Indian healthcare is on the verge of digital transformation, bringing unlimited digital health opportunities with it.
We are happy to announce that Dr Cristina De Juan, CEO and Founder of IMT Innovation, attended the 8th annual Global Entrepreneurship Summit 2017 at Hyderabad, India.
This summit, organized by NITI Aayog, India’s highest policy advisory body, in partnership with the American Government, has an overarching theme of celebrating women entrepreneurship while focusing on four innovative industries, one of which is technological advancements in Healthcare and Life Sciences.
As India continues to undergo its momentous transformation – demographic, economic, and technological – it presents a plethora of healthcare opportunities. On this occasion of IMT’s expansion to India, we bring you a primer on digital health opportunities this mega-trend brings.
Macro-Level View of India
India’s nominal GDP is expected to reach $5 trillion by 2025 from its current $2.2 trillion in 2017, with per capita income rising by 125% to $3,650. On the Purchasing Power Parity (PPP) basis, India is already the third largest economy behind China and US.
With its population expected to reach 1.5 billion by 2026from 1.3 billion in 2015, surpassing China, it will become the largest consumer base for adopting digital innovations.
Prime Minister Narendra Modi’s bold and persistent reforms have pushed India’s ranking on the World Economic Forum’s Global Competitiveness Index to 40 in 2017 from 71 in 2014. India also registered its highest jump on the World Bank’s Ease of Doing Business Index to 100 in 2017 from 130 the previous year.
India’s burgeoning millennial population supported by the government’s policy action, technological change and globalisation, is a massive disruptive force and presents tremendous digital health opportunities.
India’s Healthcare Industry
The Indian healthcare market is expected to rise from $100 billion in 2015 to $280 billion by 2020 at a Compound Annual Growth Rate (CAGR) of 23% but is in dire need of infrastructure push and right government policy. What makes the Indian healthcare industry even more appealing to investors is its health profile, quality, affordability and accessibility.
Significant Ageing Population: Although India is one of the youngest countries, with the median age set to hit 29 years by 2020, it still has a considerable ageing population by virtue of its large population. The geriatric population in India is set to cross 168 million by 2026. That’s the population of the United Kingdom, France and Canada combined.
Increasing Share of Non-Communicable Diseases: As India progresses and invests more in healthcare, the burden of communicable diseases will keep decreasing, freeing up resources for treating non-communicable diseases. In 2000, the share of communicable diseases in the disease burden in India was 60%, which decreased to 30% by 2016and is predicted to further decrease to 22% by 2026.
Urban-Rural Divide: In a country of 1.3 billion there is a scarcity of doctors and hospitals. But, complicating this is a rather skewed urban-rural distribution of healthcare access. 60% of hospitals, 75% of dispensaries and 80% of doctors are located in urban areas serving about 28% of the population. Even in tier-1 mega cities, it takes one to two hours to arrive at the clinic due to heavy traffic. Only 37% of people have access to in-patient department facilities within a 5 km distance and only 68% have access to an out-patient department.
Human Resources Shortage: India does not meet the minimum WHO recommendations for healthcare workforce and infrastructure. India has 0.65 doctors per 1,000 population against the recommended 1 doctor per 1,000, 1.3 nurses per thousand (2.5 per thousand recommended) and 1.3 hospital beds per thousand (3.5 per thousand recommended).
Low Government Expenditure: India only spends 4.7% of it GDP on health cumulatively. Out of the 4.7%, the public sector contributes about 1.4%, the lowest out of the BRICS countries.
Low Insurance Penetration: 80% of Indians are not coveredunder any healthcare insurance scheme leading to out-of-pocket expenditure. Financial constraint is the main reason for Indians for not seeking medical advice.
Inconsistent Quality Standards: In a country as large as India, there are only 27 JCI accredited healthcare organisations, 347 accredited and 500 ‘National Accreditation Board for Hospitals and Healthcare Providers’ (NABH) applicant hospitals and 1,165 ‘National Accreditation Board for Testing and Calibration Laboratories’ (NABL) accredited medical laboratories.
How the Government Plans to Fix India’s Healthcare
The Government of India, under Prime Minister Narendra Modi, has been very proactive in terms of providing the right policy framework to reform and rejuvenate India’s ailing healthcare ecosystem. Coupled with Modi’s reforms in Ease of Doing Business and Global Competitiveness, the business atmosphere has never been better for an investor.
In March this year, the central government released the much delayed National Health Policy 2017 with a clear vision to revive India’s sluggish health delivery system. The policy aims to meet Sustainable Development Goals by 2030 and also lays the path for a soon-to-be implemented Universal Health Coverage (UHC). The policy acknowledges the need to increase public spending on health to 2.5% of the GDP by 2025 through incremental improvements.
Within this larger policy framework, the Government emphasises and bets big on the promise of digital health and related technologies in India. A ‘National Healthcare Standards Organization’ (NHSO) will be established to bring standard and evidence-based health management practices across the country.
A ‘National Health Information Network’ (NHIN) will be set up by 2025 linking all public hospitals throughout the country. ‘National eHealth Authority’ (NeHA) is already taking shape as a promotional, regulatory and standards-setting organisation for the eHealth ecosystem in India.
NeHA will soon come up with a National eHealth Policy and Strategy, design health informatics standards, set up state health records depositories and health information exchanges, and create a certification framework for health IT products. To provide interoperability to various Electronic Health Record (EHR) systems already in place, the Ministry of Health and Family Welfare is setting up an ‘Integrated Health Information Program’ (IHIP).
The National Health Policy also envisages setting up a ‘National Digital Health Authority’ (NDHA) to develop, implement and regulate various digital health interventions across the continuum of care in India. The Central Government and various State Governments have already been running more than a hundred mHealth programmes either on their own or in partnership with private and NGO organisations.
The Current Digital Health Landscape in India
The large size and potential of the Indian healthcare industry has spawned the rise of hundreds of digital health programs and start-ups across the continuum of care with space and need for more fresh, disruptive ideas. Indian digital health companies largely operate in the seven segments outlined below –
- Remote Diagnosis: The majority of the Indian population survives on a basic daily income and have to spend out of their pocket for any medical expenditure. Digital interventions that provide access to healthcare for remote and rural populations through teleconsulting, e-prescriptions and point-of-care diagnostics have been successful in India. This remote healthcare delivery market in India wass estimated to be $7.5 million in 2011 and is expected to grow at a CAGR of 20%.
- mHealth: mHealth is the largest of the digital health segments in India, with a market size of $321 million in 2015 and is set to rise to $800 million by 2020. Mobile technology in healthcare is also gaining increased acceptance and viewed favourably by more than 60% of Indian doctors. Mobile apps that connect doctors to patients and enable remote prescriptions are becoming quite popular in India.
- Telemedicine: Telemedicine in India has helped rural and remote populations access healthcare and bring down patient and provider costs. The Indian telemedicine market was estimated to be $400 million in 2016 and is estimated grow at a CAGR of 35%. Low cost and wide reach over satellite, reduced technology costs, availability of qualified personnel, dedicated satellite for health communications by ‘Indian Space Research Organisation’ (ISRO), and presence of strong infrastructure in the form of the National Telemedicine Grid are the key growth drivers for telemedicine in India.
- Digital and Social Connectivity: With the average Indian spending 25% of their time on social networks, connectivity is an upward trend. This led to knowledge portals, patient support communities, online platforms where physicians share their expertise and websites that help connect doctors around the world for a second opinion.
- Health Wearables: As with other parts of the world, the health-conscious Indians are also investing in health wearables that track diet and fitness activity. The current healthcare wearables market in India is estimated to be $4.62 million and is expected to rise as wearables costs decrease and household incomes increase.
- Appointment Management: While technically a sub-domain of telemedicine, appointment management requires special mention. Need for more doctors, long waiting times at the clinics, longer commute times even in metros have made appointment management apps like SeeDoc, Zoctr and Practovery popular in India.
- Online Pharma: India is already the global leader in generic pharmaceuticals. With the rise in online retail in India, online pharma sales have also been expectedly increasing. As the Government readies its policy on online pharma sales, the existing uncertainties will disappear and this segment is likely to attract much investment.
Apart from these seven segments, the Indian digital health scenario is also witnessing increased adoption of Big Data Analytics, smart cities-based healthcare norms and EHRs on a big scale.
The Indian healthcare sector is already attracting large amounts of Foreign Direct Investment (FDI) and it is natural that some of it will go into digital health. Between 2012 and 2015, FDI in Indian healthcare witnessed a 51% increase to a total of $17.5 billion, with medical tourism being a popular segment. The hospital and diagnostic centres attracted $4.34 billion worth FDI between 2000 and 2017.
The dire need of infrastructure, right policy framework, increased government expenditure on health, favourable demographics, increased mobile and social connectivity, vast rural population which acts as a potential demand source, accelerating urbanisation are the key growth drivers of this massive healthcare opportunity.
A strong foundation for digital disruption in healthcare is waiting for entrepreneurs and investors to make the most of these digital opportunities in what will soon be one of the largest healthcare markets in the world.