Jun, 2012
Healthcare Delivery in India – RedSeer Perspective
This document is an article which covers insights on healthcare delivery in India covering the market size, factors affecting the industry and emerging models of private players. Indian healthcare delivery industry is ~USD 47 billion growing with a CAGR of 12.8% Growth in lifestyle diseases and increased access to healthcare will drive the hospital market … more
This document is an article which covers insights on healthcare delivery in India covering the market size, factors affecting the industry and emerging models of private players.
Indian healthcare delivery industry is ~USD 47 billion growing with a CAGR of 12.8%
Growth in lifestyle diseases and increased access to healthcare will drive the hospital market in India
| Key Drivers | Description |
|---|---|
| Increased Governmentexpenditure on healthcare | Maria AndersGovernment outlay on healthcare has increased from 4% in to 6.5% in Eleventh Five year plan. |
| Growth in health insurance penetration | Health insurance market is growing by 26% annually, which is providing a boost to healthcare |
| Increase in lifestyle diseases | Roland MendelLifestyle diseases market is expected to grow with 22% CAGR in the next 5 years due to increasingly sedentary nature of jobs. |
| Increased access to healthcare services | Hub-and-spoke delivery models will increase access to secondary care in tier-3 cities and large towns |
Demand- supply imbalance is leading to increased participation of private players in healthcare delivery
Key factors affecting hospitals market
TRANSITIONING MACROECONOMICFACTORS
- Changing lifestyle
- Expanding Middle class
- Growth in health insurance
- Increasing awarenes
DEMAND-SUPPLY IMBALANCE
- Insufficient healthcare workforce
- Inadequate healthcare infrastructure
PARTICIPATION OF PRIVATE PLAYERS
- Lack of infrastructure in existing Government hospitals
- Low Government spend on healthcare
Emerging healthcare delivery models for private players
40% of surgeries can be done in day-care surgery hospitals
Day-care Surgery
Key drivers:
- % of overall surgeries in volume: 40%
- Set-up Cost: 20-30% of full-fledged 100-bed hospital
- Other factors: Customer convenience and scalability of operations
Market size
- Market size (2010): USD 330 mn
- Market size Growth: 20%
- Key specialties: Orthopedics, Gynecology, General surgery
Case Study: Nova's Day Care Centres
- Established in May 2009, Nova Specialty surgery has been a pioneer in the field of day care surgeries
- Nova is funded by the GTI Group, a New York based private investment company, and New Enterprise Associates, a leading global venture capital firm
- Nova currently has 10 centres across 6 tier-1 cities
- Nova plans to open 25 centres by end of 2012
Many public-private partnership models have emerged in the past few years
Public-Private Partnerships
| Fully Public | Government role | Private role |
|---|---|---|
| Management Contract | Owns the infrastructure | Manages and operates facility for a defined period |
| Leasing | Owns the infrastructure | Leases the infrastructure under buy-back agreement |
| Joint Venture | Roland MendelInfuses capital or provides financial concession | Manages and operates as well as infuses capital |
| Build- Operate- Transfer | Raises the capital and retains ownership | Builds and operates the facility for a fixed period |
| Concessions | Stipulates regulations and monitors the performance | Takes over the ownership of existing public facility |
New chains are coming up in single specialty hospitals
Single Specialty Delivery Models
Discussion
- Currently, specialty centers are operating in mature markets and there is a huge opportunity to offer such services in tier-II and tier-III cities.
- Advantages of Single Specialty Hospitals:
– Cost efficiency due to higher volumes
– Provide higher quality care due to greater specialization
– Economies of scale and scope
– Ease of operation
– Increase consumer satisfaction
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