Archana.

M (12010)
Jaishankar.K (12036)
Demand Estimation for
Medical Device and Equipment
About Medical Device and Equipment
Currently valued at $4.4 billion
Expected to grow to around $5.8 billion by 2014 and $
7.8billion by 2016
Medical Equipment Industry
Medical
Instruments
27.01%
Orthopaedic
Goods - 20%
X-ray
apparatus
12.10%
Electromedical
13.20%
Syringes and
needles
12.4%
Bandages
and
others
Factors affecting the demand
Demographic factors
Macro-economic factors
Regulatory factors
Demographic factors
Factor Theory Source
Ageing population Replacement Level Fertility (RLF)
Global average = 2.1

Life expectancy (LE) theory
India LE grew up by 4.6 years

Management Institute of
Population and Development

Human Development
Index Report 2011
Change in disease
profile
Increase of non-communicable
diseases (NCD) diabetes,
cancer, cardiovascular diseases

World Health Organization
Rising purchasing
power/per capita
Disposable Income
People can afford to better
quality of healthcare services.
CAGR - 5.7%
IMF, World Bank data
Macro-economic factors
Factor Theory Source
% of GDP on Healthcare India spends around 4.1% of
GDP and most of it is from
Private Expenditure
Economic Survey
Socio economic inclusion of
rural and deprived
Urban market is saturated
Rural constitutes close to 3/4
th

of the population
Government expenditure on
health
It increases year-on-year but it is
far less than Private sector
Economic outlook
Increased Health Insurance Private and State-run insurance
schemes with increasing medical
coverage. Increase to 20% by
2015
IRDA ( Insurance Regulatory and
Development Authority)
Technological advancement and
innovation in medical field
Innovative machines with
comparatively lower cost
-
Regulatory factors
Factor Theory Source
Foreign Investments FDI in healthcare sector

Medical Tourism Presence of skilled medical
professionals and
affordable cost of
treatments. The CAGR
expected is 27% in 2014
and we have 85 million in
2012.
Ministry of Health
Demand Estimation
Independent Variables
Medical & public health Central Plan Outlay
(Data Source : Economic Outlook)
GDP of Medical Services
(Data Source : Economic Outlook)
Improved Sanitation Facilities
(Data Source : World Bank Data)
Ageing Population
(Data Source : World Bank Data)
Life expectancy
(Data Source : World Bank Data)
Health Expenditure Per Capita
(Data Source : World Bank Data)
Dependant Variable
Medical Equipment Sales
Regression Equation
Med. Equip Demand = 10,43,375.115+
0.1476*Med. Health Central Plan Outlay+
0.1457*GDP of Medical Services+
1,378.65*Improved Sanitation Facilities+
-6.74*Health Expenditure Per Capita+
-11,212 *Ageing Population+
-15,250*Life Expectancy at Birth
DATA
Year
Med. Equip.
Sales
Value(Rs.
Million )
Med. Health
Central Plan
Outlay(Rs.
Million)
GDP of Medical
Services (Rs.
Million)
Improved
Sanitation
Facilities (Rs.
Million)
Health
Expenditure
Per Capita
(Rs.)
Ageing
Population
(Million)
Life
Expectancy at
Birth (years)
1991 719 2,551 171,450 158 225.92 34.48 58.82
1992 959 2,816 174,610 169 342.39 35.44 59.14
1993 772 4,492 185,810 180 438.89 36.42 59.47
1994 1,052 5,056 198,770 191 464.84 37.45 59.82
1995 1,151 5,990 211,210 203 494.08 38.53 60.19
1996 1,429 6,482 228,520 215 530.45 39.67 60.57
1997 1,664 8,176 249,420 227 651.55 40.87 60.97
1998 1,654 9,162 270,490 240 684.17 42.13 61.37
1999 2,602 9,798 293,170 252 766.84 43.44 61.77
2000 4,769 10,768 335,850 266 848.00 44.81 62.16
2001 4,461 12,769 373,350 279 955.90 46.23 62.56
2002 5,232 12,962 400,350 293 1,004.28 47.71 62.95
2003 5,615 13,699 432,830 307 1,144.86 49.23 63.34
2004 8,328 14,116 481,700 322 1,318.87 50.78 63.72
2005 14,682 21,738 535,460 337 1,402.64 52.35 64.10
2006 16,497 25,482 574,840 351 1,460.49 53.91 64.46
2007 22,729 28,843 588,720 366 1,646.91 55.48 64.79
2008 18,525 33,315 615,370 382 1,854.09 57.07 65.11
2009 18,758 49,884 631,290 398 2,107.63 58.68 65.41
2010 22,238 53,499 670,430 412 2,349.03 60.28 65.69
2011 29,479 71,151 697,480 429 2,758.32 61.89 65.96
CORRELATION

Med.
Equip.
Sales
Value(Rs
. Million
)
Med. Health
Central Plan
Outlay(Rs.
Million)
GDP of
Medical
Services (Rs.
Million)
Improved
Sanitation
Facilities (Rs.
Million)
Health
Expenditure
Per Capita
(Rs.)
Ageing
Populatio
n(Million)
Life
Expectancy at
Birth (years)
Med. Equip. Sales
Value(Rs. Million ) 100.00%
Med. Health
Central Plan
Outlay(Rs.
Million) 93.51% 100.00%
GDP of Medical
Services (Rs.
Million) 94.95% 88.76% 100.00%
Improved
Sanitation
Facilities (Rs.
Million) 92.99% 89.11% 99.28% 100.00%
Health
Expenditure Per
Capita (Rs.) 95.88% 96.77% 96.85% 97.24% 100.00%
Ageing
Population(Millio
n) 93.57% 89.59% 99.48% 99.97% 97.50% 100.00%
Life Expectancy at
Birth (years) 90.33% 85.10% 98.66% 99.63% 94.97% 99.48% 100.00%
Regression Result Inferences
R-Square : 96.95%
Adjusted R-Square : 95.65%
F-Value : 74.37 Significant
T-Values*
Med. Health Outlay : 0.718 Insignificant
GDP of Med. Services : 2.799 Significant
Improved Sanitation : 1.614 Insignificant
Per Capita Health Expenditure : -0.645 Insignificant
Ageing Population : -1.546 Insignificant
Life Expectancy : -1.436 Insignificant
Med. Health Outlay, GDP of Med. Services, Improved Sanitation all
becomes SIGNIFICANT when rest of 3 variables are removed and Vice-
versa
Conclusion
Estimated Demand for 2012 : 28,015 Million
Regression output using
Medical & public health Central Plan Outlay
GDP of Medical Services
Improved Sanitation Facilities
Ageing Population
Life expectancy
Health Expenditure Per Capita
Demand Estimated for 2012 (In Rs. Million) 28,015
R-Square 96.96%
Adjusted R-Square 95.65%
Intercept 1,043,375
Med. Health Central Plan Outlay(Rs. Million) Insignificant
GDP of Medical Services (Rs. Million) Significant
Improved Sanitation Facilities (Rs. Million) Insignificant
Health Expenditure Per Capita (Rs.) Insignificant
Ageing Population(Million) Insignificant
Life Expectancy at Birth (years) Insignificant
Regression output using
Medical & public health Central Plan Outlay
GDP of Medical Services
Improved Sanitation Facilities
Health Expenditure Per Capita
Demand Estimated for 2012 (In Rs. Million) 28,087
R-Square 96.28%
Adjusted R-Square 95.35%
Intercept 6,716
Med. Health Central Plan Outlay(Rs. Million) Insignificant
GDP of Medical Services (Rs. Million) Significant
Improved Sanitation Facilities (Rs. Million) Significant
Health Expenditure Per Capita (Rs.) Insignificant
Regression output using
Medical & public health Central Plan Outlay
GDP of Medical Services
Improved Sanitation Facilities
Demand Estimated for 2012 (In Rs. Million) 28,169
R-Square 96.27%
Adjusted R-Square 95.61%
Intercept 7,524
Med. Health Central Plan Outlay(Rs. Million) Significant
GDP of Medical Services (Rs. Million) Significant
Improved Sanitation Facilities (Rs. Million) Significant
Regression output using
Ageing Population
Life expectancy
Health Expenditure Per Capita
Demand Estimated for 2012 (In Rs. Million) 26,752
R-Square 95.22%
Adjusted R-Square 94.37%
Intercept 702,268
Health Expenditure Per Capita (Rs.) Insignificant
Ageing Population(Million) Significant
Life Expectancy at Birth (years) Significant
SUMMARY OUTPUT - REGRESSION
Regression Statistics
Multiple R 0.98
R Square 0.97
Adjusted R Square 0.96
t-
critical 1.76
Standard Error 1,894.84
Observations 21.00
ANOVA
df SS MS F
Significance
F
Regression 6.00 1,602,101,902.20
267,016,983.7
0 74.37 0.00
Residual 14.00 50,265,633.00 3,590,402.36
Total 20.00 1,652,367,535.20
Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
Intercept 1,043,375.11 641,151.77 1.63 0.13 -331,758.66 2,418,508.89 -331,758.66 2,418,508.89
Med. Health Central Plan
Outlay(Rs. Million) 0.15 0.21 0.72 0.48 -0.29 0.59 -0.29 0.59
GDP of Medical Services (Rs.
Million) 0.15 0.05 2.80 0.01 0.03 0.26 0.03 0.26
Improved Sanitation Facilities (Rs.
Million) 1,378.65 853.97 1.61 0.13 -452.94 3,210.24 -452.94 3,210.24
Health Expenditure Per Capita
(Rs.) -6.74 10.46 -0.64 0.53 -29.17 15.69 -29.17 15.69
Ageing Population(Million) -11,212.61 7,254.10 -1.55 0.14 -26,771.11 4,345.89 -26,771.11 4,345.89
Life Expectancy at Birth (years) -15,250.39 10,616.90 -1.44 0.17 -38,021.38 7,520.61 -38,021.38 7,520.61
Thank You