Just saw this report on Indian healthcare market by 2015 – astonishing growth rates, and very high disease rates. Needless to say, it opens up opportunities for all kinds of businesses (manufacturing, services, products) in the domestic healthcare market.
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It is an interesting study. I have had a chance to look at this sector very closely with both personal and professional interest. In this economic slowdown, this is one of the few sectors which has continued to grow and will do so on the times to come as well. While infrastructure growth will be seen coming from rural areas, the urban users in India are also becoming evolved. They know what they want, where they can get it and at what price and to help them take this intelligent decision, they are seeking more and more information. Have you ever seen the family or friend of someone who is detected with Cancer? They go berserk seeking information online.
Some of the trends that I have noticed are:
• More and more people are seeking information online. Indian user is becoming evolved day by day. They take intelligent decisions when it comes to healthcare.
• While healthcare in India is becoming more and more accessible (by availability), it is also becoming more expensive. A single stroke of critical illness is good enough to eat away savings of most individuals in India.
• Major growth would come from Medical Tourism as most overseas patients are used to accepting Indian doctors, even in their own countries.
• Internet is the most used resource for researching health conditions in the west, a trend which is expected to catch on in India very fast.
• India will be the centre for most lifestyle diseases like diabetes and obesity in the coming years.
• While everyone hopes to see growth due to medical tourism, not many are actually readying themselves for the same. The only companies gearing up are Max, Fortis, Apollo while leading surgeons and doctors in private practice are unaware of how to gear themselves up.
It would be interesting to see someone take advantage of this opportunity.
Reliance is planning to get into the healthcare market in a big way as per the report on CNBC on 11 Sep 07. I will try to find links to related news reports and post them here.
I think Indian healthcare situation is interesting. I have some personal experience with quality of healthcare available in non-Apollo/Fortis hospitals in NCR and the quality is pathetic to say the least. And it is mainly because the demand far outstrips the supply. I saw people coming from neighboring small towns for things they could have managed locally. More disposable income means people want the best possible treatment , even if they have to travel. So, I believe small town quality healthcare has big potential, more than med tourism from western countries. Medical tourism has not really taken off especially for uninsured patients seeking low cost treatment. The reason , I believe, is trust. The idea of going to India for a bypass surgery at 1/10th the cost is still considered risky.
I too believe that the India health care sector will see interesting opportunities. They could be in medical tourism, a domestic market for the growing middle and rich sectors, traditional medicine, health and wellness services.
But the most important one (from a social fabric standpoint) will be opportunities that try and tap the bottom of the social pyramid. The government has really vacated the area of providing quality healthcare at reasonable prices. That is an area where it is possible to create a business by driving costs down.
One of the interesting things the report says is mid-size hospitals (20-100 beds) are going to ‘lose value proposition’. One would think this would be a hot growth segment for healthcare entrepreneurs and doctors.
Also interesting that this coincides with Fortis’s acq of Malar, which was a loss making debt ridden hospital (Are the growth #s on the ground much less than what the report is projecting?)
Curious on how one values hospitals — apart from PE/PS, are there any metrics like multiple of rev/bed, multiple of # beds, ‘bed utilization’ and so on?
In a country like India the social/philanthropic angle of hospitals will (and should) and stay, at the cost of some profits. Its good to see some large new hospitals treating less privilaged people at good discounts. Let’s not adopt the Western models as-is.