In any modern healthcare system, laboratory diagnostics play a crucial role for effective functioning of the overall care delivery system. Pathology and radiology have withnessed huge transformation in the last decade thanks to technological advancements and innovative practices. Elets News Network (ENN) explores all the aspects of the Indian diagnostic industry–huge underlying opportunity, challenges and how PPP models have driven the market.
With the rapid growth of the Indian economy in recent times and the changing demography and socio-economic mix of the Indian population, there has been an immense change to the healthcare requirements in the country. Over the years, the public and private sectors have helped in addressing the health needs of the country, paving way for India’s progress on key health indicators like life expectancy and infant mortality. Diagnostics is one of the primers of the whole spectrum of healthcare delivery system, paving path for enriched healthcare experience to masses.
SIGNIFICANCE AND MARKET OF DIAGNOSTICS
Diagnosis is the first step to disease management, as without accurate identification there is no possibility for accurate treatment. India is a land full of opportunities for players in the diagnostic service industry. The country has become one of the major destinations for various diagnostic services.
The diagnostic market in India is around Rs 75000 crore market divided into two parts — private and government. Out of this, pathology and radiology in private sector is about Rs 45000 crore and government sector is for about Rs 27000- 28000cr. 80% of Indian diagnostics is unorganized and if we look at the market share tier-wise then Tier 1 city has 40-50% share and remaining comes from tier 2 and tier 3 cities.
The pathology has got three components, pre-analytical (before the sample reaches the lab), analytical (its reaches the lab) and post-analytical. So in pre and post area a lot of things are happening. In analytical the automation happened in the last couple of years, more and more automation is happening every year. The area where it is happening is pre-analytical that means right from where the samples are picked up, reaches the lab, and bar- coding. Management is becoming more focused to take care of pre-analytical errors. Analytics errors, of course, that exist for last so many years.
Post analytical error is where the report reaches the doctor, whom it is delivered, how fast it is delivered, what would be the analysis of report, what are the interpretations of report, and how do they apply report interpretation in a way which is holistically applied to a patient, that is where the whole diagnostic management is focusing on.
Right from the report comes from equipment and how to get the sample as fast as possible and without having any kind of pre-analytical error. A lot of focus is happening in sample logistics, cutting down the cost because it is price sensitive market. So it is about how to bring down the cost per reportable test and make sure more the volume is picked up less is the cost and better offering in the market. Biggest challenge to management is as there is no accreditation, no regulation as of now so anybody probably now can open a lab. Pathology labs are almost like barber shops as they have come out in every possible market and we don’t know who is running these shops whether is it a technician or a doctor or what quality controls they are following. This is creating challenge to how to good quality labs to stand out amongst all this.
PPP MODEL IN DIAGNOSTIC MARKET
Diagnosis is the first step to disease management, as without accurate identification there is no possibility for accurate treatment. India is a land full of opportunities for players in the diagnostic service industry. The country has become one of the major destinations for various diagnostic services. Also, India’s thriving economy is driving urbanization and developing an expanding middle class, with rising disposable incomes to spend on healthcare.
PPPs are fast becoming a preferred mode of delivery across various geographies of the country. There are enough examples of this model generating the desired level of services at affordable price which have led the government and the private players to work more closely and deliver better results. In fact, the government of Jharkhand has rolled out PPP for both Radiology and Pathology for all districts of the State and Healthmap, SRL and Medall are the service providers. Currently, approximately 24 states, including the north eastern states of India are delivering radio diagnosis through PPP module.
As a result some large players like Manipal Group (through its group entity Manipal Healthmap) Medall, SRL etc have focused their energies on this collaborative mode of delivery system.
These services have not only been successful in providing quality and affordable scans to the masses, but a larger chunk of the population is now showing confidence in these services. PPP is poised to take giant leap not only in radiology but even beyond as well and the Central and State Governments along with the private players are trying out innovative models to carve out a truly inclusive vehicle for a more comprehensive coverage of the complete healthcare cycle.
The government has enacted the Allied and Healthcare Professions Bill, 2018 towards standardizing and regulating the education and services by allied and healthcare professionals. However, the diagnostics industry that is critical to tackling rising NCDs still needs policy intervention towards standardization and regulation of services provided to ensure quality and efficacy. While we appreciate the Government’s efforts thus far, estimates indicate about 1% of all diagnostic labs have some kind of accreditation. The industry is in dire need of an autonomous body that regulates the quality of services provided by the sector and sets the rules as the industry evolves and faces newer and more complicated challenges.
While the government is in the midst of overhauling the current healthcare system through schemes like Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) and Mission Indradhanush, there needs to be increased focus on shifting the mindsets of citizens from curative to preventive healthcare. As diagnostics is the first step towards diagnosis and treatment choice, the industry needs to be given adequate impetus and consequently become the focal point of healthcare in India. The ambitious scheme holds a lot of promise and has the right intent, but I do hope government authorities take the right partnership approach to broad base participation.
With enough investment, the diagnostics sector can drive early diagnosis that is known to help in improving chances of curing the condition or preventing it all together and thereby eliminating the need for tertiary treatment. An effective PPP model within the wellness outreach where diagnostic test providers can participate effectively will go a long way towards the overall vision of health for all. The fact that these are preventable needs the focus and investment of the government, especially in diagnostics. It is only through better partnerships with the private industry experts that the country can achieve the vision health for all by 2022, the 75th anniversary of independence.
There is Clinical Establishment Act, which has been adopted by 4-5 states. Everybody and anybody can open a diagnostic centre. There is no quality kind of regulation. There have been some accreditations like NABL, they are voluntary in nature and not regulatory or mandatory. Government has no actual regulation to control on what kind of reports to be delivered. They tried it through CEA but there are lots of challenges in that and it has not been adopted by the states. Government is looking very seriously into this to make sure that reports are driven quality, trying to impose rules and regulations. But imposing the cost etc is not easy as balancing out for them in private players is difficult as cost in Delhi and remote area is different.
The Indian IVD market is forecast to grow at a CAGR of 7-8 percent from 2019 to 2023. IVD has witnessed several changes and additions to its gamut of offerings in the recent past. There has been a paradigm shift from traditional diagnostics to a new generation diagnostic that works on the gene level. This change was possible only due to the inclusion of advanced technology, such as genetic testing, molecular diagnostics, polymerase chain reaction (PCR), and next-generation sequencing (NGS). Fast turnaround, reliability, user-friendliness, and predictability of predisposed diseases are a few significant qualities that are making these technologies attain their share in major offerings of diagnosis providers around the world.
Though a major portion of diagnostic business is being managed by the so called unorganized sector, the diagnostic service market is expected to become much more organized and consolidated with a lot of small and independent laboratory players becoming franchisees for the larger players. In order for clients and interested companies to enter this industry, our report provides an in- depth analysis of the cost assessment comparison of most common pathological and radiological among Tier I and Tier II cities.