Industry Voice

A Look at Healthcare Dynamics

A summary of findings and implications in the areas of lifestyle and attitudes, medical care, prescription and OTC drugs, and insurance in 'Healthcare in India' report by Boston Analytics

Although India's healthcare system has gradually improved in the last few decades, it continues to lag behind those of its neighbouring countries. The poor state of healthcare in India may be attributed to the lack of Government funding on healthcare initiatives, as estimates reveal that the per capita spending on healthcare by the Indian Government is far below international recommendations.

Despite a steady increase in the number of medical establishments in the country, there still remains a severe shortage of sub-centres, primary health centres and community health centres. Lack of adequate healthcare is also reflected in the low density of healthcare personnel. Despite the size and reach of the public healthcare system, however, India scores poorly on most generally accepted health indicators. While different states in India have had different levels of success with implementation of PPPs, it is expected that the private sector will continue to take on an increasing role in India's healthcare system. The first annual Boston Analytics report on 'Healthcare in India' captures the state of healthcare as perceived by urban, middle-and upper-class Indians. In this report, we explore the following:

• Lifestyles and attitudes towards healthcare.
• Emergency and specialist medical care.
• Prescription and OTC drugs.
• Health insurance sources and coverage.

Lifestyle and Attitude

The expansion of India's economy has, no doubt, greatly affected the lives of its citizens. Higher levels of work-related stress, increasing time constraints and more sedentary lifestyles have increased Indian consumption of alcohol, tobacco, and fast foods/ prepared foods. This behavior, combined with higher levels of pollution, has led to an increase in obesity, cardiovascular disease, diabetes and certain types of cancer. At the same time, however, one would also suspect that more money and attention is being paid towards healthcare. In this section, Boston Analytics examines the lifestyles and attitudes towards healthcare of middle- and upper-class, urban Indians. We explore the following topics:

• Changes made in lifestyles.
• Sources of health-related information.
• Frequency of medical and dental visits.
• Preferred methods and locations for medical treatment.
• Physician-patient relationships. Select findings from this section include:
• Middle and upper-class, urban Indians appear to be cognizant of health-related issues-just about half reported engaging in a workout programme within the past year, while many also changed their diet or began using nutritional supplements.
• Those in Chennai appear to be more westernised in their attitude towards medical treatment. They are most likely to use allopathic medicine and prefer private hospitals over government hospitals and chemists/ pharmacists for treatment. Those in Kolkata, on the other hand, tend to be more traditional.
• Those who are insured are more likely to engage in 'healthy' behaviour and appear to be more comfortable navigating and operating within the modern healthcare system.

Medical Care

Two areas critical to a robust and efficient medical care system are emergency and specialist medical care. Emergency care is still in a very nascent stage all across India, while specialist medical care is markedly better for the urban, middle and upper-class Indians than for their less wealthy counterparts (both rural and urban). The current EMS infrastructure is inefficient due to the lack of critical components such as a centralised administrative body, trained emergency medical personnel, a centralised emergency phone number (similar to '911' and quality ambulance services. There are, however, signs of change in EMS due to an increase in the number of government initiatives.

The quality and availability of specialist medical care varies greatly among the different socio-economic groups and by geography, that is, urban versus rural. Despite a high annual output of medical specialist graduates, specialist medical care has traditionally been very poor in India due to 'brain drain,' or the phenomena of highly educated Indians immigrating to western countries. Given the evolving state of emergency and specialist medical care in India, Boston Analytics wanted to gauge the sentiment of middle and upper-class Indians towards medical care. In this section, we study this group's attitudes towards and experiences with the following topics:

• Quality of healthcare.
• Ability to obtain emergency and specialist care.
• Health insurance coverage of emergency and specialist care.
• Costs associated with specialist and preventive care.

Select findings from this section include:

• Despite reports of poor overall quality, it appears that urban, middle and upper-class Indians have a somewhat positive view of medical care in India.
• Those in Delhi are most likely to have a positive view of medical care in India, while those in Mumbai are most likely to have a negative view.

Prescription and OTC Drugs

Despite having the world's second largest population, India's domestic pharmaceutical revenue ($6.2 billion) is lower than that of smaller countries such as Japan ($60 billion). This is largely due to the fact that generic drugs form the bulk of what is sold in the Indian domestic pharmaceutical market. The market, however, is projected to grow from $6.2 billion in 2006 to $10.3 billion by 2010. This growth is expected to be driven by a number of factors rising life expectancy, rising income of Indian households, increasing penetration of health insurance, government action, and rising incidence of lifestyle-related diseases.

In order for drug manufacturers to properly position themselves during this time of growth, it is important to understand middle- and upper-class consumer sentiment/attitudes and experiences regarding prescription and OTC drugs. In this section, Boston Analytics explores the following:

• Health insurance coverage of prescription and OTC drugs.
• Percieved change in costs of prescription and OTC drugs.
• Most prevalent/popular OTC drugs used for common illnesses. Select findings from this section include:
• In Chennai, consumers were more likely to cite the same brand as the one they were most likely to use to treat minor ailments like headache, common cold, muscle strain, indigestion, nausea/vomiting/ diarrhea and cuts/abrasions, than consumers in any other city. Exhibit two depicts brand preference for headaches.
• Men are more likely than women to feel that costs incurred for both prescription and non-prescription drugs have increased.

Conclusion

Despite reports on the poor overall state of healthcare in India, Boston Analytics has found that middle- and upper-class, urban Indians have a relatively positive view on the healthcare system that they access and their personal lifestyles. For example, this demographic is becoming increasingly aware of the benefits of diet and exercise. They report having a generally positive view on the state of medical care in India and they anticipate an increased ability to afford healthcare over the next year. The growing confidence of middle- and upper-class, urban Indians may provide opportunities for key players in the healthcare industry to further promote and penetrate their respective markets. Increasingly healthy lifestyle changes, for instance, may subsequently increase demand for health services or nutritional products, while consumers' views on healthcare affordability may have implications for payors and healthcare providers. Sentiments and/ or behaviours, however, can vary by city, gender, income, age, education and insurance coverage. For example, in Chennai it may be more difficult to enter and become the dominant player in the non-prescription drug market. However, once a particular brand is established and reaches a critical mass in terms of market share, it may be better able to maintain its position and grow than in other cities.

With inputs from Valerie Kuo Boston Analytics
The writer is CEO and Co-founder, Boston Analytics