New Delhi: The Indian healthcare industry is expanding even as it is being transformed by the growing demand for quality healthcare from the increasingly affluent middleclass, the entry of large private groups, the use of advanced the technology and equipment and the availability of insurance.

India spends 5.1 per cent of its GDP on health. India’s per capita health expenditure in absolute terms is considerably lower in comparison to countries such as China, Brazil, Malaysia, Russia, UK and the US. However, if the yardstick used is per capita healthcare expenditure (ie., as a percentage of per capita income) the picture is slightly better.

The existing healthcare infrastructure consists of 23,000 primary health centres at the primary level; 2,935 community health centres; 4,400 district hospitals; 1,200 state owned hospitals at the secondary level; and 117 medical colleges and hospitals at the tertiary level. A majority of the private facilities is small — 84 per cent have fewer than 30 beds and only 6 per cent have more than 100 beds.

The Indian healthcare industry is expanding rapidly. The demand for healthcare services in the country has grown from $4.8 billion in 1991 to $22.8 billion in 2001-02, indicating a compounded annual growth rate of 16 per cent.

According to a report prepared by ICRA, the current healthcare market is estimated at Rs 1,408 billion ($30 billion), and includes pharmaceuticals, healthcare, medical and diagnostic equipment and supplies. The share of the private sector in healthcare spending is as high as 80 per cent.

The healthcare industry is being transformed radically as it tries to cater to the Indian middle class which, with its rising affluence and purchasing power, is now willing to pay for quality healthcare. Certain transformational trends are clearly discernible: the emergence of a network of high quality corporate hospitals as the private sector becomes more involved in owning and running hospitals, use of new and innovative technology in treatment and reliance on advanced equipment; and the increased availability of private health insurance.

Corporatisation of healthcare

Private hospitals have always been involved in healthcare, but they were earlier usually run by trusts. What has changed is the emergence of corporate hospitals, a concept pioneered by the Dr Pratap Reddy-promoted Apollo Hospitals group. Sensing a vast untapped opportunity in delivery of healthcare services, leading corporates have set up a chain of hospitals across the country.

The Apollo Hospitals has a chain of 41 hospitals across India and abroad, the Ranbaxy-promoted Fortis Healthcare has 12 across northern India, while the Analjit Singh-promoted Max Healthcare runs eight hospitals in and around Delhi. Wockhardt Hospitals, promoted by the pharma major of the same name, has 10 hospitals, and the Manipal Group has three tertiary and eight secondary hospitals.