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Introduction to Indian Healthcare Environment
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As with virtually every other segment of the global economy, including software, financial services, manufacturing etc, the healthcare industry is becoming increasingly global in nature.
Since independence in 1947, India has come a long way in achieving basic health goals. The Indian healthcare sector has now become the largest service sector. Since public and government funding has proved inadequate, the private sector and foreign direct investment has been encouraged to participate in developing this sector.
As world class medical facilities become available, the process of marketing specialized healthcare to patients from overseas is being facilitated by private healthcare sector, the tourism sector and the government of India. The Indian National Medical Policy of 2002 strongly encourages the providing of such health services to overseas patients to capitalize on the country’s comparative cost advantage. The providers of such services are encouraged by giving these services the status of "deemed exports".
Several initiatives have to succeed. India is rushing to develop an integrated system to link travel agencies, healthcare providers, insurers and patients. The popular stereotype image of India as a hot country with poverty, squalor and undeveloped infrastructure definitely does not help. The image of poverty and bad hygiene impacts the level of confidence that one needs to have before going to India for a medical procedure.
However, this being India, averages seldom show the complete picture. While the vast majority of population remains poor, there is a strong and vibrant middle class about 300 million strong. This group of consumers is demanding world class quality healthcare. This demand is essentially driving the movement of private capital towards developing healthcare institutions. As the middle class becomes assertive, they are demanding and getting better consumer orientation from the emerging healthcare institutions.
The Government liberalized entry norms in the healthcare industry for private players in the 1980s. It offers several incentives to private players; such as, land allocation at subsidized rates for new hospital projects.
Over the past two decades, a number of Indian private sector companies have set up hospital facilities and clinics. Prominent examples include Apollo, Max, Fortis, Escorts and Wockhardt; out of an estimated total of 150 that represent a rapidly growing number of high-end facilities that offer top of- the-line medical treatment.
Private hospitals account for over 32 per cent of hospital beds in India. Besides providing basic health and medical care services, these corporate hospitals often undertake complex surgeries like bone-marrow transplants, open-heart surgeries and kidney transplants.
Another area witnessing increasing corporate presence is diagnostic services. Premier Indian players in this segment include SRL-Ranbaxy, Metropolis Health Services.
Since liberalization in 1991, a growing number of Indian companies have formed alliances with foreign firms. Most have aimed at leveraging the international partners’ skills, knowledge and experience in devising and implementing improved medical care services; not relying only on capital invested.
From less than 10,000 patients visiting India for medical treatment five years ago, the medical tourism market in India is worth US$ 333 million, with about 100,000 foreign patients coming in every year.
A McKinsey & Co. and Confederation of Indian Industry (CII) study shows that at its current pace of growth, healthcare tourism alone can rake in over US$ 2 billion as additional revenue by 2012.
The Indian government has recognized the potential of preparing India to be a global healthcare destination. They are offering special incentives to hospital projects of over 100 beds. Private entrepreneurs, business groups, travel agencies and local governments are catching the trend.
- Travel agencies are increasingly offering "medical tourism" packages
- Medical cities or "med-cities" are being planned to offer comprehensive healthcare and other recuperation facilities
- Additionally, India’s costs continue to be attractively low. An open-heart procedure at a top hospital in the country would cost a patient around US$ 5000-7,000 as against US$ 50,000 in the US
| Cost Comparisons for Medical Treatment in India |
| Procedure |
Cost in the US |
Cost in India |
| Open Heart Surgery |
$30,000 |
$10,000 |
| Liver Transplant |
$300,000 |
$50,000 |
| Orthopedic Surgery |
$20,000 |
$7,000 |
| Bone Marrow Transplant |
$300,000 |
$20,000 |
| Hip Replacement |
$20,000 |
$5,000 |
| Knee Joint Replacement |
$15,000 |
$7,000 |
| Cataract Surgery |
$5,000 |
$1,500 |
| Root Canal Treatment |
$1,000 |
$150 |
| Tooth Whitening |
$1,000 |
$200 |
| Lasik Surgery |
$5,000 |
$1,000 |
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| Note: The above numbers are approximations for comparison basis. Exact numbers should be obtained from the service providers. |
As India tries to catch up by building new airports, new roads and infrastructure, there are still opportunities for purchasing world class healthcare. This web site provides you the tools to make that journey.
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