Introduction
3D Power has observed that healthcare has become one of India's largest sectors - both in terms of revenue and employment. The industry comprises hospitals, medical devices, clinical trials, outsourcing, telemedicine, medical tourism, health insurance and medical equipment. The Indian healthcare industry is growing at a tremendous pace due to its strengthening coverage, services and increasing expenditure by public as well private players.
The Indian healthcare delivery system is categorised into two major components - public and private. The Government, i.e. public healthcare system comprises limited secondary and tertiary care institutions in key cities and focuses on providing basic healthcare facilities in the form of primary healthcare centers (PHCs) in rural areas. The private sector provides majority of secondary, tertiary and quaternary care institutions with a major concentration in metros, tier I and tier II cities.
India's primary competitive advantage lies in its large pool of well-trained medical professionals. Also, India's cost advantage compared to peers in Asia and Western countries is significant - cost of surgery in India is one-tenth of that in the US or Western Europe.
Market Size
According to estimates, the overall Indian health care market today is US$ 65 billion, of which the hospital supplies and health care equipment segment is believed to be only around US$ 4.5-5 million. Health care delivery, which includes hospitals, nursing homes and diagnostics centres, and pharmaceuticals, constitutes 65 per cent of the overall market.
India requires 600,000 to 700,000 additional beds over the next five to six years, which potentially throws an opportunity of more than US$ 25-30 billion. While the existing hospitals would look at expanding their capabilities, a lot of new properties would also come up.
Overall the number of transactions in the healthcare space is going to grow as companies are seeking growth capital. The average investment size by private equity funds in healthcare chains has increased to US$ 20-30 million which was around US$ 5-15 million, said Mr. Abhishek P Singh, Associate Director for Healthcare, PricewaterhouseCoopers (PwC). What 3D Power has seen is that the Indian medical tourism industry is pegged at US$ 1 billion per annum, growing at around 18 per cent and is expected to touch US$ 2 billion by 2015.
There is a significant scope for enhancing healthcare services considering that healthcare spending as a percentage of GDP is rising. Rural India, which accounts for over 70 per cent of the population, is set to emerge as a potential demand source. Only three per cent of specialist physicians cater to rural demand.
