Technology will play pivotal role in addressing gaps in healthcare sector: Report

Digital healthcare expected to grow exponentially from US$2.7 billion to ~$37 billion by 2030

The digital transformation of India’s digital healthcare industry could grow ten times from US$2.7 billion in 2022 to ~US$37 billion by 2030, according to forecasts by Boston Consulting Group (BCG) and B Capital. Captured in the report ‘A Digital Pill for Revolutionising Healthcare’, this growth is fueled by rapid digitisation, an increasing number of innovative healthtech platforms and partnerships created by start-ups and incumbents, and the favorable funding environment for solid business models and progressive initiatives by the government.

The study, based on data and research gathered by BCG in partnership with B Capital, shows that India’s healthcare industry is expected to grow from US$167 billion in 2022 to US$458 billion in 2030. A key barometer to measure development and growth in economies has been the move towards higher spending per gross domestic product (GDP) on healthcare. In the context of India, this trend has been moving upward in recent years but still lags behind other large economies.

The study highlights the unique structural complexities across India’s healthcare industry and presents the emerging themes that will shape the future of India’s digital healthcare landscape. These include:

• Broader adoption of digital healthcare post-COVID-19.
• Rising insurance penetration and Outpatient Department (OPD) coverage to drive greater adoption of OPD services.
• The existence of sizable value pools across Inpatient Departments (IPD) and OPD  are growing fast and  being disrupted by healthtech.
• Robust funding environment and the emergence of new models across various healthcare sectors.
• Healthtech players are expanding horizontally across the value chain and driving vertical integration to gather scale and drive better unit economics.
• Greater collaboration between incumbents and digital natives to better serve emerging customer needs efficiently.
• Emergence and growing popularity of new asset-light providers.
• Incumbents ramping up digital capabilities to capture growth and the counter threat from digital natives.
• The creation of healthcare ecosystems through innovative partnerships and consolidation across the value chain.
• Emergence of new digital healthcare models customised for the Indian environment.

“Indian healthcare is at a unique moment in its evolution. COVID has put the importance of healthcare right on top of the attention of citizens and government alike. COVID has also created an irreversible change in how healthcare is consumed, where now both patients and doctors are comfortable leveraging technology for healthcare interactions. At the same time, there is an ecosystem of innovation developing which can be described as ‘thousand flowers blooming’, some of these models have also gathered substantial scale. The government has firmly declared its intent to leverage technology to define the next phase of the health system in India by investing in the end2end health stack through the Ayushman Bharat Digital Mission. All these developments open up a sure change in trajectory in the development of digital health and a great opportunity to solve the erstwhile intractable challenges in Indian healthcare of access and affordability. In this report, we set out to define the opportunity, outline some key trends, and lay out the contours of how we see these models developing. We look forward with excitement and optimism to the opportunities that lie ahead,” said Priyanka Aggarwal, Managing Director & Senior Partner (New Delhi), Boston Consulting Group.

Karan Mohla, General Partner, B Capital who leads the firm’s early-stage investments in India and South-East Asia said, “Technology is the answer to addressing gaps in India’s physical care infrastructure. By developing and scaling innovative treatment models and enhancing financial access through insurance, digital healthcare emerges as the linchpin for the sector’s growth. With digital health-driven solutions, we can extend essential services to hundreds of millions.”