Healthcare Industry

Healthcare Industry

Under International Silico Business Private Limited, we have set up Sanjivanee Pharmacy , Sanjivanee Clinic at Siddha Town Rajarhart.

The healthcare industry is an aggregation and integration of sectors within the economic system that provides goods and services to treat patients with curative, preventive, rehabilitative, and palliative care. It includes the generation and commercialization of goods and services lending themselves to maintaining and re-establishing health. The modern healthcare industry includes three essential branches which are services, products, and finance and may be divided into many sectors and categories and depends on the interdisciplinary teams of trained professionals and paraprofessionals to meet health needs of individuals and populations.

At Silico, we ensure to develop the infrastructure for delivering the best medical services across India. The healthcare industry is one of the world's largest and fastest-growing industries. Consuming over 10 percent of gross domestic product (GDP) of most developed nations, health care an enormous part of a country's economy. U.S. health care spending grew 4.6 percent in 2019, reaching $3.8 trillion or $11,582 per person.  As a share of the nation's Gross Domestic Product, health spending accounted for 17.7 percent. The per capita expenditure on health and pharmaceuticals in OECD countries has steadily grown from a couple of hundred in the 1970s to an average of US$4'000 per year in current power parities.

India has a multi-payer universal health care model that is paid for by a combination of public and private health insurance funds along with the element of almost entirely tax-funded public hospitals. The public hospital system is essentially free for all Indian residents except for small, often symbolic co-payments in some services. At the federal level, a national publicly funded health insurance program was launched in 2018 by the Government of India, called Ayushman Bharat. This aimed to cover the bottom 50% (500 million people) of the country's population working in the unorganized sector (enterprises having less than 10 employees) and offers them free treatment at both public and private hospitals. For people working in the organized sector (enterprises with more than 10 employees) and earning a monthly salary of up to ₹21,000 are covered by the social insurance scheme of Employees' State Insurance which entirely funds their healthcare (along with unemployment benefits), both in public and private hospitals. People earning more than that amount are provided health insurance coverage by their employers through either one of the four main public health insurance funds which are the National Insurance Company, The Oriental Insurance Company, United India Insurance Company and New India Assurance or a private insurance provider. All employers in India are legally mandated to provide health insurance coverage to their employees and dependents as part of Social Security in India.

As of 2020, 300 million Indians are covered by insurance bought from one of the public or private insurance companies by their employers as group or individual plans. Indian nationals and foreigners who work in the public sector are eligible for a comprehensive package of benefits including, both public and private health, preventive, diagnostic, and curative services and pharmaceuticals with very few exclusions and no cost sharing. Most services including state of the art cardio-vascular procedures, organ transplants, and cancer treatments (including bone marrow transplants) are covered. Employers are responsible for paying for an extensive package of services for private sector expatriates (through one of the public or private funds) unless they are eligible for the Employees' State Insurance. Unemployed people without coverage are covered by the various state funding schemes for emergency hospitalization if they do not have the means to pay for it. In 2019, the total net government spending on healthcare was $36 billion or 1.23% of its GDP. India had allocated 1.8% of its GDP to health in 2020–21. Since the country's independence, the public hospital system has been entirely funded through general taxation.

The National Health Policy was endorsed by the Parliament of India in 1983 and updated in 2002, and then again updated in 2017. The recent four main updates in 2017 mentions the need to focus on the growing burden of non-communicable diseases, on the emergence of the robust healthcare industry, on growing incidences of unsustainable expenditure due to health care costs and on rising economic growth enabling enhanced fiscal capacity.[10] In practice however, the private healthcare sector is responsible for the majority of healthcare in India, and a lot of healthcare expenses are paid directly out of pocket by patients and their families, rather than through health insurance due to incomplete coverage. Government health policy has thus far largely encouraged private-sector expansion in conjunction with well designed but limited public health programmes.

According to the National Health Accounts report, the total expenditure on health care as a proportion of GDP in 2018 was 3.2%. Out of 3.2%, the governmental health expenditure as a proportion of GDP is just 2%,  and the out-of-pocket expenditure as a proportion of the current health expenditure was 42.06% in 2019 while expenditure of the government and health insurance funds increased to 57%.

Attracting 45 percent of health tourists visiting India and 30 to 40 percent of domestic health tourists, Chennai is termed "India's health capital". The Human Rights Measurement Initiative finds that India is doing 80.5% of what should be possible at its level of income for the right to health.

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.

India’s healthcare delivery system is categorized 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 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. The low cost of medical services has resulted in a rise in the country’s medical tourism, attracting patients from across the world. Moreover, India has emerged as a hub for R&D activities for international players due to its relatively low cost of clinical research.

The Healthcare industry in India comprises of 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 as private players.

Growing incidence of lifestyle diseases, rising demand for affordable healthcare delivery systems due to the increasing healthcare costs, technological advancements, the emergence of telemedicine, rapid health insurance penetration and government initiatives like e-health together with tax benefits and incentives are driving the healthcare market in India.

1. The Indian Healthtech industry was valued at $1.9bn in 2020. By 2023, it is expected to reach $ 5B by 2023 at a CAGR of 39%
2. The digital healthcare market in India was valued at INR 116.61 Bn in 2018, and is estimated to reach INR 485.43 Bn by 2024, expanding at a compound annual growth rate (CAGR) of ~27.41% during the 2019-2024 period
3. By 2022, the diagnostics market is expected to grow at a CAGR of 20.4% to reach $32 bn from $5 bn in 2012
4. The Telemedicine market is the maximum potential eHealth segment in India, which is expected to touch $5.4 Bn by 2025, growing at a compound annual growth rate (CAGR) of 31%
5. Over the next 10 years, National Digital Health Blueprint can unlock the incremental economic value of over $200 bn for the healthcare industry in India
6. India has the world’s largest Health Insurance Scheme (Ayushman Bharat) supported by the government
7. India’s comprehensive investment in Medical Education: INR 17,691.08 Cr invested in 157 new approved Medical Colleges since 2014
8. Ayush sector has witnessed significant growth from $3 bn in 2014 to $18 bn in 2022
9. 100% FDI is allowed under the automatic route for greenfield projects. For investments in brownfield projects, up to 100% FDI is permitted under the government route.

Healthcare has become more focused on innovation and technology over the past two years and 80% of healthcare systems are aiming to increase their investment in digital healthcare tools in the coming five years.

What is the Scenario of the Healthcare Sector in India?

About:

1. Healthcare industry comprises hospitals, medical devices, clinical trials, outsourcing, telemedicine, medical tourism, health insurance and medical equipment.
2. India’s healthcare delivery system is categorized into two major components - public and private.
   1. The government (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.
   2. The private sector provides a majority of secondary, tertiary, and quaternary care institutions with major concentration in metros, tier-I and tier-II cities.

Market Statistics:

1. The Indian healthcare sector is expected to record a three-fold rise, growing at a CAGR (Compound Annual Growth Rate) of 22% between 2016–22 to reach USD 372 billion in 2022 from USD 110 billion in 2016.
2. In the Economic Survey of 2022, India’s public expenditure on healthcare stood at 2.1% of GDP in 2021-22 against 1.8% in 2020-21 and 1.3% in 2019-20.
3. In FY21, gross direct premium income underwritten by health insurance companies grew 13.3% YoY to Rs. 58,572.46 crore (USD 7.9 billion).
4. The Indian medical tourism market was valued at USD 2.89 billion in 2020 and is expected to reach USD 13.42 billion by 2026.
5. Telemedicine is also expected to reach USD 5.5 billion by 2025.

What are the Challenges with the Health Sector?

1. Inadequate Access:
   • Inadequate access to basic healthcare services such as shortage of medical professionals, a lack of quality assurance, insufficient health spending, and, most significantly, insufficient research funding.
   • One of the major concerns is the administrations' insufficient financial allocation.
2. Low Budget:
   • India’s public expenditure on healthcare is only 2.1% of GDP in 2021-22 while Japan, Canada and France spend about 10% of their GDP on public healthcare.
     • Even neighbouring countries like Bangladesh and Pakistan have over 3% of their GDP going towards the public healthcare system.
3. Lack of Preventive Care:
   • Preventive care is undervalued in India, despite the fact that it has been shown to be quite beneficial in alleviating a variety of difficulties for patients in terms of unhappiness and financial losses.
4. Lack of Medical Research:
   • In India, R&D and cutting-edge technology-led new projects receive little attention.
5. Policymaking:
   • Policymaking is undoubtedly crucial in providing effective and efficient healthcare services. In India, the issue is one of supply rather than demand, and policymaking can help.
6. Shortage in Professionals:
   • In India, there is a shortage of doctors, nurses, and other healthcare professionals.
   • According to a study presented in Parliament by a minister, India is short 600,000 doctors.
7. Paucity of Resources:
   • Doctors work in extreme conditions ranging from overcrowded out-patient departments, inadequate staff, medicines and infrastructure.

What is the Potential of the Indian Health Sector?

1. 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.
2. India has all the essential ingredients for the exponential growth in this sector, including a large population, a robust pharma and medical supply chain, 750 million plus smartphone users, 3rd largest start-up pool globally with easy access to VC (Venture Capital Fund) funding and innovative tech entrepreneurs looking to solve global healthcare problems.
3. India will have about 50 clusters for faster clinical testing of medical devices to boost product development and innovation.
4. The sector will be driven by life expectancy, shift in disease burden, changes in preferences, growing middle class, increase in health insurance, medical support, infrastructure development and policy support and incentives.
5. As of 2021, the Indian healthcare sector is one of India’s largest employers as it employs a total of 4.7 million people. The sector has generated 2.7 million additional jobs in India between 2017-22 -- over 500,000 new jobs per year

Way Forward

1. There is an urgent need to improve the infrastructure of public hospitals, which are overburdened as a result of India's large population.
2. The government should encourage private hospitals because they make a significant contribution.
3. Because the difficulties are severe and cannot be tackled just by the government, the private sector must also engage.
4. To improve the sector's capabilities and efficiency, more medical personnel must be inducted.
5. In order to connect the dots in the health system, technology must be used.
   • Medical gadgets in hospitals and clinics, mobile health apps, wearables, and sensors are only a few examples of technology that should be included in this area.