Gauging Opportunities, Identifying Perils & Probing Solutions: India’s Healthcare Sector
India’s favourable demography and rising income levels are definitely a huge potential that the diagnostics sector can look upon to spur further growth.
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India’s per capita income has witnessed significant rise from merely ₹1,705 in 1960 to ₹103,219 in 2016-17. Higher income levels have led to better living conditions and further improved the average Indian’s life expectancy from merely 32 years at independence, lower than even Africa’s average at 38 years, to a commendable 68 years today.
In addition to rising population, especially of senior citizens, the improved income level and higher life expectancy have been other factors that have contributed to further demand for better quality healthcare services. These factors are expected to propel the healthcare sector, which is currently a $65 billion industry, to grow at a rate of 15 per cent and touch $260 billion by 2020.
A famous saying states that, “A stitch in time saves nine.” It is similarly necessary to provide every individual with timely healthcare services.
It would however be pertinent to point out that any medical treatment can only commence post identification or diagnosis of the ailment. Undergoing any medical procedure without proper diagnosis is like driving a vehicle at night without headlights!
The need for diagnostics facilities has led to increased demand for such services with market growth estimated at a healthy 27.5 per cent and expected to reach approximately ₹860 billion in revenues by 2020. This growth is mainly being driven by healthcare facilities, medical diagnostics and pathological laboratories, private-public projects, and the health insurance sector especially the central government’s recently announced universal health insurance scheme.
India’s favourable demography and rising income levels are definitely a huge potential that the diagnostics sector can look upon to spur further growth. If the few glitches in terms of polices and taxation could be eased - more number of Indians could avail of quality diagnostic services since affordability will receive a fillip.
Inputs from every reliable source suggests that healthcare costs, including diagnostic procedures carried out in India are among the most affordable worldwide even when adjusted for purchasing power parity. In conclusion, it would therefore be desirable that regulatory authorities consider options that include more tiers in pricing and give new technology the benefit of reaching the people faster and more effectively.
In spite of the immense future growth potential - the diagnostics sector also faces some challenges such as political, policy and bureaucratic hurdles. In particular, the diagnostic sector faces issues such as high taxation on import of diagnostic equipment, and inadequate government funding for diagnostic services.
The most recent discussions on introducing price caps on diagnostic and medical equipment is a challenge. It must be pointed out that price control will have to be balanced with measuring value from such services, as otherwise quality and innovation tend to be impacted negatively. It also tends to hamper investment into R&D activities.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house
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