricing offset by
donations
• Sub-optimal facilities
Organised Sector
• Very few players in this sector
• Regional in focus, usually
offshoots of tertiary players
• Most current players are
Urban Centric
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 Huge Growth Potential
US $ IN BILLION at 2000-2001 prices
60.0

51.0 17.0
43 8.0
8.0

19 43.0
43.0
Government 3.76
spending
35.0

Private 15.24
spending

2001 2012 2012 2012

Scenario 1: Scenario 2: Scenario 3:
Baseline increase Baseline with insurance Baseline with insurance
in private spend in middle class and high government
Government spending
Key Assumption* Spending 1% GDP 1% GDP 2% GDP

Majority of the spending in Private Sector

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Healthcare Services Growth

Healthcare services – expected CAGR of 11 to 13%

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 The Market Opportunity
The Indian Healthcare Delivery market is estimated at US$
18.7 billion. Nearly 65 % of the healthcare services market has
been captured by the private sector.

The industry is growing at about 13 % annually and is expected

to grow at 15 % over the next four to five years.

A recent CII - McKinsey & Co. study forecasts growth from US$
18.7 billion to around US$ 45 billion – equivalent to 8.5 % of
GDP by 2012. Private healthcare is expected to account for 75
% of this spending

McKinsey : Rural healthcare will account for half of the total consumption

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 Share of the wallet

McKinsey : Healthcare share of the wallet in India will be very close to China.

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 Investment in India (Estimates)

Healthcare
23-32

Investment
needs of the
healthcare
Power 99-131 sector are
comparable to
other
infrastructure
sectors
Telecom
41-53

Roads 25-35

Healthcare in India will grow at 10.8% annually to reach USD 190 billion

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Who is Vaatsalya?
Vaatsalya is a corporate healthcare network focused on
providing affordable, efficient and sustainable healthcare
service to semi-urban & rural areas and was founded by two
physicians Dr. Ashwin Naik and Dr. Veerendra Hiremath in late
2004.

Vaatsalya intends to eliminate the gap in healthcare access by

creating India’s first network of hospitals exclusively in semi-
urban and rural areas and bringing urban healthcare facilities
and services to non-urban areas.

More than 70% of India lives in Semi-Urban and Rural India

300 Million Middle Income families

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