The 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.
- In the last five years, the number of patients visiting India for medical treatment has risen from 10,000 to about 100,000. According to Apollo group chairman Pratap Reddy, one out of every ten patients treated at his hospitals is from abroad.
- With an annual growth rate of 30 percent, India is already inching closer to Singapore, an established Medicare hub that attracts 150,000 medical tourists a year.
- Hospitals in India boast of conducting the latest surgeries at a very low cost.
|Comparative Price List|
|Surgery||US ($)||India ($)|
|Bone Marrow Transplant||400,000||30,000|
|Open Heart Surgery (CABG)||50,000||4,400|
|Source: Internet Research|
The healthcare industry employs over four million people, which makes 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, healthcare tourism alone can rake in over $2 billion as additional revenue 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 ($14.8 billion) to Rs 1,560 billion ($33.6 billion) in 2012. This figure could rise by an additional Rs 390 billion ($8.4 billion) if health insurance cover is available to the rich and the middle class.
- Voluntary health insurance market is estimated at Rs 4 billion ($86.3 million) currently but is growing fast. Industry estimates put the figure at Rs 130 billion ($2.8 billion) by 2005.
- With the expected increase in the pharmaceutical market, the total healthcare market could rise from Rs 1,030 billion ($22.2 billion) currently (5.2 percent of GDP) to Rs 2,320 billion ($50 billion)-Rs 3,200 billion ($69 billion) (6.2-8.5 percent of GDP) by 2012.
According to Nasscom, by year 2005, Indian healthcare companies will be able to grab business worth $800 million from the US alone.
Last year, the finance minister announced a list of incentives for private hospitals to create and upgrade infrastructure, as well as reduce their operational costs:
- Tax sops to financial institutions lending to private groups setting up hospitals with 100 or more beds.
- Increase in the rate of depreciation from 25 percent to 40 percent for life-saving medical equipment.
Now, state governments, private hospital groups and even travel agencies have joined the fray.
- Leading travel houses like Sita and Kuoni have tied up with overseas players that focus on medical tourism.
- The Karnataka government is setting up Bangalore International Health City Corporation, which will cater to international patients for a wide variety of health care products and treatments.
- The Asian Heart Institute at Mumbai’s Bandra-Kurla Complex, offers state-of-the art facilities for all types of heart complications. It has been set up in collaboration with the Cleveland Institute, US, and offers quality service at a reasonable cost.
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 percent.
- India’s success in 110 bone marrow transplants is 80 percent.
- The success rate in 6,000 renal transplants is 95 percent.
- India’s independent credit rating agency CRISIL has assigned a grade A rating to super specialty hospitals like Escorts and multi specialty 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 now seeking certification from the US-based Joint Commission on Accreditation of Healthcare Organisations.