As health IT infrastructure advances and healthcare providers invest in tier 2 and 3 cities, these regions are set to become pivotal hubs for transformation, driving a more equitable and sustainable future for Indian healthcare
With the rapid urbanisation of India’s tier 2 and tier 3 cities, healthcare systems in these regions are at a crossroads. While tier 1 cities have made considerable advancements in healthcare infrastructure, tier 2 and tier 3 cities are now seeing a surge in demand for quality healthcare services. Central to this development is the adoption and strengthening of health IT infrastructure, which can bridge the existing healthcare gap and ensure equitable access to quality medical care.
Sharing his views, Mohit Sood, Regional Managing Principal, ZS stresses, “We have witnessed India come a long way in healthcare, moving from traditional home remedies to cutting-edge, tech-driven solutions. Industry reports show that data and AI in healthcare could add around $25-30 billion to India’s GDP by 2025. There’s been rapid growth y-o-y in the healthcare sector driven by rising demand for quality care and tech advancements. Right now, most digital health solutions are concentrated in urban areas and corporate hospitals, which limits affordability and access for people in remote regions. In rural areas, high costs, outdated equipment, and limited access to essential services make it tough to get quality care, especially since about 64.61 per cent of India’s population lives in these areas.”
Mudit Dandwate, CEO & Co-Founder, Dozee also shares, “Tier 2 and 3 cities play a crucial role in shaping the future of healthcare in India. These regions serve 67 per cent of the population, yet face significant challenges in healthcare accessibility, with a doctor-to-patient ratio of 1:25,000. The key to overcoming these challenges lies in leveraging technology—much like how India successfully administered over a billion COVID-19 vaccine doses through the COWIN platform during the pandemic.”
Current landscape of health IT in tier 2 and tier 3 cities
With rise in country’s tier 2 and tier 3 cities, the demand for high quality health services has spiked, highlighting the critical need for modern infrastructure which is accessible, efficient and affordable.
Dr Sanjeev Singh, Medical Director, Amrita Hospital, Faridabad emphasises, “The current landscape of health IT in India’s tier 2 and tier 3 cities is evolving but remains fragmented. While urban centers have established advanced healthcare systems with integrated digital solutions, smaller cities often lack basic IT infrastructure. Many healthcare providers still rely on manual record-keeping and face challenges in data management. However, there is a growing awareness of the need for digital solutions, leading to the gradual adoption of electronic health records (EHRs), telemedicine platforms, and mobile health applications. Local governments and NGOs are also beginning to invest in digital health initiatives, but the pace of change is uneven. For instance, many new-age firms are focusing on elective surgeries and leveraging technology to enhance patient experiences. Additionally, the decentralisation of work has opened up opportunities for tech talent in these cities, further supporting the growth of health IT.”
From telemedicine to Electronic Health Records (EHRs), health IT is gaining momentum in non-metro cities. Additionally, AI-driven diagnostic tools are helping clinicians make more accurate and faster diagnoses, which is critical in resource-limited settings. Emerging technologies like cloud computing, data analytics, and AI-driven platforms are being used to support healthcare providers in streamlining operations, tracking patient data, and ensuring timely diagnostics.
However, deployment is still uneven which could be because of limitations in digital literacy, infrastructure and slowing the scaling of digital healthcare tools in these areas.
With technological innovations paving the way forward in these areas, strengthening the workforce with proper skill and development should be the utmost priority.
Dr Bilal Thangal T M, Medical Lead, NURA also shares, “The future of healthcare in tier 2 and tier 3 cities of India will be shaped by newer technologies, like AI-enabled health screenings. These areas, however, have gaps in healthcare service due to the unavailability of a well-developed health IT framework that can make use of their existing healthcare needs. We are making a paradigm shift in how preventative medicine is approached by integrating advanced technology that improves patient care and aids in detecting potential illness at earlier stages.”
Health IT skill development programs are essential, focusing on digital literacy, data management, and telemedicine, which are critical for leveraging the full potential of digital health systems. Medical staff and administrators who are proficient in these areas can drive a culture of technological integration, improving care quality and operational efficiency.
Talking about upskilling, Deepak Sharma, Co-Founder & CEO, MedLern said, “The adoption of health IT in tier 2 and tier 3 cities is accelerating, though still in its infancy compared to tier 1 cities. Telemedicine, digital patient records, and remote consultations are becoming increasingly common, albeit unevenly distributed across urban and rural areas. Effective use of health IT requires continuous upskilling of healthcare professionals. Training programs focused on digital tools, telemedicine, and electronic health records are crucial to equipping medical staff in smaller cities to handle new technologies effectively.”
Explaining about the some of the initiatives aimed at bridging the skilling gap, Amit Sharma, CIO & Head Partnerships and CSR, Cytecare Hospitals mentions, “Addressing the skill gap in healthcare is crucial for improving service delivery in these regions. To address this pressing issue, both the government and private sectors are investing heavily in programs aimed at upgrading the skills of healthcare workers, nurses, paramedics, and doctors. Initiatives led by the National Skill Development Corporation (NSDC) and the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) focus on upgrading the skills of healthcare professionals. These programs cover various domains such as nursing, emergency care, and lab technology, ensuring that the workforce is well-equipped to meet the growing demands of the healthcare sector.Under the Healthcare Sector Skill Council (HSSC), standardised training protocols have been established for various domains, including nursing, emergency care, lab technology, and medical coding. This collaborative approach ensures that the training provided aligns with industry standards and effectively meets local healthcare demands.”
Ayushman Bharat Digital Mission (ABDM): A game changer for digital healthcare?
ABDM with an aim of establishing a digital health ecosystem through personal Ids and a digital registry is working on improving coordination between healthcare providers and empower patients.
Explaining how ABDM has streamlined health insurance procedures, Dhrubaa Ghosh, Partner, Healthcare, Management Consulting, BDO India said, “ABDM has streamlined health insurance procedures by linking digital health records with programs such as Pradhan Mantri Jan Arogya Yojana (PMJAY) resulting in faster claim resolutions, decreased fraud and enhanced efficiency of the healthcare system. The launch of Pradhan Mantri Jan Arogya Yojana (PMJAY) in 2018 has increased the demand for secondary and tertiary care services. Given the concentration of hospital supply in tier 1 cities and increasing demand in tier 2 and 3 cities from rising affordability and PMJAY entitlements, there will be an acute gap of hospital beds in tier 2/3 cities. Therefore ABDM is expected to reduce the burden on tier 2 and 3 city hospitals and clinics by eliminating the need for redundant tests and procedures, as all patient information will be accessible digitally.”
She also stresses, “ABDM is a transformative initiative, driving the digitisation of healthcare infrastructure, improving accessibility, and fostering innovations in the Indian healthcare landscape. However, there are obstacles that must be overcome in order to fully achieve the mission’s objectives including issues related to data security and digital literacy. It is essential to ensure that healthcare professionals and patients have the skills to navigate platforms and that strict adherence to data privacy laws is maintained.”
By creating a robust digital infrastructure, ABDM is expected to reduce disparities, especially in tier 2 and tier 3 cities, offering residents a chance to benefit from streamlined healthcare services similar to those available in more developed regions.
Public-Private Partnerships (PPPs): Catalysts for health IT advancement
PPPs are playing a crucial role in advancing healthcare technology, particularly in regions with limited resources. This is because PPPs can help in pooling resources and expertise facilitating investments in infrastructure, training and service delivery.
Such efforts are not only crucial in enhancing healthcare delivery but also in making it financially viable to implement high-tech solutions at scale.
Vikram Thaploo, CEO-Telehealth, Apollo Hospitals Enterprises mentions, “PPPs are playing an essential role in advancing healthcare technologies. Collaborations between the government and private sector are driving innovations like AI-based diagnostics, cloud platforms, and telemedicine, which are helping to improve healthcare access in underserved areas. These partnerships are crucial as 67 per cent of India’s population resides in rural areas, where healthcare access is limited. By integrating technology-driven solutions, healthcare providers can effectively address disparities in healthcare availability and quality.”
Dandwate also opines, “PPPs are accelerating the development of healthcare infrastructure in these regions. Enhanced viability gap funding and incentives for healthcare startups are also facilitating cost-effective hospital expansions. Tier 2 and 3 cities present distinct advantages, including lower operational costs and growing patient demand driven by rising incomes. These factors not only enhance the sustainability of healthcare businesses but also generate significant social impact. Improved healthcare access leads to healthier communities, which, in turn, stimulates local economic growth. If executed effectively, this model can serve as a blueprint for global healthcare. Much like India, 70-80 per cent of the world’s population lacks access to quality care. While challenges may differ across regions, solutions tested in India bring us closer to addressing these global healthcare gaps. It’s time for global investors to view India’s healthcare transformation as a launchpad for scalable solutions that can benefit the world at large.”
Challenges in scaling health IT infrastructure
Scaling health IT infrastructure in these growing cities is not without obstacles. Infrastructure limitations, such as inconsistent internet connectivity and unreliable power supply, present a significant challenge. Financial constraints, too, hinder the expansion of digital solutions.
Dr Singh shares that the fragmentation of IT solutions and weak security and privacy frameworks limit the potential of technology in advancing comprehensive primary healthcare. Addressing these challenges requires a concerted effort from all stakeholders to ensure sustainable and scalable healthcare solutions.
Dr Venkatesh Mule, General Manager-Operations, Sahyadri Super Speciality Hospital, Karad said, “Challenges include infrastructure deficits, such as inconsistent internet connectivity, which hinder the operation of health IT systems. Additionally, there is often a resistance to change among healthcare providers and patients due to a lack of familiarity with new technologies. To overcome these challenges of scaling health IT, such as infrastructure deficits and resistance to new technologies, it’s essential to invest in robust and reliable IT infrastructure. Providing comprehensive training programs for healthcare providers and patients can facilitate familiarity and acceptance of new technologies. Moreover, engaging healthcare workers in the planning and implementation phases can foster a collaborative environment that supports change and can promote the benefits of health IT systems.”
Vinesh Gadhia, Executive Director and CEO, Ferty9 Fertility Center also shares, “Expanding health IT in less urbanised areas necessitates bridging infrastructural disparities and overcoming resistance to new technologies, often constrained by funding. Integrating diverse IT solutions poses a significant challenge, especially when independent systems must interact seamlessly. Ensuring smooth data flow across these systems is vital for success but demands meticulous coordination and compatibility. Addressing interoperability issues and synchronising data can be particularly challenging in smaller cities, where technical resources may be limited.”
Future Outlook: Investing in a digitally-driven healthcare ecosystem
By addressing current limitations and continuing to invest in technological innovations and skill development, these cities could become strongholds of healthcare excellence, setting benchmarks that could even guide the advancement of tier 1 cities.
Talking about way forward, Pooja Chatrath- Chief Information Officer Oncquest Laboratories said, “ The future outlook for growth and investment in the healthcare sector is promising, driven by technological advancements and the rise of personalised medicine. Governments worldwide are increasing investments in healthcare systems to enhance access and quality of care. The Internet of Things (IoT) is set to enable continuous health monitoring, fostering proactive care. Moreover, cloud-based solutions will provide scalable infrastructure for healthcare organisations, facilitating the adoption of advanced technologies and improving overall efficiency through standardised interoperability frameworks.”
Through digitalisation, strategic collaborations, and workforce development, tier 2 and tier 3 cities stand at the cusp of a healthcare revolution, one that promises to deliver affordable, accessible, and high-quality care to millions more in the coming years.
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