The economic outlook for India is positive. A growth rate of above 8% was achieved by the Indian economy in the last 4 years, with current growth rate of 9%. Industrial Growth has touched 14%. Growth in the Indian economy has steadily increased since 1992. Many factors are behind this robust performance of the Indian economy in the last few years. High growth rates in industry & service sector and a benign world economic environment provided a backdrop conducive to growth of the Indian economy. Another positive feature is that prices have been relatively stable.

The healthcare industry in India has come a long way from the days when those who could afford it had to travel abroad. Today patients from neighboring countries, Middle East, UK and now even USA are flocking to India for specialized treatment.

In India healthcare is delivered through both the public sector and private sector. The public healthcare system consists of healthcare facilities run by central and state government which provide services free of cost or at a subsidized rates to low income group in rural and urban areas. With the Indian economy enjoying a steady growth, the industry is heading towards growth phase. The prevailing mood of economic confidence is likely to be reflected in the Indian healthcare industry. The introduction of product patents in India in 2005 is expected to boost the industry by encouraging multinational companies to launch specialized life-saving drugs. As a result of the new drug regime, large number of clinical research companies are setting up businesses in India. Attracted by the advantages such as lower costs of production and skilled workforce that India offers, these companies are looking to set up research and development as well as production centers here.

Customs tariffs have come down on most medical equipment, durgs, reagents, supplies and some life saving medicines and equipments can now be imported duty free.

Post 1992, the healthcare industry emerges with greater opportunities and quality changes.

The Indian healthcare sector has been growing at a frenetic pace in the past few years. The windfall began ever since the developed world discovered that it could get quality service for less than half the price.

The sector is expected to post the highest year-on-year growth in earnings in the fiscal year to March 31, 2007, says Reuters. It is set to post a 42 per cent rise in earnings in the year to March 2007. These figures are driven by availability of quality healthcare and the huge rise in numbers visiting India for treatment.

The number of patients visiting India for medical treatment has risen from 10,000 in 2000 to about 100,000 in 2005. With an annual growth rate of 30 per cent, India is already inching closer to Singapore, an established medicare hub that attracts 150,000 medical tourists a year.

The healthcare industry employs over four million people, making it one of the largest service sectors in the economy. A joint study by the Confederation of Indian Industry and McKinsey shows:

• At the current pace of growth, medical tourism, currently pegged at US$ 350 million, has the potential to grow into a US$ 2 billion industry by 2012.
• Healthcare spending in the country will double over the next 10 years. Private healthcare will form a large chunk of this spending, rising from Rs 690 billion (US$ 14.8 billion) to Rs 1,560 billion (US$ 33.6 billion) in 2012. This figure could rise by an additional Rs 390 billion (US$ 8.4 billion) if health insurance cover is available to the rich and the middle class.
• The voluntary health insurance market, which is estimated at Rs 4 billion (US$ 86.3 million) currently, is growing fast. Industry estimates put the figure at Rs 130 billion (US$ 2.8 billion) by 2005.
• With the expected increase in the pharmaceutical market, the total healthcare market could rise from Rs 1,030 billion (US$ 22.2 billion) currently (5.2 per cent of GDP) to Rs 2,320 billion (US$ 50 billion)-Rs 3,200 billion (US$ 69 billion) (6.2-8.5 per cent of GDP) by 2012.

However, it is not only the cost advantage that keeps the sector ticking. It has a high success rate and a growing credibility.

• Indian specialists have performed over 500,000 major surgeries and over a million other surgical procedures including cardio-thoracic, neurological and cancer surgeries, with success rates at par with international standards.
• The success rate in the 43,000 cardiac surgeries till 2002 was 98.5 per cent
• The success rate in 6,000 renal transplants is 95 per cent.

• India's independent credit rating agency CRISIL has assigned a grade A rating to super speciality hospitals like Escorts and multi speciality hospitals like Apollo.
• NHS of the UK has indicated that India is a favoured destination for surgeries.
• The British Standards Institute has now accredited the Delhi-based Escorts Hospital.
• Apollo Group — India's largest private hospital chain and Escorts Hospital are certified by US-based Joint Commission on Accreditation of Healthcare Organisations

Indian healthcare is all set to go global with number of Indian hospital chains like Apollo, Fortis, Max are planning overseas expansion programs. Apollo has already established its presence in the South Asian region, and are looking to acquire hospitals in UK as well.

The Indian healthcare sector has been growing at a frenetic pace in the past few years. The windfall began ever since the developed world discovered that it could get quality service for less than half the price.

The sector is expected to post the highest year-on-year growth in earnings in the fiscal year to March 31, 2007, says Reuters. It is set to post a 42 per cent rise in earnings in the year to March 2007. These figures are driven by availability of quality healthcare and the huge rise in numbers visiting India for treatment.

The number of patients visiting India for medical treatment has risen from 10,000 in 2000 to about 100,000 in 2005. With an annual growth rate of 30 per cent, India is already inching closer to Singapore, an established medicare hub that attracts 150,000 medical tourists a year.

• Spur foreign / private investment in healthcare.
• Define and enforce minimum quality standards for healthcare facilities.
• Facilitate adequate supply of quality manpower.
• Stimulate the growth of private, social and community insurance.
• Reform the government’s own role as payor and provider.

India’s healthcare industry is worth $23 billion today or roughly 4% of GDP. The healthcare industry is expected to grow by around 15% per year for the next four years. The government funds allocated to healthcare sector have always been low in relation to the population of the country. In the private sector healthcare industry, healthcare facilities are run for profit by companies. Healthcare facilities run by charitable organizations also provide services at very low costs depending on the income of the patient or patient’s family. The pharma market turnover was over $ 9 billion for year 2005-2006 and the exports were $ 3.5 billion. The pharma sector is growing at an annual rate of 10%.

Looking at Indian healthcare market in a Pan India perspective more than half million doctors are employed in 15097 hospitals. Additionally there are 0.75 million nurses who look after more than 870,000 hospital beds.

Market Trends

Over the last five decades India has built up a vast health infrastructure and manpower at primary, secondary and tertiary care in government, voluntary and private sectors. Currently private sector health services range from those provided by large corporate hospitals, smaller hospitals and nursing homes and clinics run by qualified personnel.

A majority of the private sector hospitals are small establishments with 85% of them having less than 25 beds. Private tertiary care institutions providing speciality and super speciality care account for only 1 to 2% of the total number of institutions while corporate hospitals constitute less than 1%. The private sector accounts for 82% of all out patient visits and 52% of hospitalization at all India level.

Of late India is becoming a preferred healthcare destination for neighboring countries and the West due to low cost and high quality of treatment available giving rise to the term medical tourism. This has had a cascading effect with more and more hospitals in the private sector upgrading their facilities to land a slice of this business.

Medical insurance which was non existent earlier has now opened up. More and more of the Indian population is taking up insurance which results in increased spending on healthcare.

The National Accreditation Board for Hospitals and Healthcare Providers (NABH) set up by the Ministry of Health under the aegis of the Quality Council of India has finalized the guidelines for accreditation of hospitals and other healthcare service providers.

National Accreditation Board for Testing & Calibration Laboratories offers the accreditation services for the clinical laboratories. Number of clinical laboratories are also going for College of American Pathologists (CAP) Accreditation.

India has highest number of GMP compliant pharmaceutical units, outside US.

Government of India has accorded a high priority to the healthcare sector by an increased budgetary outlay and heavily slashed customs duty on imports of medical equipments. Also there are special incentives being provided for setting up new hospitals. There is a vibrant private sector, actively involved in the development of the healthcare sector. These initiatives are giving fillip to various market opportunities in the segments detailed below.

• Clinical Research
• Pharmaceuticals & Food Supplements
• Biotechnology
• Tertiary & Secondary Care Facilities
• Clinical Laboratories
• Imaging Diagnostic Centres
• Pharmacy Chains
• Telemedicine
• Mobile and Home Care
• Biotechnology
• Training & Education Opportunities
• Knowledge & Business Process Outsourcing (Medical Writing, Pharmacovigilance, Insurance, Healthcare Processes and other areas)
• Healthcare Information Technology
• Medical Tourism
• Medical Equipment/Instrumentation/Consumables
• Specialized Consulting Services
• Hospital Administration & Management
• Healthcare Placement Services
• Quality Accreditations/Certifications
• Specialized Marketing & Promotions
• Medical Publications/Medical Writing