What is the current estimate of overall healthcare service market in India and how do you foresee the growth trend over next 3-5 years?
Currently, the healthcare service market in India is estimated at approximately US$ 23 billion, and growing at nearly 21%. The market forecast for next 3 to 5 years seem to be very exciting and we are expecting this trend to continue for sometime.
Apart from the low dollar-to-rupee ratio, what are the key drivers behind the phenomenal growth of Indian healthcare industry?
Key growth drivers for the Indian healthcare industry may be identified as –
Increasing corporatisation of the delivery sector (Hospitals, Diagnostics and Retail)
Medical tourism (primarily cardiology, orthopedics and dental treatment; projected to bring in US$ 2bn into the kitty by 2010)
Growing role of health insurance efforts by private players (insurance premium potential of US$ 1bn; disease specific programs)
Health awareness in urban areas and increase in lifestyle related diseases
Allocation of large funds by Government (to the tune of Rs 15,291 crore) and national programs like NRHM (having an additional outlay of Rs 8,207 crores)
Overall growth in Indian economy (8% annually)
“Most of the corporate hospitals are investing in new IT applications and they will continue to invest, as they have a clear road-map for Health IT”
What is your perception about the current maturity level of Indian healthcare industry in terms of IT adoption and capacity for technology uptake?
The maturity level of healthcare industry in terms of IT adoption and capacity can be well understood by looking at the trend in their IT investment. A mid-size hospital in India spends less than 1.5% of turnover on IT, while a large hospital spends nearly 2% (new investments plus the annual maintenance). In green-field projects, the average IT spend is 3-4% of total project cost for tier I hospitals. Considering expansion plans of existing hospitals, the average IT spend would be between 1.5%-2.5% of annual budget.
Although market projections for healthcare IT seem to be very promising, most solution providers bear apprehension as to how much of it will convert into actual investments. What is your observation in this regard?
Most of the corporate hospitals are investing in new IT applications and they will continue to invest as they have a clear road-map for Health IT. However, in case of large stand alone hospitals not many of them are adopting latest IT applications – except few progressive hospitals. Mid-size hospitals are still looking for stabilizing their back-end work. Overall, the trend signifies that most corporate hospitals and few large public hospitals are looking for clinical applications, ERP, EMR, PACS, CRM etc., but rest of them (small to mid-size) are looking at putting their back-end operations in order by using various low-end IT applications. But in last 2-3 years the IT adoption has gone high in every segment of hospitals. Hospitals have also started hiring professionals to manage their IT infrastructure.
Lack of proper understanding of process-related improvements and long-term business benefits of IT implementation in hospitals is sighted as the biggest deterrent for proliferation of health IT market. Why do you think service providers have such a long learning curve to guage the benefits of IT investments?
Traditionally, most of the hospitals are not used to having a planned IT budget, but now they have started allocating a certain percentage of their revenue towards IT. As regards investment, they see a clear ROI in medical devices but not that much in IT. However, it is encouraging to note that they have started appreciating the benefits of IT. IT is anyway playing a critical role in healthcare delivery segment. It is just a matter of time when patients, insurance companies, TPAs and government agencies start demanding the hospitals for various information/data, which can be made available only through good IT infrastructure and applications. Standardisation (in processes, care delivery, protocol etc) in healthcare delivery will be a major help for smooth IT implementation in healthcare facilities.
Standardisation of service delivery, clinical procedures, information management and pricing are cornerstones for bringing out uniformity across the industry and delivering high value for patients. What possible strategies can government and industry adopt, considering the present fragmentation existing in the industry?
To begin with, government should start unique identification number for every citizen as we have for Income Tax Payers. Some of the other means can be accreditation of healthcare facilities, pricing policies for hospitals, health information exchange across healthcare facilities and introduction of an Act similar to HIPAA in US.
How important is the need for a National Health Information Exchange in India – something insurers have started demanding in order to regulate the service provider segment?
I think it is very critical to have a National Health Information Exchange for India. We should learn from other developed nations where they have implemented such kind of exchanges and implement customized version of the same that will work for us. In addition, the Indian healthcare system should have public private partnership for policy framework and implementation. Hospitals, Government agencies and IT companies should work towards it as part of their corporate social responsibility.