Health care, or healthcare, is prevention, treatment, and management of illness and preservation of mental and physical well being through the services offered by the medical, nursing, and allied health professions. According to the World Health Organisation, health care embraces all the goods and services designed to promote health, including “preventive, curative and palliative interventions, whether directed to individuals or to populations”.The organised provision of such services may constitute a health care system. This can include a specific governmental organisation such as, in the UK, the National Health Service or a cooperation across the National Health Service and Social Services as in Shared Care. Before the term "health care" became popular, English-speakers referred to medicine or to the health sector and spoke of the treatment and prevention of illness and disease.
In most developed countries and many developing countries health care is provided to everyone regardless of their ability to pay. The National Health Service in the United Kingdom was the world's first universal health care system provided by government. It was established in 1948 by Clement Atlee's Labour government. Alternatively, compulsory government funded health insurance with nominal fees can be provided, as with Italy, which, according to the World Health Organisation, has the second-best health system in the world. Other examples are Medicare in Australia, established in the 1970s by the Labor government, and by the same name Medicare in Canada, established between 1966 and 1984. Universal health care contrasts to the systems like health care in the United States or South Africa, though South Africa is one of the many countries attempting health care reform.
The Indian healthcare sector has been growing at a frenetic pace in the past few years. The windfall began ever since the developed world discovered that it could get quality service for less than half the price.
The Indian healthcare market is estimated to be US$ 30 billion and includes pharmaceuticals, healthcare, medical and diagnostic equipment and surgical equipment and supplies. Revenues from the healthcare sector account for 5.2 per cent of the GDP and it employs over 4 million people. Private spending accounts for almost 80 per cent of total healthcare expenditure.
According to a study by CII-McKinsey on ‘Health in India’, India will spend US$ 45.76 billion on healthcare in the next five years as the country, on an economic upsurge, is witnessing changes in its demographic profile accompanied with lifestyle diseases and increasing medical expenses.
Coupled with the expected increase in the pharmaceutical sector, the total healthcare market in the country could increase to US$ 53-73 billion (6.2-8.5 per cent of GDP) in the next five years.
Private healthcare will continue to be the largest component in 2012 and is likely to double to US$ 35.7 billion. It could rise by an additional US$ 8.9 billion if health insurance cover is extended to the rich and middle class.
The rising Indian middle class along with its increasing purchasing power and willingness to pay for quality healthcare has led to the emergence of high quality corporate hospitals. To meet this emerging demand for improved healthcare services, a number of corporate houses have established a chain of hospitals across the country.
Some of the prominent corporate hospital networks in the country are Apollo Hospitals (41 specialty hospitals), Fortis Healthcare (12 hospitals), Max Healthcare (8 hospitals), Wockhardt Hospitals (10 hospitals), and the Manipal Group.
Simultaneously, a number of new players like Artemis Health Institute, Paras group and MediCity among others are at various stages of entering the sector.
The burgeoning healthcare market accompanied by the socio-economic changes in the population has made the Indian healthcare industry an attractive investment proposition.
The fact that nearly 90 per cent of the private healthcare is met by the unorganised sector leaves open a huge potential market for the organised sector to tap.
Accordingly, many global majors have shown a keen interest to tap the expected returns in this industry. Some of the major foreign players who have entered India include Singapore based Parkway Group and Pacific Healthcare Holding, Malaysia-based Columbia Asia, Dubai-based EMAAR Group, and US based Prexus Healthcare Partners.
Beyond Cost Advantage
It is not only the cost advantage that keeps the sector ticking. It has a high success rate and a growing credibility.
Indian specialists have performed over 500,000 major surgeries and over a million other surgical procedures including cardio-thoracic, neurological and cancer surgeries, with success rates at par with international standards.
The success rate of cardiac bypass in India is 98.7% against 97.5% in the U.S.
India's success in 110 bone marrow transplants is 80%.
The success rate in 6,000 renal transplants is 95%.
Health insurance grew by a robust growth rate of nearly 44% during 2006-07. The private sector has been steadily increasing its share over time accounting for 38 per cent of total health insurance by end-March 2007 (as against 24 per cent by end-March 2006).
With less than 10% of the population having some sort of health insurance, the potential market for health insurance is huge. McKinsey-CII estimates the number of potential insurable lives at 315 million. Swiss Re estimates a potential of US$ 7,700 million in health insurance premium by 2015. Private players who have entered the industry to tap the health insurance market include Bajaj Allianz, Royal Sundaram, Iffco Tokio, and Reliance General Insurance among others.
Apollo Hospital is setting up a standalone health insurance company in association with DKV, a leading European (Germany-based) health insurer.
US-based Aetna and Cigna Healthcare and UK-based Bupa Healthcare are looking to enter the market.
The attraction of high quality healthcare facilities at the most competitive cost has been instrumental in a large number of foreign arrivals to access healthcare services in India. Going by the current pace by which this segment has been growing, the CII-McKinsey study estimates that revenues from this segment could touch US$ 2.2 billion by 2012 (from the current figure of US$ 333 million).
The Government has also been proactive in encouraging prospects in this sector with a number of initiatives:
A new category of visa “Medical Visa” (‘M’-Visa) has been introduced which can be given for a specific purpose to foreign tourists coming into India.
Guidelines have been formulated by Department of AYUSH prescribing minimum requirements for Ayurveda and Panchkarma Centres.
In recognition of the quality of healthcare delivery services in India, a number of Indian hospitals have received accreditation from international agencies worldwide.
Five hospitals in India -- Indraprastha Apollo Hospital (New Delhi), Apollo Hospital (Chennai), Apollo Hospital (Hyderabad), Wockhardt Hospital (Mumbai) and Shroff Eye Hospital (Mumbai) -- have been accredited to the leading healthcare accreditation agency in the United States, Joint Commission International (JCI).
NHS of the UK has indicated that India is a favoured destination for surgeries.
The British Standards Institute has now accredited the Delhi-based Escorts Hospital.
India's independent credit rating agency CRISIL has assigned a grade 'A' rating to super specialty hospitals like Escorts and multi specialty hospitals like Apollo.
Wockhardt Hospital has an exclusive association with Harvard Medical International, the global arm of Harvard Medical School, the world’s leading medical institution.
Max Healthcare, in collaboration with Singapore General Hospital, is into clinical practice, research and training.