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| Charu Sehgal |
The healthcare sector in India is currently at a cusp – while, the industry is poised to grow at an estimated annual rate of 19 per cent to reach $280 billion by 2020 with India being recognised as a destination for world class healthcare, it is also facing an unprecedented pressure due to the poor reach of quality healthcare to millions of India’s citizens caused by issues of access and affordability. However, adversity is often also an opportunity. This predicament has caught the imagination of committed individuals and institutions in both the private sector as well as the government to look for solutions which ensure that the benefits of world class capabilities reach more than just the top 10 per cent of the population. The government is tackling this issue through several policies and tactical initiatives including increasing its budgetary spend on healthcare from the current around one per cent of GDP, designing and implementing models of healthcare financing including social insurance (like the Rashtriya Swasthya BimaYojna), and partnering with the private sector to best leverage its strengths to achieve its objective of ‘health for all’. In parallel, an ecosystem of innovations for world-class healthcare delivery, driven by private providers, is developing. India is establishing new global standards for cost, quality and delivery, through its breakthrough innovations in healthcare. The last couple of years have seen a rapid increase of private equity and venture capital funds available for entrepreneurs in healthcare, which has enabled scale-up of some new interesting models for providing healthcare.
There are countless new developments cropping up regularly, but certain strategies, systems and trends are set to reach a tipping point of adoption and popularity in the coming years. Some of the emerging trends in this sector will have widespread effects and the potential to change the landscape significantly.
Use of technology in healthcare
Technology is rapidly changing the way healthcare is delivered across the country. It is making healthcare more pervasive and has integrated it more seamlessly into our everyday life. Technology, for instance in diagnostics, genomics and invasive procedures, has revolutionised clinical practice. While product innovations have been exponential in the last decade, and are only going to grow, process innovations through technologies in healthcare are a recent emerging trend – making management of healthcare more efficient, cost effective and accessible. Innovations in delivering what services are available, and delivering them better is going to be the defining shift in the coming years.
Increasing access to reach the unreached, while controlling costs, is made possible through the induction of technology in healthcare. Telemedicine is being used to connect remote rural populations to medical advice from specialists, which were until now, unavailable to them. Besides this, telemedicine technology also allows physicians easier access to their colleagues in multiple locations across health facilities, thus offering the possibility of creating a network of health service providers.
Another area where technology will be used increasingly is in healthcare and hospital management to improve efficiency. Technology is offering comprehensive clinical and financial solutions that enable better decisions and outcomes for both businesses and patients, improve revenue cycle, drive quality outcomes and accelerate image management and workflow.
Increasing use of technology is also resulting in evolution of interactive patient care by educating and empowering patients to be active participants in their care management. Models such as interactive technology platform, online patient self-help groups, increased involvement of patients in care pathways – right from before admission to post discharge, mobile health, social media platforms and patient remote monitoring, among others will be used increasingly in the future. These models play a dual role – provide patients with a multitude of benefits including convenience and choosing a healthcare delivery model/ provider based on informed access; and help healthcare providers increase service levels, at the same time reduce costs owing to higher efficiencies.
Innovative healthcare delivery models
Given the increasing competitive intensity, rising real estate costs and a tough operating environment, a large number of healthcare providers are exploring new and innovative business models to tap larger number of patient segments, lesser penetrated geographies, and enhance service offering levels. Various unconventional formats are being tried out by some of the new entrants which have also increased the willingness of existing players to experiment with new models.
The need for efficiency in healthcare delivery has led to the emergence of organised and professionally managed primary care setups. A large number of providers are setting up chains of multispeciality outpatient clinics across India. Investments in primary care not only contribute to prevention of complications in chronic diseases, but also reduce secondary and tertiary overcrowding by managing simpler health problems at the primary level, thereby allowing them to focus on high-end treatments and in turn improve processes and cost efficiencies. This focus on primary care will continue to attract players in the coming years.
To increase their profitability and consumer-base, healthcare providers are moving beyond the saturated metropolitan centres by expanding geographical reach and tapping lesser penetrated population segments. This trend will continue. Additionally, healthcare providers are increasingly exploring asset light models by entering into hospital operations and management (O&M) contracts or by setting up ‘no-frills’ facilities with basic infrastructure making the setup less capital intensive. These models help providers widen healthcare access while leveraging their operational expertise and focussing on cost efficiency.
Shifting disease burden -focus on prevention and wellness
The coming decade is going to mark rising demands on costs of healthcare provision, changing demographics with an increasing aging population, and an epidemiological transition towards non-communicable diseases. By 2020, an estimated 97 million Indians will be aged 60 or older, up from about 64 million in 2010. This will pose significant demands on the healthcare system for geriatric services and associated chronic disease management. India is now faced with a huge challenge of non communicable diseases (NCDs). According to the International Diabetes Federation (IDF), India is expected to be the diabetes capital of the world, with the number of diabetes cases expected to increase from nearly 60 million in 2011 to 100 million by 2030. India’s share of NCDs is expected to increase to 76 per cent by 2030 and 50 per cent of total healthcare expenditure is expected to be contributed by NCDs.
Given these transitions, there is an emerging focus on wellness and prevention of illness rather than only cure. For the government; it has the potential of significantly reducing healthcare costs and having a healthier, more productive population. Investment in preventive care by insurers is cost-effective and yields high returns by preventing critical illness episodes among the insured population, and thereby, reducing payouts. With greater awareness among consumers and patients, health seeking behaviour has increased and there is willingness and acceptance of healthcare directed towards preventing illness and promoting good health. The coming years will see a shift from focussed curative care to preventive care, encompassing awareness creation of risk factors and disease symptoms, benefits of healthy living, adoption of preventive regular health check-ups, and better nutrition.
Moving beyond clinical expertise
Rising costs, expanding demand, and increasing customer expectations characterise healthcare today and are redefining the roles of patients, providers and payers. This is especially true as health facilities across the chain (primary, secondary, tertiary) are increasingly being run by corporates and funded through private equity – which demands better management practices and accountability mechanisms. The need for efficiently managed health systems, while containing costs and increasing access and profitability, has brought about a shift in focus from just medical expertise to principles of business and management. Apart from clinical specialisation, corporate hospitals are focusing on internal business functions such as inventory, asset, financial and human resource management, as well sales and marketing and customer relationship management (CRM). This trend will continue and create a demand for a specialised resource base.
The striking feature of the healthcare sector is its potential to grow at an exponential rate in the foreseeable future and present new opportunities within related industries, which will emerge as growth drivers. There is immense potential for each stakeholder (e.g. government, entrepreneurs, healthcare service providers, pharmaceutical companies, medical equipment manufacturers) to invest in and grow with the sector. However, given the complex and interdependent nature of the sector there is a need for a cohesive and collaborative approach, where all stakeholders effectively work synergistically and leverage the opportunities to create a lasting impact.
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