India presents a stark contrast in healthcare access and quality. While it has become a notable destination for medical tourism among Asian countries, this development is largely confined to urban areas.
Major hospital and clinic chains, often acquired by multinational corporations, are concentrated in cities. In contrast, rural and semi-rural regions struggle with inadequate healthcare facilities, a shortage of medical professionals, and limited diagnostic services.
Even within urban areas, disparities exist. For example, the ESI Hospital in the industrial twin-township of Pimpri-Chinchwad has been operating without a radiologist for the past decade.
Additionally, patients in private hospitals often face long waiting times for both general and ICU beds. Smaller specialty hospitals grapple with financial, human resources, and regulatory challenges.
Examining the healthcare ecosystem reveals key stakeholders: hospitals, medical professionals, diagnostic services, and patients, alongside the pharmaceutical industry.
Public data shows that India has only 7 hospital beds per 10,000 people, compared to 38 in the US and 23 in China. India’s healthcare expenditure is about 3.6% of its GDP, significantly below the global average of 8%.
Bridging the Gap
Addressing the stark gap between healthcare demand and supply, as well as the quality of service and outcome-based delivery, is crucial. Emerging digital technologies, such as Artificial Intelligence (AI), Machine Learning, and Generative AI, are poised to transform healthcare in both urban and rural India.
From a hospital management perspective, labour shortages and rising costs are global issues. Hospitals face challenges such as margin pressures, recruitment and retention of medical staff, and burnout due to consistent workload.
AI can alleviate some of these issues by handling documentation, pre-op workflows, and simplifying insurance claims, thereby reducing operational costs and dependency on human resources.
This allows medical professionals more time to focus on patient care. AI-assisted electronic health records (EHRs) also help reduce burnout among healthcare providers.
AI shows promise in predictive diagnoses and care delivery. However, its large-scale adoption is hindered by a lack of trained AI models on realistic datasets and a trust deficit among healthcare professionals.
From the patient’s viewpoint, several problems persist. Healthcare providers often prioritize bed occupancy over quality or outcome-based models.
Current AI applications in healthcare are often developed in collaboration with medical practitioners, particularly in fields like radiology and EHR management.
The traditional fee-for-service model dominates in India, focusing on filling beds and performing high-tech procedures rather than addressing patients' genuine needs, casting a shadow on the very essence of healthcare.
Despite this huge spending, patient-outcomes have not improved. Some global players and startups are now advocating for value-based care approaches and innovative pricing structures, where patient welfare would be paramount.
For example, the US spends almost equal amount on healthcare than the combined spend of rest of world countries and is expected to increase up to $9 trillion by 2030.
One of such consulting firm, Insight Tribe Healthcare Consulting Solutions, is helping the Indian healthcare ecosystem with market assessment, strategic planning, and sales and marketing.
Amit Gandhi, CEO & Founder at Insight Tribe, notes, “The Indian healthcare market presents a complex landscape with a vast and diverse population, varying income levels, and a mix of urban and rural settings. Hospitals are facing rising costs, patients need better options, and new technologies are emerging constantly.”
Comprehensive Solutions
Healthcare providers need comprehensive solutions that consider both the clinical aspects and the technological feasibility. For instance, a doctor's experience might be combined with a data scientist's knowledge to develop novel solutions for healthcare delivery.
Having both healthcare and technology specialists allows to bridge the gap between these siloed fields. Doctors can explain medical complexities to technologists, and vice versa. This ensures that technological solutions are designed with the specific needs of healthcare providers and patients in mind.
Innovation often faces high failure rates. Estimates suggest that up to 70-90% of innovations fail due to various factors, including poor market fit and implementation challenges. By grounding insights in data and focusing on practical solutions, these risks can be significantly reduced, ensuring that healthcare providers achieve their strategic goals effectively.
“By harnessing the power of data and AI, hidden patterns and trends can be uncovered that would otherwise remain obscured. For example, while working with a US-based paediatric clinic looking to expand in India, we utilized Google Reviews to analyse consumer behaviour.
This data-driven approach yielded profound insights into decision-making patterns, consumer expectations, and market dynamics. We believe that the entire process of generating insights through multiple stakeholders and perspectives is of paramount importance,” explains Amit.
Social Context in India
India has started building stronger manufacturing and design capabilities in producing cutting-edge healthcare products and solutions. In the service delivery space too, it is now developing more innovative healthcare delivery models that are aimed at achieving apparently contrasting objectives of improving the quality of care and remaining affordable.
“More than 80 per cent of med-tech equipment is imported in India as of now, and the price realization for healthcare procedures in India is one-tenth of that in the rest of the world.
There is a greater need to work closely with healthcare providers to ensure their strategies align with the social and cultural contexts of the Indian market.
Hence, there is an increased need to incorporate telehealth, electronic medical records, and other digital tools into their strategies to improve access and efficiency,” asserts Amit.
Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (June 30, 2024)
Total hospitals empanelled: 29,000+
Private hospitals: 12,625
Approved hospital admissions till January 2024: ~6.2 crore
Senior citizens (70+ years): 57.5 lakh admissions
Government expenditure on treatments (last six years till January 2024): Rs 79,200 crore
Expenditure on senior citizens (70+ years): Rs 9,878.5 crore
Number of Ayushman Arogya Mandirs established: ~1.73 lakh
Healthcare Startups in India (2023)
Number of startups launched: ~200
Number of Series A or Series B startups: ~40
Private equity capital flow into hospitals, specialty chains: $4 billion+
Hospital industry EBITDA multiple: 20-25x
Number of beds added: 2000+
Sector growth rate: ~20% YoY
(Source: Inc42)