Wipro and Dun and Bradstreet (D&B) have recently come out with an explorative study titled ‘Future Thought of Business (FTOB): Healthcare’. What were the objectives behind this study?
VP – Business Solutions, Wipro |
The Future Thought of Business for Healthcare report aims to identify those trends likely to emerge in theoming decade that could significantly influence the future of business in the Indian healthcare sector. This report is an initiative to provide the healthcare sector with a tool to apprehend, strategise and tackle future challenges. Possible recommendations to address the issues so identified have also been detailed in the report. The report has been developed based on quantitative and qualitative information. Data and information collection was conducted through secondary research and interviews with industry experts.
What are the key findings?
Demand for preventive healthcare services:
- The Indian healthcare sector is gradually moving towards preventive healthcare from curative healthcare. With rising awareness levels both in the urban and rural areas and increasing disposable incomes, the coming decade is expected to witness increased demand for preventive healthcare.
- Need for preventive healthcare is expected to become even more crucial in the coming decade due to the rising incidences of lifestyle-related diseases. The incidence of lifestyle-related diseases such as diabetes and cardiovascular diseases, and the associated risk factors such as hypertension, high cholesterol and blood pressure, obesity etc are increasing at an alarming rate in India.
- This, in turn, can be attributed to urbanisation and changing corporate environment (rising stress levels and sedentary lifestyles), among others. Though, this phenomenon is no longer restricted to urban population.
- The corporate sector will play a critical role in driving growth in the preventive healthcare market. More and more corporates have now made it mandatory for regular health-checks and drive several wellness programmes to ensure a productive and healthy work-force.
Increasing penetration of both private insurance and Government health insurance schemes will bring more people under the healthcare net and will drive growth:
- With increase in penetration of health insurance, healthcare is likely to become more affordable for a larger proportion of the country’s population. Further, expansion in the health insurance segment would also have a positive rub-off impact on demand for health check-ups/preventive healthcare, which is a mandatory part of health insurance coverage.
- The liberalisation of the insurance industry in 2000 has resulted in the entry of several private and international insurance companies,
- Many state governments have also launched health insurance schemes like Employee State Insurance Act (ESI) targeted at specific sections of the population, which have been successful in improving access to healthcare.
- Social and community health insurance schemes have also been rolled out in the country.
- However, the overall level of insurance penetration continues to be low. In India, any form of insurance including the Central Government Health Scheme (CGHS) and the Employees State Insurance Scheme (ESIS), other Government sponsored schemes and private health insurance cumulatively covered only 25 per cent of the country’s population in 2010. And over three-fourths of the coverage is through the Rashtriya Swasthya Bima Yojana and other state-sponsored health insurance schemes.
- From about 75 million people covered in 2007, the estimated number of people covered by health insurance has surged to about 302 million.
- In the coming decade, driven by rising healthcare costs and the government’s increased thrust on improving access to healthcare, the penetration of health insurance is expected to increase significantly.
- Further, an increasing section of the domestic workforce is being covered by corporate health plans.
The Indian market will entice more foreign players through capital investments and technology tie-ups across various segments
- The attractiveness of the growing and under-penetrated healthcare sector is drawing foreign players into this market, through capital investments and technology tie-ups across various segments such as hospitals, diagnostics, medical equipment, etc.
- FDI in this sector between April 2000 and August 2011 stood at $1.08 billion. However, to meet the expected increase in demand for healthcare services, both from domestic population and international patients, the healthcare sector needs to scale up considerably in terms of both availability and quality of the physical infrastructure and human resources.
- As per D&B’s estimates government expenditure on healthcare is expected to remain low at 1.5 per cent of GDP in FY20. In such a scenario, private and foreign investments would have to increase substantially to ensure overall improvement in health infrastructure.
Expansion in tier-II and tier-III cities: Large number of single specialty hospitals will come up in India, driven by the rise in local income and increased awareness of specialised treatment available
- Single speciality hospitals require less manpower, equipment and infrastructure, and are easier to operate and manage.
- The higher margins enjoyed by uni-specialty vis-à-vis multi-speciality hospitals, on account of better economies of scale and cost optimisation, is increasing the attractiveness of this segment.
- Growth in tier-II and tier-III town and cities:
- there is demand for quality and specialised healthcare services, since it saves time and money spent in travelling to bigger cities for treatment.
- lower rentals and manpower costs associated with smaller towns enable healthcare companies to offer services at lower rates compared to those offered in the big cities.
- Healthcare players who have set up specialty centers in tier- II and tier-III cities also attract patients from neighbouring small towns.
- The coming decade is expected to see more super specialty centres in heart care, cancer, eye, maternal and child care, and cosmetology.
Role of IT in the healthcare sector: The need to optimise costs and increase efficiencies will make IT an integral part of hospital management
- One of the major trends to have emerged in the Indian healthcare sector in the last decade is increased adoption of IT in hospital management. Healthcare providers are increasingly adopting technology to:
- improve patient satisfaction (through reduced turnaround time at points of care);
- enhance patient safety (through improved decision-making);
- enhance productivity and elimination of human error (by way of seamless integration with medical device/equipment);
- reduce operational costs (through reduction in staff needed for back-office tasks);
- improve inventory management (by way of accurate demand estimation and timely procurement and distribution of materials
What has been the response of stakeholders to the report?
Industry leaders have appreciated the findings of the report. We recently had executive briefing where leaders of more than 30 healthcare companies visited Wipro. There we had a dedicated slot to discuss this report findings where the leaders from the industry had a vibrant discussion and exchange of thoughts on the same. Many leaders have requested for additional copies of the report or have requested to share the power point presentation. Our Linkedin campaign also got an overwhelming response with more than 40 per cent of our target group accessing the report.