India's healthcare industry to reach $139 billion by 2017

Keeping in mind the possibility of giving a ubiquitous healthcare system, the government has emphasised the need to enable healthcare system through digital technology Deepak Kumar | The Dollar Business

Presently, the government spends only 4.3% of its total expenditure on health which is 3.8% of GDP

Indian healthcare industry is likely to grow at 12% to reach $139 billion by 2017, and the country would need capital investment of Rs. 1.62 lakh crore to cater to the growing needs of its people, says a PwC report. “Health represents 12.4% of GDP in Organisation for Economic Cooperation and Development (OECD) countries. However in India, it is only 4%. Medicines constitute the highest share in consumer expenditure about 64% in public and 34% in private sector,” the report said. Presently, the government spends only 4.3% of its total expenditure on health which is 3.8% of GDP. Private sector investments contribute 69.5%, which consist of 87.2% as out of pocket expenditure (OOPE), while the government contributes the remaining 30.5%, which has 6.5% spending on social security. Nearly 70% of India’s healthcare infrastructure is restricted to the major 20 cities. Still, 30% Indians do not have access to primary healthcare facilities, while an equal percentage of people in rural India do not visit hospitals fearing expenses. Healthcare needs of 47% of rural India and 31% of urban India are financed by loans or sale of assets. The private sector could play a pivotal role in transforming the country’s healthcare system through expanding capacity of public facilities, improving information technology systems, leveraging private financing and harnessing its skills to improve human resource management. “The government increasingly is becoming a payer rather than a provider. It is gradually moving away from developing hospitals to diverting the funds to acquire insurance for the population. The patients will have the empowerment with the backup of the insurance to go and choose the best players. If this happens, the private players who are not very attracted towards the small towns will gradually find them more attractive,” Abhishek Singh, Director, PricewaterhouseCoopers Private Ltd. (PwCPL), India, told The Dollar Business. Keeping in mind the possibility of giving a ubiquitous healthcare system, the government has emphasised the need to enable healthcare through digital technology. With about 400 million people having internet access in India, digitisation will help the government indentify the outcomes and unmet needs in an effective and precise manner. The government has already announced the opening of 60,000 telemedicine centres across the country in partnership with Apollo Hospitals. It also liberalised the FDI policy in healthcare to attract more foreign players in the sector. “FDI has been going on for about 15-20 years. It has always helped to put equity and to get FDI from outside. It has played a key role to generate investments for the private sector. This will continue to grow,” Singh said.

January 11, 2016 | 05:00pm IST

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The Dollar Business Bureau - Jan 11, 2016 11:31 IST

India's healthcare industry to reach $139 billion by 2017

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