The Rise of Health Tech Startups: Bridging Gaps in Indian Healthcare

The healthcare industry in India has emerged as an important contributor to the economy, incorporating diverse segments like hospitals, medical devices, telemedicine, medical tourism, health insurance, and medical equipment. Experiencing robust growth, this sector's evolution is marked by increased coverage, improved services, and heightened investments from public and private sector players. In this transformative landscape, health-tech is rapidly gaining prominence by integrating technology into healthcare practices to enhance patient care and operational efficiency, and foster innovation.

At the forefront of this evolution are health-tech startups, fundamental in reshaping healthcare delivery by making it more accessible, efficient, and patient-centric. These startups leverage cutting-edge technologies like artificial intelligence (AI), machine learning, telemedicine, wearables, and data analytics. By harnessing innovation, they develop solutions that effectively address various challenges within the healthcare industry. The synergy of healthcare and technology is ushering in a new era, promising transformative advancements in patient-centric care and overall healthcare efficacy.

The need for innovation in Indian healthcare

India's public expenditure on healthcare reached 2.1% of GDP in FY23, up from 1.6% in FY21, as per the Economic Survey 2022-23. However, India still lags the global average expenditure on public healthcare as a percentage of GDP. India also needs to catch up with the number of doctors available per 1000 inhabitants.

The Government of India's Ayushman Bharat, launched in 2018, is one of the world's largest government-backed healthcare initiatives. The government operates over 255,000 common service centers offering telemedicine, e-pharmacies, and e-diagnosis. Despite this, around 92% of the rural population faces limited access to common medicines, primarily addressing acute conditions like the common cold or short-term ailments.

The healthcare industry in India grapples with the pressing need to enhance infrastructure, ensuring both accessibility and affordability for quality healthcare nationwide. India requires a sustainable, interconnected, cost-effective, efficient, and secure model for an inclusive healthcare industry. Technology stands out as a key solution to address this important gap. Addressing the longstanding need for healthcare facilities in tier 3 and tier 4 cities, establishing neighborhood wellness centers, implementing universal health insurance, and investing in technology-driven personalized diagnostics are crucial measures, not only essential for immediate improvements in the quality of life but also represent a forward-looking approach to ease the strain on the currently overstressed healthcare facilities.

Advantages of health-tech startups and the surge in their popularity

Health-tech startups have played a pivotal role in revolutionizing healthcare operations, offering innovative solutions that streamline tasks for doctors and hospitals, ranging from patient management to surgical procedures. Leveraging data analysis and cutting-edge technologies such as artificial intelligence (AI) and thermal sensing devices, these startups have enhanced diagnostic accuracy and optimized resource allocation, thereby reducing administrative burdens and improving overall efficiency in healthcare delivery.

As per the Department for Promotion of Industry and Internal Trade (DPIIT), healthcare and life sciences emerged as one of the leading industries, boasting over 10,000 DPIIT-recognized startups in 2023. Notably, 47% of these startups hail from tier 2 and tier 3 cities across India, showcasing a widespread geographical presence. The total count of recognized startups in the healthcare and life sciences space has experienced a compounded annual growth rate (CAGR) of 127% between 2016 and 2023. Among these startups, 1002 are actively engaged in the growing health-tech sector, according to DPIIT classification.

Source: Startupindia

Health-tech startups have seen a significant surge in recent times in India, largely attributed to the growing popularity of telemedicine. This surge has been fueled by the expansion of insurance coverage and the widespread adoption of telehealth services by patients and providers, especially during the COVID-19 pandemic. Telemedicine has emerged as a crucial tool in bridging healthcare gaps by facilitating remote consultations, thereby empowering individuals in urban and rural areas alike. By overcoming geographical barriers and leveraging digital platforms, telemedicine has enabled the deprived population to access expert medical advice remotely, thus improving access to quality healthcare, particularly in regions with limited physical infrastructure.

Moreover, telemedicine has played a pivotal role in connecting patients with local care while facilitating consultations with specialists, significantly addressing healthcare inequalities between rural and urban settings, and ultimately improving healthcare outcomes nationwide. The surge in demand for teleconsultation, telepathology, teleradiology, and e-pharmacy, witnessed during the pandemic underlines the growing importance of digital healthcare solutions in India.

According to industry projections per the EY report, the telemedicine market in India is expected to grow at a robust CAGR of 31% between 2020 and 2025. The Indian e-pharmacy market is projected to experience exponential growth, with estimates suggesting a CAGR of 44% between 2019 and 2025, resulting in a market size of US$ 4.5 billion by 2025. This strong growth trajectory reflects the increasing reliance on digital healthcare solutions and the transformative impact of health-tech startups in reshaping the Indian healthcare landscape. Driven by these trends, the Indian health-tech industry is poised for remarkable expansion, with forecasts indicating a potential market size of US$ 50 billion by 2033, representing a commendable CAGR of ~26%.

Types of health-tech startups

Government initiatives

The Government of India introduced the National Digital Health Mission (NDHM) on the 74th Independence Day, which aims to establish a robust system for managing digital health data and facilitating its smooth exchange by creating registries of healthcare facilities, service providers, laboratories, and pharmacies. NDHM is designed to improve clinical decision-making and provide telemedicine services, aiming to revolutionize the health system by making it more evidence-based, transparent, and efficient. The government's emphasis on digitization will enable patients to share their health records with providers for treatment and monitoring purposes while also accessing accurate information on the credentials and costs of healthcare services. It is estimated that the comprehensive implementation of NDHM over the next decade could generate an additional economic value exceeding US$ 200 billion for the health sector.

In addition to the National Digital Health Mission (NDHM), the Indian government has introduced various initiatives and policies aimed at facilitating remote healthcare services, some of which are:

• Health ID: It entails a Unique Health ID (UHID) assigned to individuals, enabling secure access to their health information by healthcare providers with their consent.
• Digi Doctor: This initiative involves maintaining a comprehensive database of doctors, including their qualifications, specializations, and affiliations with healthcare facilities, ensuring accurate mapping of available medical resources.
• Health Facility Register (HFR): A nationwide centralized database of healthcare facilities, facilitating seamless data exchange between public and private healthcare providers, regularly updated to reflect infrastructure changes.
• Personal Health Records (PHR): It entails an electronic repository of an individual's health-related information, accessible anytime, anywhere, empowering individuals to manage and update their personal health data as needed.
• Electronic Medical Records (EMR): A web-based system containing detailed patient health records and treatment histories, aiding clinicians in patient management, health monitoring, and preventive healthcare recommendations.

These efforts are expected to drive efficiency improvements, cost reductions, and ultimately, better health outcomes and productivity through digital innovation and secure data management.

Conclusion

The rise of health-tech startups is transforming the Indian healthcare landscape by bridging critical gaps in accessibility, affordability, and quality. Leveraging innovative technologies like telemedicine and AI, these startups are revolutionizing healthcare delivery, empowering patients, and enhancing efficiency. The sector is ready for remarkable growth with supportive government initiatives like the National Digital Health Mission (NDHM) aimed at digitizing healthcare systems. As telemedicine and digital healthcare solutions continue to gain momentum, the industry's projected expansion to US$ 50 billion by 2033 highlights its pivotal role in driving positive healthcare outcomes. The synergy between technology and healthcare will drive further innovations, improve access to care, and ultimately, elevate health standards nationwide.