By 2025, the country is projected to have a population of over 150 million individuals aged 60 years and above, with nearly 18 million high-income households earning more than Rs 5,00,000 annually. The number of million-plus population cities is expected to increase from 35 to 65, leading to a surge in heart diseases, diabetes, and cancer, with a combined average annual growth rate of 47%.
The healthcare market in India has expanded significantly from around US$ 35 billion in 2007 to a staggering US$ 62 billion last year. Fueled by a 15% compound annual growth rate, the industry is poised to reach approximately US$ 125 billion by 2025. India’s healthcare system is paradoxical - on one hand, it boasts of ‘best in class’ healthcare delivery attracting medical tourists from across the world, and on the other, it is characterized by a near absence of accessible, affordable quality health services for a large part of its population. Existing infrastructure, especially in smaller towns and rural areas, is inadequate to meet the ever-growing needs of the Indian population. Less than 10% of the population is covered under health insurance, and India has less than one-third the number of doctors per capita compared to China, and almost one-hundredth compared to the USA.
However, successfully meeting the expected level of infrastructure and manpower requirements is going to be a daunting task. So far, the industry has largely been shaped by market forces instead of a planned growth based on an inclusive approach. India’s total health spending, alarmingly low at 2.2% of GDP, is well below that of most developed and some developing countries. Over 80% of healthcare spending is in the private sector. Less than 16% of the Indian population has any form of health insurance at present. The bed-to-population ratio is still inadequate, with an additional requirement of 1.1 million hospital beds. The country also needs 0.8 million more doctors and 1.7 million nurses, apart from facing a significant shortage of paramedics. Around 45% of the population travels more than 100 km to access tertiary level medical care. Poor accessibility, accountability, affordability, and availability of healthcare services are key constraints that make the idea of ‘Health for All’ a seemingly impossible goal.
Private partnerships have demonstrated successful models of non-profit, high-quality, and cost-effective healthcare services like Tata Memorial, AIIMS, Dayanand Medical College & Hospital, P.D. Hinduja Charitable Hospital, and PGI Chandigarh. These initiatives not only invest in cutting-edge technology for the benefit of the underprivileged but also set benchmarks for excellence in healthcare in India. Government support for such initiatives should be proactive rather than reactive.
The government needs to support such initiatives as a policy and not as a need-based response. In the UK, 55% of elective surgery is carried out in an ambulatory setting. In the US, there are 5,000 such centers, with AmSurg Corp being the leading player and operating over 150 centers. In India, the concept is currently in its infancy, with only 20% of all surgical procedures being done on an outpatient basis. Of these, 27% are in ophthalmology, 23% in gastroenterology, and 10% in orthopedics, followed by gynecology, plastic surgery, general surgery, podiatry, and dentistry.
Healthcare providers have now started realizing that they cannot serve all segments of the population with high-cost structures. To serve different consumer segments such as the lower-middle income, urban poor, and rural population, they need to develop low capital-intensive models. One such relatively low-cost model is that of secondary care hospitals. These are mid-sized (100-150 bedded) hospitals offering upgraded secondary care and basic diagnostic and pharmacy facilities.
The typical area per bed is around 1,000 sq ft, with an average stay of three days, average revenue per bed of Rs 12,000, and more than 25% of patients being insured. Such hospitals are easily replicable, scalable, flexible, and more affordable. Capital and overhead costs are lower than typical multi-specialty hospitals, workflows are standardized, operational management is easier, and outreach, penetration, and patient loyalty are higher. In some cases, these centers also function as feeders to the tertiary care hospitals of the same corporate group. The secondary care services market in India currently stands at Rs 55,000 crore and is expected to reach Rs 560,000 crore by 2025. A comprehensive and all-inclusive healthcare policy will be the main driving force to generate investments in tier II and tier III cities for a comprehensive secondary care services infrastructure. Not only will such a policy offer relief to the crumbling and inefficient public healthcare infrastructure but also deliver best-in-class healthcare in the heart of India.
The existing healthcare infrastructure is inadequate to meet the growing needs of the population, with less than 10% covered under health insurance. India also lags in healthcare resources compared to countries like China and the USA, with less than one-third the number of doctors per capita and a severe shortage of medical professionals. The country faces a substantial shortfall in hospital beds, doctors, nurses, and paramedics, resulting in long distances traveled by 45% of the population to access advanced medical care.
The shift towards ambulatory and outpatient care models is crucial for catering to diverse population segments with varying income levels. Secondary care hospitals, offering upgraded services with basic diagnostic and pharmacy facilities, represent a cost-effective and scalable model to reach a broader patient base. These hospitals are easier to manage, more affordable, and serve as feeders to higher-tier healthcare facilities. The secondary care services market in India is expected to grow significantly by 2025, highlighting the need for a comprehensive healthcare policy to drive investments in tier II and tier III cities.
Another area that must be thoroughly explored is uplifting and restructuring bio-similars to complement MBBS-level competence for national or regional health emergencies. The course curriculum of the final year of BDS and traditional medicines must undergo strengthening to complement MBBS-level expertise.
While COVID-19 has propelled Indian healthcare towards transformation, the fact remains that a comprehensive and inclusive healthcare policy framework is the need of the hour. This framework should aim to strengthen both the public and private healthcare sectors, enhance accessibility, and ensure the provision of quality healthcare services across the nation.
The writer is Senior Fellow CCRT, Research scholar, and an advocacy columnist. Views are personal.