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 Indias GDP in 2002, and this figure could reach $ 47 billion or 6.27.5 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.

Indian healthcare is experiencing a transformation, with the commencement of newer, better IT applications. With the rise in the per capita income of the Indian population, the demand for quality healthcare services in the country has risen. p This has compelled Indian hospitals and services providers to invest in the sector. Consequently, adoption of IT has become one of the top priorities for the Indian healthcare companies. According to a new research Opportunities in Indian Healthcare IT Market, the healthcare IT market in India is projected to become a USD 250 million market by 2010 year end. The research report provides a comprehensive and crisp analysis of the current status and future growth prospects of Indian Healthcare IT market. The report studies the market by segmenting in into two major segments, i.e. Hospital Information System and, Storage and Communication System and substantiates key findings with necessary statistics. Besides this, the report also provides information on the various issues, which if not addressed might hamper the growth of the Indian Healthcare IT market. The report gives an overview of the competitive landscape, in which leading industry players have been covered along with their marketing strategies, operations and business overview. Also highlighted in the report are various opportunities existing in the industry which will help clients in understanding the contemporary industry scenario and making decisions accordingly. Key findings in the report include: - Indias private healthcare sector, which currently contributes around 75 per cent of the total healthcare expenditure in India, is expected to increase its spending on IT products and services substantially in near future - Indias private healthcare sector, which currently contributes around 75 per cent of the total healthcare expenditure in India, is expected to increase its spending on IT products and services substantially in near future - With increasing IT applications and insurance penetration, the demand for EMR is anticipated to increase robustly in next few years. However, initially the scope of the services will be limited to the Metro and Tier I cities only. - With the increasing emphasis on the implementation of hospital information system in the country, the market of instruments such as PACS will grow rapidly. However, the success of these factors will largely depend upon various factors including technology adoption initiatives and cost.

The world healthcare IT market is expected to grow from $99.6 billion in 2010 to $162.2 billion in 2015, at a CAGR of 10.2% from 2010 to 2015. Need to cut healthcare costs, enhance clinical/administrative workflow of hospitals, and huge demand for faster, error-free, efficient healthcare delivery, is fueling the healthcare provider IT market worldwide. Furthermore, the initiatives taken by the government for adoption of healthcare IT systems globally are also a significant driving force. Some of the major initiatives expected to hugely impact the market are the U.S Healthcare reforms and ARRA incentives. EMR is expected to the highest growing market with a CAGR of 16.7% from 2010 to 2015. CPOE is also a fast growing segment with a CAGR of 16.5% from 2010 to 2015. Point of care information systems, specialty care information systems (cardiovascular information systems, oncology information systems), surgical and intensive care information systems are expected to have a combined CAGR of 15.1% from 2010 to 2015. Low cost IT solutions, financing programs, and interoperable solutions are the focus of top healthcare IT solution providers. With rising adoption of healthcare IT, healthcare delivery models are expected to evolve from clinic centric to patient centric models such as preventive healthcare, remote patient monitoring, telemedicine, and home healthcare. Healthcare industry has always faced immense need for cutting edge technology for patient treatments and monitoring. However, the industry has been slow in adopting IT technologies in their workflow. The scenario is nevertheless changing now, with greater need to cut healthcare costs, immense demand for faster, better healthcare delivery along with reduced medical errors. Healthcare IT enhances clinical and administrative workflow and thus is increasingly being used as a strategy to reduce operating costs and improves the efficiency of healthcare delivery. Healthcare IT systems come across as a cost effective solution for augmenting the clinical and administrative workflow of healthcare providers. The significant increase in demand for medical care has also increased the chances of error in diagnosis and claim settlement. This has lead to the introduction of systems such as CPOE (computerized physician order entry systems), integrated systems such as enterprise-wide PACS (picture archive and communication systems), EMR (electronic medical record). These not only helped reduce medical errors, but also helped improve the management of health related information. Understanding the healthcare industry structure can help in gaining an insight into the changing needs of its affiliated IT market. The healthcare industry consists of three major participants the providers, the payors, and the consumers. As the overall industry is moving towards integration, an insight into each participants needs could help system providers design overarching systems that simultaneously cater to all the unmet requirements. Healthcare providers consist of large to small hospitals, clinics, nursing homes, research/educational institutions, and independent physicians. Payors consist of various government and non-government organizations offering insurance policies and claim processing services. Finally, consumers include patients maintaining their medical data. Meditech (U.S.), Cerner Corporation (U.S.), Mckesson Corporation (U.S.), Siemens Healthcare (Germany), Epic Systems (U.S), Allscripts (U.S.), Philips (The Netherlands), and GE Healthcare (U.S.) account for the majority of the market. Scope of the report: This research report evaluates the world healthcare IT market with respect to the product market. The report analyzes geography; forecasting revenues, and trends in each of the following submarkets:

- Hardware - Software - Services Each section will provide market data, market drivers, trends and opportunities, top-selling products, key players, and competitive outlook. This report will also provide market tables for covering the subsegments and micro-markets. In addition, company profiles covering all the sub-segments will be given.

Healthcare Issues
[edit] Malnutrition
42% of Indias children below the age of three are malnourished, almost twice the statistics of sub-Saharan African region of 28%.[1] World Bank estimates this figure to be 60 million children out of a global estimated total of 146 million.[2] Although Indias economy grew 50% from 20012006, its child-malnutrition rate only dropped 1%, lagging behind countries of similar growth rate.[3] Malnutrition impedes the social and cognitive development of a child, reducing his educational attainment and income as an adult.[3] These irreversible damages result in lower productivity.[3]

[edit] High infant mortality rate

Approximately 1.72 million children die each year before turning one.[4] The under five mortality rate and infant mortality rate indicators have been declining, from 202 and 190 deaths per thousand live births respectively in 1970 to 64 and 50 deaths per thousand live births in 2009.[4][5] However, this rate of decline is slowing. Reduced funding for immunization leaves only 43.5% of the young fully immunized.[3] Infrastructures like hospitals, roads, water and sanitation are lacking in rural areas.[6] Shortages of healthcare providers, poor intra-partum and newborn care, diarrheal diseases and acute respiratory infections, also contribute to the high infant mortality rate.[4]

[edit] Diseases
Diseases such as dengue fever, hepatitis, tuberculosis, malaria and pneumonia continue to plague India due to increased resistance to drugs.[7] And in 2011, India finally developed a Totally drugresistant form of tuberculosis.[8] India is ranked 3rd among the countries with the most number of HIV-infected.[9] Diarrheal diseases are the primary causes of early childhood mortality.[10]

These diseases can be attributed to poor sanitation and inadequate safe drinking water in India.[11] However in 2012, India was polio free for the first time in its history.[12] Indians are also at particularly high risk for atherosclerosis and coronary artery disease. This may be attributed to a genetic predisposition to metabolic syndrome and changes in coronary artery vasodilation. NGOs such as the Indian Heart Foundation and the Medwin Foundation have been created to raise awareness about this public health issue.[13][14]

[edit] Poor sanitation

As more than 122 million households have no toilets and 33% lack access to latrines, over 50% of the population (638 million) defecates in the open.[15] This is relatively higher than Bangladesh and Brazil (7%) and China (4%).[15] Although 211 million people gained access to improved sanitation from 19902008, only 31% uses them.[15] 11% of the Indian rural families dispose of child stools safely whereas 80% of the population leave their stools in the open or throw them into the garbage.[15] Open air defecation leads to the spreading of diseases and malnutrition through parasitic and bacterial infections.[16]

[edit] Inadequate safe drinking water

Access to protected sources of drinking water has improved from 68% of the population in 1990 to 88% in 2008.[15] However, only 26% of the slum population has access to safe drinking water[16] and 25% of the total population has drinking water on their premises.[15] This problem is exacerbated by falling levels of groundwater, caused mainly by increasing extraction for irrigation.[15] Insufficient maintenance of the environment around water sources, groundwater pollution, excessive arsenic and fluoride in drinking water pose a major threat to India's health.[15]

[edit] Healthcare infrastructure

The Indian healthcare industry is seen to be growing at a rapid pace and is expected to become a US$280 billion industry by 2020.[17] Rising income levels and a growing elderly population are all factors that are driving this growth. In addition, changing demographics, disease profiles and the shift from chronic to lifestyle diseases in the country has led to increased spending on healthcare delivery.[18] In order to meet manpower shortages and reach world standards India would require investments of up to $20 billion over the next 5 years.[19]

Indian Healthcare Industry to Double in Value by 2012: KPMG

Rising income levels, changing demographics and shift in disease profile from chronic to lifestyle diseases to propel the growth The health infrastructure across Indian states is projected to grow by an average of 5.8 percent per annum between 2009-2013, taking the total expenditure in 2013 to USD 14.2 billion, suggests the Indian Healthcare edition of KPMG's trend monitor. Of the 32 Indian states that the report considered, the six states of Maharashtra, Rajasthan, West Bengal, Uttar Pradesh, Tamil Nadu and Andhra Pradesh are forecasted to represent approximately 50 percent of the expenditure for 2009-2013 period. Speaking on the release of this report, Pradip Kanakia, Head of Markets and Healthcare Services, KPMG, said, "While the Indian healthcare system has grown manifold over the past few years, it has yet not been able to keep pace with the rapid rise in the population. One example of that is the availability of hospital beds in our country against a world average of four beds per 1,000 population, India lags behind at just over 0.7 presently. He added "There is a dire need to introduce some radical reforms in the healthcare infrastructure development process use of PPP models on a larger scale; foreign investments are some which could be considered." The report suggests that there is a growing need to deal with the issues of urban healthcare infrastructure as rural to urban migration has significantly increased the demand for these services. The report also looks into the fact that the Indian healthcare system is controlled by respective state authorities, presenting an opportunity to improve responsiveness to healthcare needs at a more local level. The KPMG analysis suggests that there is uneven focus on healthcare infrastructure in India, the variety of organisational structures and processes in healthcare delivery may result in greater inequalities between geographical areas. Said Ameeta Chatterjee, Director - Corporate Finance, KPMG, "There has been an increasing awareness of private sector involvement in meeting the requirement of the country's health services requirement. The Indian solutions that will evolve need to be focussed on developing affordable, low-cost basic healthcare services with scalability and sustainability as key drivers. The report analyses and suggests that there is opportunity to improve responsiveness to country's healthcare needs at a more local level due to uneven focus on healthcare infrastructure in India. This can be attributed to the healthcare system in the country which is controlled by respective state authorities. The variety of organisational structures and processes in healthcare delivery may result in greater inequalities between geographical areas. There is a growing agenda to deal with the issues of urban healthcare infrastructure as rural to urban migration has significantly increased demand for these services. The report states that the Indian healthcare industry is estimated to double in value by 2012 and more than quadruple by 2017. The main factors propelling this growth are rising income levels, changing demographics and illness profiles, with a shift from chronic to lifestyle diseases. This is likely to result in considerable infrastructure challenges and opportunities. Key Findings

The healthcare sector in India is undergoing a phase of reform propelled by rapid economic growth. Apart from the healthcare providers, emerging markets such as diagnostic chains and medical device manufacturers, are attracting increasing amounts of investment. In comparison to all 32 states, Maharashtra forecasted to maintain its dominance as the state with highest cumulative healthcare infrastructure expenditure, with spend of $ 7.3 billion between 2009 - 2013. Twelve states spent less than $100million each in 2006, together representing less than 4.5 per cent of total national expenditure and 3.6 per cent of the population. Manipur and Nagaland expected to grow the fastest on development of healthcare expenditure over 8 per cent, against an overall national average of 5.8 percent (between 2009 - 2013). Uttar Pradesh that hosts over 16 percent of the population is presently amongst lowest spenders in terms of expenditure per person (less than $ 5 as per 2006 figures, expected to grow to USD 25 between 2009-2013).

Booming Indian healthcare industry

May 19, 2011

Industry Snapshot The Indian healthcare sector is predicted to reach US$ 280 billion by 2020, contributing an expected Gross Domestic Product (GDP) spend of 8 per cent by 2012 from 5.5 per cent in 2009, according to a report by an industry body. Growing population, increasing lifestyle related health issues, cheaper treatment costs, thrust in medical tourism, improving health insurance penetration, increasing disposable income, government initiatives and focus on Public Private Partnership (PPP) models are some of the driving factors for the growth of healthcare sector in India. Some of the key players in the Indian healthcare industry who are helping in making the sector buyout include Apollo Hospitals Enterprise Ltd., Fortis Healthcare Ltd, Max Hospitals and Aravind Eye Hospitals. Key players in healthcare industry

Company

No. Of beds

Presence

Chennai, Madurai, Hyderabad, Karur, Apollo Hospitals Enterprise Ltd 8,500 Karim Nagar, Mysore, Visakhapatnam, Bilaspur, Aragonda, Kakindada, Bengaluru, Delhi, Noida, Kolkata, Ahmedabad, Mauritius, Pune, Raichur, Ranipet, Ranchi, Ludhiana, Indore, Bhubaneswar, Dhaka Aarvind Eye Hospitals Theni, Tirunelveli, Coimbatore, Puducherry, Madurai, Amethi, Kolkata Hyderabad, Vijaywada, Nagpur, Rajpur, 1,400 Bhubaneshwar, Surat, Pune, Visakhapatnam Mumbai, Bengaluru, Kolkata, Mohali, 5,044 Noida, Delhi, Amristar, Rajpur, Jaipur, Chennai, Kota

3,649

CARE Hospitals

Fortis Healthcare Ltd Max Hospitals Manipal Group of Hospitals +7,000

800

Delhi and NCR

Udupi, Bengaluru, Manipal, Attavar, Mangalore, Goa, Tumkur, Vijaywada, Kasaragod, Visakhapatnam

Source: E&Y, November 2010

Challenges and Opportunities Owing to the fact that the healthcare sector is one of the largest service sector industries in India with an estimated revenue of US$ 35 billion, the industry has also emerged as on the of most challenging sectors as well.

India would require another 1.75 million beds by the end of 2025 to reach a ratio of two beds per 1000 population. An additional 0.7 million doctors are needed to reach a doctor population ratio of 1:1000 by 2025. Although the health insurance sector is projected to grow to US$3.8 billion, the health insurance penetration rate still has a lot more scope to grow with only 2 per cent of the total population being insured at present. The government recognised the significant challenges and potential in the sector and provided priority status to healthcare in the Eleventh Five Year Plan. Further, the sector is expected to witness added growth through a well-defined partnership between the government and the private sector. Meanwhile, the total healthcare infrastructure expenditure is expected to reach US$ 14.2 billion in 2013, registering an increase of 50 per cent as compared to the 2006 figure, according to a report by KPMG. Average annual growth rate forecast in healthcare infrastructure expenditure 2009-2013

Source: Global Infrastructure: Trend Monitor Indian Healthcare Edition: Outlook 20092013, KPMG
Investments

The sector is undergoing significant changes driven by the continuing phase of rapid economic growth, with emerging markets, such as medical device manufacturers and diagnostic chains attracting increasing amounts of investments. Cumulative FDI inflow (April 2000 to February 2011)

Sector Hospital and diagnostic centres Medical and surgical appliances Drugs and pharmaceuticals

FDI inflow (US$ million) 998.11 387.52 1,882.30

Source: Department of Industrial Policy & Promotion (DIPP)

Major Investments

Hospitals chain Apollo Hospitals Enterprise Ltd plans to invest around US$ 204.04 million- US$ 226.70 million over the next two years. Wockhardt Hospitals plans to invest up to US$ 158.32 million to double its bed capacity to 2,000 by 2013. Hospitals chain Fortis Healthcare plans to invest US$ 146.81 million and add 2,100 new beds. The BCG Group plans to build a multidisciplinary health facility, BCG Healthsquare in Palarivattam in Kochi, Kerala, by August 2011. The companys long-term plan is to set a 750,000 sq ft health village with an estimated cost of US$ 88.91 million.

GE Healthcare will invest US$ 50 million to set up more facilities for developing diagnostic services. Manipal Hospitals plans to invest US$ 45.23 million in the next three years to double its capacity to 8,000 beds. PPP Model Private healthcare is emerging as one of the fasting growing sectors in India, with hospital chains exploring the markets in metros and tier II cities, private players seeking accreditation and developing new healthcare models. Further, the private and public sectors across various states such as Gujarat and Uttarakhand have launched innovative initiatives to attract PPP investments into healthcare. While the government is exploring potential to establish state-funded healthcare insurance schemes for supporting healthcare delivery for the poorer sections of the population, the corporate segment is catering to the growing need of the general public for quality care. Thus, through a sustainable partnership,

development and delivery of low cost, affordable, basic healthcare services, PPP models may help in improving the infrastructure and healthcare provision in the country. Key Developments

Rural healthcare sector in the country is also witnessing an upsurge. The rural health sector has added around 15,000 health sub-centres and 28,000 nurses and midwives during the last five years, according to the Rural Health Survey Report 2009, released by the Ministry of Health. The number of primary health centres has increased by 84 per cent, taking the number to 20,107, according to the report.

Indian health insurance market represents one the fastest growing and second largest non-life insurance segment in the country, according to a report by research firm RNCOS. The health insurance premium is expected to grow at a Compound Annual Growth rate (CAGR) of over 25 per cent for the period spanning from 2009-10 to 2013-14, according to the report.

Indias share in the global medical tourism industry is predicted to be around 3 per cent by the end of 2013, according to a report Booming Medical Tourism in India by research firm RNCOS, released in December 2010. The sector is expected to generate around US$ 3 billion in revenues by 2013, with the number of medical tourists to grow at a CAGR of over 19 per cent during 2011-2013 to reach 1.3 million by 2013.

Indian medical technology industry is expected to reach US$ 14 billion by 2020 from US$ 2.7 billion in 2008, according to a report by PwC and an industry body. The countrys first healthcare Special Economic Zone (SEZ), Frontier Mediville, is being set up by Frontier Lifeline Hospital at Elavoor, near Chennai. Major healthcare players such as Fortis and Apollo are expanding to tier-II and tier-III cities, along with urban cities, due to substantial demand for high-quality and specialty healthcare services in these cities. Healthcare majors such as Apollo, Max Healthcare and Manipal Group are targeting new segments such as primary care and diagnostics. Demographics, health awareness and increasing capacity to spend are the key drivers of the preventive healthcare segment in India.

Computer-based bio-surveillance projects generating data about diseases and creating databases on healthcare in rural areas are gaining popularity in India with various organisations such as Narayana Hrudayalaya and the Mazumdar Shaw Cancer Centre entering into this sector. Government Policies

Government initiatives in the public health sector have recorded some noteworthy successes over time with focus on investments related to better medical infrastructure, rural health facilities etc. 100 per cent FDI is permitted for health and medical services under the automatic route. The National Rural Health Mission (NHRM) had allocated US$ 10.15 billion for the upgradation and capacity enhancement of healthcare facilities. Moreover, in order to meet revised cost of construction, in March 2010 the Government allocated an additional US$ 1.23 billion for six upcoming AIIMS-like institutes and upgradation of 13 existing Government Medical Colleges.

Healthcare in India
Feb 27, 2012

The Indian healthcare sector, currently at US$ 65 billion, is expected to reach US$ 100 billion by 2015, growing at around 20 per cent a year, according to rating agency Fitch. Some of the major factors driving the growth in the sector include increasing population, growing lifestyle related health issues, cheaper costs for treatment, thrust in medical tourism, improving health insurance penetration, increasing disposable income, government initiatives and focus on Public Private Partnership (PPP) models.

SECTOR FACTS

FDI inflow in hospital and diagnostic centres was US$ 1.1 billion during April 2000 and November 2011, according to the latest Department of Industrial Policy & Promotion (DIPP) data FDI inflow in medical and surgical appliances stood at US$ 472.6 million during the same period, according to the latest DIPP data The drugs and pharmaceuticals sector has attracted FDI worth US$ 5.0 billion between April 2000 and November 2011

Investment Opportunities
According to a survey conducted by consulting firm, Grant Thornton, India is expected to witness the largest number of merger and acquisitions (M&As) in the pharmaceutical and healthcare sector in 2012. The survey that was being conducted across 100 companies stated that fourth of the respondents were bullish on acquiring companies in the pharmaceutical space. "The expectations of M&A activity in the pharma and healthcare sector could be explained by factors such as the impending patent cliff in the US, the increasing attractiveness of India as a low-cost R&D destination and the increasing success of Indian firms in getting ANDA approvals," said Sunil Makharia executive VP (finance) Lupin Pharmaceuticals. Patent cliff refers to expiry of legal protection to top-selling drugs. According to a report by PriceWaterhouseCoopers, an estimated 189 million people in the country will be more than 60 years of age by 2025, needing higher healthcare spends. A combined study by an industry body and Ernst & Young suggests that India will need as many as 1.75 million additional beds by the end of 2025. Further, an investment of US$ 86 billion is required to achieve 1 doctor, 2 beds and 2.3 nurses per 1000 population by 2025. Medical tourism in India has also received a boost with arrival of patients from countries with advanced medical systems. This underlines the fact that India has good infrastructure and talent. According to a new report published by RNCOS, titled "Booming Medical Tourism in India" Indias share in the global medical tourism industry will reach around 3 per cent by the end of 2013. The report states that medical tourism is expected to generate revenue around US$ 3 billion by 2013, growing at a CAGR of

around 26 per cent during 20112013. The number of medical tourists is anticipated to grow at a CAGR of over 19 per cent during the forecast period to reach 1.3 million by 2013. Hospital trade is a growing business opportunity for other sectors such as food retail as some large hospitals are getting almost 1,000-1,500 outpatients per day and visitors for inpatients who are also potential customers. Food retail has about 15 per cent of its business coming from hospitals. Au Bon Pain has one outlet at Cradle, a maternity hospital in Bengaluru, and is likely to set up four more in one year through this format. The US-based bakery chain is now looking at West Asia and India as potential growth markets for this format. The rural healthcare sector is also witnessing considerable growth, with the sector adding around 15,000 health sub-centres and employing 28,000 nurses and midwives during the last five years, as per the Rural Health Survey Report 2009 of the Ministry of Health. As per the report, the primary health centres in the country has reached 20,107, growing by 84 per cent. The Indian health insurance market is also on an upsurge providing lucrative growth avenue for both the existing players as well as the new entrants. According to the RNCOS report, the health insurance market is one the fastest growing and second largest non-life insurance segment in the country. Posting tremendous growth in the last two fiscals, the health insurance premium is expected to grow at a CAGR of over 25 per cent for the period spanning from 2009-10 to 2013-14. The Andhra Pradesh government has successfully implemented the US$ 59.68 million Health Management Project funded by the Department for International Development (DFID) of the UK. Other states as well are considering implementing similar models. With 3G there are possibilities of remote treatment and diagnosis of patients through mobile phones. Also, with the number of cellphone users currently at 600 million and rapidly increasing by 20 million every month, some telecom operators and value-added service developers such as Nokia and BlackBerry are considering usage of mobile phones for diagnostic and treatment support, remote disease monitoring, health awareness and communication. As per the report, "Healthcare Information Technology Market in India" released by Frost & Sullivan electronic medical record (EMR) services have a high growth potential at an estimated compound annual growth rate (CAGR) of 13.5 per cent from 2009 to 2016. With many new private hospitals opening in the next few years, investment in EMR is expected to become a necessity for these hospitals.

Investment Policy Updates

Government initiatives in the public health sector have recorded some noteworthy successes over time with focus on investments related to better medical infrastructure, rural health facilities etc.

100 per cent FDI is permitted for health and medical services under the automatic route. The National Rural Health Mission (NHRM) had allocated US$ 10.15 billion for the upgradation and capacity enhancement of healthcare facilities.

Moreover, in order to meet revised cost of construction, in March 2010 the Government allocated an additional US$ 1.23 billion for six upcoming AIIMS-like institutes and upgradation of 13 existing Government Medical Colleges