A report by Chiratae Ventures, Amazon Web Services (AWS), and Redseer Strategy Consultants on preventive healthcare points out that the sector is expected to grow at a CAGR of 22%, to reach $197 billion by 2025. With a value of USD $93 Bn in 2021, preventive accounts for approximately 36% of the overall healthcare expenditure in India.

In this week’s newsletter, Amitabh Kumar and his team examine the potential of this burgeoning sector. Buoyed by increased interest from the market and investors as well as the emergence of new technologies, the preventive healthcare market is proving quite literally that prevention is indeed better than cure.

1. The preventive healthcare market is poised for immense growth and is expected to gain greater momentum than the curative market

The current value of the healthcare industry, which includes both the preventive and curative sectors, is estimated to be $259 billion, and it is anticipated that this value will continue to expand until it reaches $487 billion by the year 2025. The market for preventive care is expected to reach $93 billion over the next several years, making it the sector with the highest potential for expansion.

2. The top drivers of this segment are an increased awareness of how preventive healthcare can improve patient outcomes and a rise in spendable income

Rising urbanization, government initiatives, and access to online information have led to increased awareness about healthcare in India. In addition to this, it was only inevitable thatCOVID-19 too changed people’s attitude towards personal health and hygiene, while accelerating the adoption of digital technologies such as telemedicine. Further, the increasing prevalence of lifestyle diseases such as diabetes and hypertension is leading to a demand for high quality healthcare in today’s day and age. Lastly, individuals as well as the government have increased spending on various healthcare services, including insurance and preventive healthcare.

3. Existing well-established players and larger conglomerates are building products and solutions to cater to the growing demand and expanding their scope through vertical and horizontal strategies

More than 40 preventive healthcare technology (“HealthTech”) start-ups have raised approximately USD $1 Bn in funding over the last three years to tap into the preventive health opportunity across segments such as nutrition management, condition management, lifestyle monitoring, health check-ups, and mental and physical wellness. With most of the spending coming from individuals, the opportunities to leverage this segment are immense.

4. Further fueling the growth is the rise of a new cohort of health-conscious individuals (HCIs) who are willing to pay up to 50% more for better health

Close to 90% of HCIs have used apps and devices for monitoring their health. They have also spent between Rs. 4000-Rs. 10,000 on average per annum on preventive healthcare. Catering to this rising demand for prevention, a number of start-ups have cropped up. Start-ups in the physical wellness category have raised the most funds.

5. As a result, HealthTech startups are leveraging data and technology to drive improved wellness and clinical outcomes with more cost-efficiency and effectiveness

We see a growing acceptance of digital health among consumers, patients, and other industry stakeholders. This creates an opportunity for startups to capture and analyze vast amounts of data, leveraging new age technologies on top of it to solve for preventive health use cases.

Author

  • Kanishka is a consultant who specialises in helping clients plan and carry out research that produces insights that can be put to use. His consultancy experience includes early-stage investing, consumer internet, and process modernization for banks.