HOSPITAL AND HEALTHCARE INDUSTRY

9/8/2019 HOSPITAL AND HEALTHCARE INDUSTRY

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Contents
Introduction
Top Players
Segments
Market Size
Shareholding
CSR Policies
PESTEL Analysis
Government Initiatives
Controlling Ministry and Regulators
Issues affecting Industry
Market overview
Recent Trends and Developments

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 Introduction & Nature
• 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.
• Indian healthcare delivery system is categorised 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 centres (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.

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 Top Players in Healthcare industry
• AIIMS
• Apollo Hospitals
• Fortis Healthcare Limited
• Thyrocare Technologies Limited
• Wockhardt Hospitals

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 Segments
Government hospitals – It includes healthcare centres, district hospitals and
general hospitals.
Hospitals
Private hospitals – It includes nursing homes and mid-tier and top-tier private
hospitals.

Pharmaceutical It includes manufacturing, extraction, processing, purification and packaging

of chemical materials for use as medications for humans or animals
Healthcare Diagnostics
It comprises businesses and laboratories that offer analytical or diagnostic
services, including body fluid analysis.

Medical It includes establishments primarily manufacturing medical equipment and

Equipment supplies, e.g. surgical, dental, orthopaedic, ophthalmologic, laboratory
instruments, etc.
and Supplies

Medical It includes health insurance and medical reimbursement facility, covering an

individual’s hospitalisation expenses incurred due to sickness.
Insurance
Telemedicine has enormous potential in meeting the challenges of healthcare
Telemedicine delivery to rural and remote areas besides several other applications in
education, training and management in health sector.
Source:Hospital Market – India by Research on India, TechSci Research
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 Market Size
• The healthcare market can increase three fold
to Rs 8.6 trillion (US$ 133.44 billion) by 2022.
• India is experiencing 22-25 per cent growth in
medical tourism and the industry is expected to
reach US$ 9 billion by 2020.
• There is a significant scope for enhancing
healthcare services considering that healthcare
spending as a percentage of Gross Domestic
Product (GDP) is rising. The government’s
expenditure on the health sector has grown to
1.4 per cent in FY18E from 1.2 per cent in
FY14. The Government of India is planning to
increase public health spending to 2.5 per cent
of the country's GDP by 2025

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Source:Hospital Market – India by Research on India, TechSci Research HOSPITAL AND HEALTHCARE INDUSTRY 6
 Shareholding
• The hospital industry in India, accounting for 80% of the total healthcare
market, is witnessing a huge investor demand from both global as well as
domestic investors. The diagnostics industry in India is currently valued at $ 4 bn.
• The share of organized sector is almost 25% in this segment (15% in labs and
10% in radiology).
• The primary care industry is currently valued at $ 13 bn. The share of
organized sector is practically negligible in this case.

9/8/2019 Source: https://www.investindia.gov.in/sector/healthcare HOSPITAL AND HEALTHCARE INDUSTRY 7

CSR POLICIES
Manipal Hospitals :
Promoting education, including special education and employment enhancing
vocation skills especially among children, women, elderly, and the differently abled
and livelihood enhancement projects.
Promoting gender equality, empowering women, setting up homes and hostels for
women and orphans; setting up old age homes, day care centres and such other
facilities for senior citizens and measures for reducing inequalities faced by social
and economically backwards groups.
Training to promote rural sports, nationally recognized sports, paralympic sports and
Olympic sports.
Ensuring environmental sustainability, ecological balance, protection of flora and
fauna, animal welfare, agroforestry, conservation of natural resources and
maintaining quality of soil, air and water

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Source: https://www.manipalhospitals.com/csr-policy HOSPITAL AND HEALTHCARE INDUSTRY 8
CSR POLICIES
Torrent Pharma
Project Details: REACH- Paediatric healthcare programme
Implementation by: Tornascent Care Institute
Amount spent: INR 15.00 Cr
Location: Gujarat (Surat, Bharuch, Kheda, Mehsana)
Torrent Pharmaceuticals Limited initiated a Paediatric Health Care Program REACH -
Reach EAch CHild under the aegis of Tornascent Care Institute.
Paediatric health check up camps were organised under the banner of “Shaishav” in
four villages in the vicinity of the establishments of the Company as a pilot project.
More than 1200 children under the age of 6 years were medically examined.
Remedial support under the supervision of Paediatricians was provided to the
identified anaemic and malnourished children. Support is also being provided to
special cases with chronic ailments through further medical treatment and
management on need basis
Source: http://www.torrentpharma.com/Index.php/site/info/beyondBusiness
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CSR POLICIES
Cadila Healthcare Ltd.
Project Details: To serve the needy and underprivileged cancer patients.
Implementation By: Gujarat Cancer Society
Amount spent: INR 14.45 Cr
Location: Ahmadabad, Gujarat
The Company has contributed to the GCS Medical College, Hospital and Research Centre (GCSMCH) which
has been set up in public-private partnership by the Gujarat Cancer Society (GCS) and the Government of
Gujarat. GCS has been providing comprehensive cancer care and treatment over the last five decades to
the less privileged and economically disadvantaged sections of the society.
Contribution made in different ways
1. Contribution towards creating infrastructure and renovation of hospital.
2. Contribution towards free/ concessional rate medicines and other services to the poor patients
3. Contribution towards subsidized food and other consumables
4. Contribution towards purchasing new medical equipment, professional and consultation fees and
fellowship fees for the hospital.

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Source: https://zyduscadila.com/company HOSPITAL AND HEALTHCARE INDUSTRY 10
 PESTEL
 Political: The healthcare industry is impacted by many factors including,
insurance mandates, tax legislation changes, and consumer protection.
Government spending for healthcare can be affected by tax policy changes. It
can be a benefit, allowing for increased subsidies. Or it can be a cause for
concern. Governmental changes can affect the public and the healthcare
services they’re entitled to, especially with changing healthcare bills and plans.
 Economic: Healthcare organizations will be affected by many economic
factors, especially inflation, unemployment, and interest rates. Any of these
changes can change how the public is able to spend their money, impacting
policy spending. Companies who manufacture medical devices won’t have many
people able to pay their rate if the unemployment rate is increased. Likewise, if
less people are able to work, they won’t qualify for work benefits, including
healthcare. For people without these benefits, it’s likely they won’t be able to
pay the entire cost of any hospital or emergency room visit. They’re less likely to
seek help when they become ill. The public will have a limited selected of health
services they can actually afford.
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 PESTEL
• Social: Healthcare relies on understanding the changes in
demographics and public values. Certain communities can share fears,
beliefs, and cultural norms. If a healthcare professional or hospital isn’t
aware of these conditions while they treat that public, it can cause
problems. Additionally, medical professionals need to stay on their
toes about new trends
• Technology: The healthcare industry is seeing positive changes in
treatments because of technological advancements. Developments with
medical devices allow patients to receive better care.

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 Government Initiatives
• Pradhan Mantri Jan Arogya Yojana (PMJAY)
• Tax incentives
• Recent Initiatives
• National Health Mission(NHS)
• Pradhan Mantri Surakshit Matritva Abhiyan (PMSMA)
• Pradhan Mantri Swasthya Suraksha Yojana(PMSSY)
• Mission Indradhanush
• Rashtriya Swasthya Bima Yojna
• Ayushman Bharat

9/8/2019 Source-TechSci Research , News Articles Press Information Bureau HOSPITAL AND HEALTHCARE INDUSTRY 13
 Controlling Ministry and Regulatory Bodies
 Ministry of Health and Family Welfare (MoHFW)
i) Department of Health
ii) Department of Family & Welfare
iii) Department of AYUSH
 Indian Council of Medical Research (ICMR)
 Indian Medical Association (IMA)
 Central Drug Research Institute (CDRI)

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 Issues affecting the industry
 Infrastructure: The existing healthcare infrastructure is just not enough to meet the
needs of the population. The central and state governments do offer universal
healthcare services and free treatment and essential drugs at government hospitals.
However, the hospitals are, as we said, understaffed and under-financed, forcing
patients to visit private medical practitioners and hospitals.
 Insurance: India has one of the lowest per capita healthcare expenditures in the
world. Government contribution to insurance stands at roughly 32 percent, as opposed
to 83.5 percent in the UK. The high out-of-pocket expenses in India stem from the fact
that 76 percent of Indians do not have health insurance.
 Rural-urban disparity: The rural healthcare infrastructure is three-tiered and includes a
sub-center, primary health centre (PHC) and CHC. PHCs are short of more than 3,000
doctors, with the shortage up by 200 per cent over the last 10 years to 27,421.
There are, however, potential catalysts to improve the quality of healthcare in India.

9/8/2019 Source- News Article https://www.firstpost.com/india/world-health-day-2019- HOSPITAL AND HEALTHCARE INDUSTRY 15

challenges-opportunities-in-indias-81b-healthcare-industry-3544745.html
 Market Overview
 During 2008-22, the market is expected
to record a CAGR of 16.28 per cent.
 The total industry size is estimated to
touch US$ 160 billion by 2017 and US$
372 billion by 2022.
 The hospital industry in India stood at Rs 4
trillion (US$ 61.79 billion) in FY17 and is
expected to increase at a Compound
Annual Growth Rate (CAGR) of 16-17 per
cent to reach Rs 8.6 trillion (US$ 132.84
billion) by FY22.
 The industry is growing at a tremendous
pace owing to its strengthening coverage,
services and increasing expenditure by
public as well private players.

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Source- Frost and Sullivan, LSI Financial Services, Deloitte, TechSci Research HOSPITAL AND HEALTHCARE INDUSTRY 16
 Rise in Healthcare Expenditure
• This is due to rising incomes, easier access to
high-quality healthcare facilities and greater
awareness of personal health and hygiene.
• Greater penetration of health insurance aided
the rise in healthcare spending, a trend likely
to intensify in the coming decade.
• Economic prosperity is driving the improvement
in affordability for generic drugs in the
market.
• The government’s expenditure on the health
sector has grown to 1.4 per cent of GDP in
FY18E from 1.2 per cent of GDP in FY14.
• The Government of India is planning to
increase public health spending to 2.5 per cent
of the country's GDP by 2025.

9/8/2019 Source-World Bank, Economic Survey FY18 HOSPITAL AND HEALTHCARE INDUSTRY 17
 TRENDS IN HEALTHCARE INDUSTRY
 Shift from communicable to lifestyle diseases
 Expansion to tier-II and tier-III cities
 Artificial Intelligence(AI)
 Home healthcare
 Increasing penetration of health insurance
 Technological initiatives
 Luxury offering

Source-: Business Standard, Ministry of External Affairs, Ministry of External Affairs

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