Diagnostics beyond metros: Bridging the gap

India’s tier 2 and tier 3 cities have historically faced significant challenges in healthcare, particularly in diagnostics. Limited infrastructure, a shortage of trained professionals, and low awareness about preventive healthcare have resulted in delayed diagnoses and inadequate treatment. However, a paradigm shift is underway, driven by advancements in technology, government initiatives, and increased private sector investments. While substantial progress has been made, challenges persist, necessitating a multi-pronged approach to ensure equitable access to quality diagnostic services.

Dr Aakaar Kapoor, CEO and Lead Medical Advisor, City X-Ray and Scan Clinic; Founder and Partner, City Imaging & Clinical Labs says, “Tier 2 and 3 cities play a crucial role in shaping the future of healthcare in India. These regions serve 67 per cent of the population, yet face significant challenges in healthcare accessibility, with a doctor-topatient ratio of 1:25,000. Demand for diagnostic testing is witnessing rapid increase in smaller towns, prompting organised diagnostic services firms to focus on expanding into these areas.”

“Tier-2, tier-3, and smaller towns are increasing at a 25 per cent compounded annual growth rate (CAGR), whereas metros are growing at 10 per cent (due to their large base). According to preliminary estimates, tier-2 and 3 towns provide for around 40 per cent of total diagnostic sector income, with the remainder coming from the top cities. While metro markets are increasing at 10 per cent, smaller communities are growing at around 25 per cent. Within 2-3 years, the revenue ratio between major cities and small villages is predicted to reach 50/50.

The diagnostics sector in India is presently valued at $14-15 billion and increasing at a rate of 13-14 per cent per year. The organised sector accounts for about 25 per cent of this segment (15 per cent in laboratories and 10 per cent in radiology).” 

Dr Maithili Kavathekar, Director-Lab Services, Sahyadri Hospitals, Sahyadri Speciality Labs also mentions, “The diagnostics industry in India’s smaller cities is changing a lot. These changes show a shift in healthcare priorities, with more focus on using technology and preventing diseases. Smaller cities are starting to have better healthcare services, which are becoming more like those in bigger cities.”

Current state of diagnostics infrastructure in tier 2 and tier 3 

The diagnostic ecosystem in smaller cities has traditionally been fragmented, with a heavy reliance on primary healthcare centres and local pathology labs with limited capabilities. Many tier 2 and tier 3 cities lack advanced diagnostic equipment such as MRI and CT scanners, often requiring patients to travel to metros for critical tests.

Surendran Chemmenkotil, CEO, Metropolis Healthcare stresses, “India’s diagnostics industry is valued at approximately US$13 billion in FY23, however, it is largely fragmented, with a significant presence of standalone centres and private hospital-based labs, while national chains hold a smaller share of the market. In tier 2 and tier 3 cities, this fragmentation leads to challenges such as inconsistent quality standards and limited access to advanced diagnostic services. The uneven distribution of healthcare facilities further exacerbates disparities in diagnostic accessibility. However, the rising prevalence of chronic diseases and an increasing demand for preventive tests are driving the need for improved diagnostic infrastructure in these regions. Government initiatives and private sector investments are gradually enhancing the availability and quality of diagnostic services, aiming to bridge the existing gaps and ensure equitable healthcare access across the country.” While many diagnostic chains are expanding their footprints, the penetration remains insufficient to cater to the growing population’s needs. Furthermore, the cost of setting up advanced diagnostic centres remains a major deterrent, leading to gaps in service availability.

According to Professor Vijay Chandru, Co-Founder and Director, Strand Life Sciences and CrisprBits, “Diagnostics infrastructure in tier 2 and tier 3 cities is often outdated, with many regions relying on older generation equipment and limited facilities. For example, molecular diagnostic tests, essential for identifying genetic disorders or identifying the right therapies for cancers, are still unavailable or unaffordable in several small towns. This lack of access leads to delays in diagnosis and treatment, disproportionately affecting health outcomes in these regions.”

 

Technology adoption to bridge geographical barriers 

To bridge geographical barriers, technology-driven solutions like tele-diagnostics are gaining momentum. The integration of artificial intelligence (AI) and digital pathology has enabled remote analysis of samples, reducing turnaround time and improving diagnostic accuracy. 

The health IT ecosystem in India’s tier 2 and tier 3 cities is growing yet still fragmented. While metropolitan areas have advanced healthcare systems that include digital solutions, smaller cities frequently lack basic IT infrastructure. 

Dr Kapoor stressses, “Many healthcare practitioners continue to use manual record-keeping methods and confront data management issues. However, there is a rising recognition of the need for digital solutions, resulting in the steady use of electronic health records (EHRs), telemedicine platforms, and mobile health applications.” 

Chander Shekhar Sibal, Vice President-Medical Systems Division, FUJIFILM India highlights that, “Advancements in diagnostic technology, such as handheld X-ray devices and mobile imaging solutions, are playing a crucial role in bridging geographical barriers. These innovations enable healthcare professionals to conduct on-the-spot diagnostics, facilitating early detection of critical diseases even in remote areas.”

Dr Nanda Kachare, Consultant – Pathology & Head of Department of pathology and Laboratory Medicine, Jupiter Hospital suggest, “Connecting the reference laboratories with the small scale laboratories in rural & tier 2 cities could enhance the use of advanced tests like molecular, cytogenetic testing and NGS facilities for the patients in rural areas and small cities.” 

Tele-radiology, where scans are interpreted remotely by expert radiologists, has significantly enhanced access to specialised care. Mobile diagnostic units equipped with portable devices are also playing a crucial role in reaching underserved areas, ensuring timely intervention for patients in need.

Explaining how tele-diagnostics is emerging as a gamechanger in bridging the healthcare divide between urban and rural areas, Dr Kavathekar shares, “This technology allows for remote consultation and diagnosis, thus overcoming the geographical and logistical barriers that often are challenging in accessing healthcare services in less developed areas. For instance, digital platforms can transmit radiological images and medical test results to specialists in urban centres for analysis and diagnosis. This not only speeds up the healthcare delivery process but also ensures that patients in tier 2 and tier 3 cities receive expert opinions without the need for extensive travel.”

Professor Chandru also explains, “Another interesting trend is in the growth of point-of-care testing as we have learnt to miniaturise and make portable the instrumentation required to take testing into the remote field sites and at the point of need. Portable imaging platforms bolstered by AI, battery-operated PCRs and cutting-edge point-of-care nucleic methods using isothermal amplification and even CRISPR-guided detection systems are at various stages of rollout across the country and offer great promise for public health and biosecurity, two sides of the same coin.”

“Finally, technology and reagent indigenisation for cost optimisation needs to be a major focus if we want affordable diagnostics that can reach remote corners of the country. Affordability must become a driver of innovation in these efforts. Sometimes, these optimisation efforts are not recognised as worthy of a research focus and are overlooked. Policies and funding mechanisms are needed to induce the smartest scientific and technological talent in the country to be trained on this objective.”

Role of Public-Private Partnerships (PPPs) 

PPPs have emerged as a viable model to improve the accessibility and affordability of diagnostic services. Several state governments have collaborated with private diagnostic chains to establish high-quality labs in district hospitals, offering subsidised testing for economically weaker sections. 

Emphasising on the importance of PPPs, Vikram Thaploo, CEO-Telehealth, Apollo Hospitals said, “The pandemic showcased the potential of PPPs in improving accessibility, as government agencies, healthcare providers, and technology firms collaborated to deliver faster, more efficient diagnostic solutions. PPPs can help bridge infrastructure gaps by combining government support with private sector innovation, leading to better equipment, mobile testing units, and digital diagnostics. Additionally, PPP-led training programs can address the shortage of skilled professionals, ensuring high-quality services in smaller cities.” 

The Ayushman Bharat scheme has further facilitated access by integrating diagnostics into its health and wellness centres. Encouraging such collaborations can help accelerate the expansion of diagnostic services in smaller cities and towns.

 Shiva Sriram, President of Business Development, Molbio Diagnostics shares, “The application of private sector intervention in public health matters focuses on accelerating product development and market reach of needed diagnostics. Government initiatives, such as Ayushman Bharat and PPPs, are helping address accessibility challenges by funding diagnostic services and establishing mobile health units. Corporate social responsibility (CSR) efforts are also contributing to improving accessibility in underserved regions. Despite these measures, affordability remains a concern for economically weaker populations. Continued collaboration between the government, private sector, and NGOs is essential to bridging the diagnostic gap and ensuring equitable healthcare for tier 2 and tier 3 cities.” 

Building a skilled workforce 

A major bottleneck in scaling diagnostics infrastructure in tier 2 and 3 cities is the shortage of skilled technicians and healthcare professionals. Addressing this issue requires targeted training programs to build a competent workforce. Several diagnostic chains and educational institutions have launched certification programs for lab technicians, radiologists, and pathology experts. Additionally, initiatives like online training modules and hands-on workshops can help upskill existing professionals, ensuring high-quality service delivery. 

Chemmenkotil also opines that developing a skilled workforce is imperative for the effective delivery of diagnostic services in tier 2 and tier 3 cities. 

He said, “Training programs focusing on laboratory technicians and other healthcare professionals are essential to enhance competencies in operating advanced diagnostic equipment and adhering to quality standards. Public-private partnerships can facilitate these initiatives by providing resources and expertise for comprehensive training modules. Additionally, integrating digital tools and e-learning platforms can make training more accessible, allowing for continuous professional development. Such efforts not only improve the quality of diagnostics but also contribute to employment opportunities and economic growth in these regions, fostering a more robust healthcare ecosystem.”

Deepak Sharma, CoFounder & CEO, MedLern stresses that while challenges remain, the commitment to enhancing healthcare access through technology and workforce development represents a significant step forward in addressing the healthcare disparities faced by these regions. 

“There is an urgent need for comprehensive training programs designed to create a skilled workforce of lab technicians and healthcare professionals in tier 2 and tier 3 cities. By investing in education and training, we can empower local communities and ensure that they have the necessary resources to operate and maintain advanced diagnostic facilities. 

Sriram opines that professional development and refresher courses must be encouraged and made available to the medical staff and medical personnel. This filters down to the other areas as it improves medical care where it is greatly needed.

Dr Rajesh Bendre, Chief Pathologist and National Technical Head, Global Reference Laboratory, Apollo Diagnostics said, “Training programs in tier 2 and 3 cities will help lab technicians by helping them gain hands-on experience, certifications, and technology-driven learning for strengthening the diagnostic services in the country. This will allow for improved diagnostic accuracy and expand healthcare access, ensuring that even smaller cities have well-trained professionals to handle advanced medical testing detect any disease early, and start timely treatment.” 

According to Dr Ashwini Lekhi, Lab Director, RJN Apollo Spectra Hospital Gwalior, “Despite the challenges, there are significant opportunities to create a skilled workforce in tier 2 and 3 cities. Government initiatives and private partnerships can play a crucial role in bridging the gap. Programs like the Skill India Mission and other healthcare-focused initiatives aim to provide vocational training to individuals in smaller cities.”

Challenges, opportunities, and the need of the hour 

Despite the advancements, several challenges remain. High capital investment, lack of regulatory compliance in smaller diagnostic setups, and resistance to adopting new technologies hinder growth. Additionally, a lack of awareness about preventive healthcare continues to be a barrier, as many individuals only seek diagnostic services after the onset of severe symptoms. 

However, the rising demand for affordable healthcare solutions, increasing insurance penetration, and government-led initiatives to strengthen the healthcare ecosystem create a favourable environment for growth. To capitalise on these opportunities, stakeholders must work collaboratively to improve infrastructure, enhance affordability, and drive awareness campaigns on the importance of early diagnostics. 

Dr Lekhi also opines that government policies must focus on incentivising skilled professionals to work in tier 2 and 3 cities. Awareness campaigns are also crucial. Highlighting the importance of healthcare roles and showcasing success stories can inspire more young people to pursue careers in this field. Schools and colleges should include healthcare-related courses to introduce students to these opportunities early on. The time to act is now. With collective efforts, we can build a robust healthcare system that meets the needs of every citizen, regardless of their location. 

Way forward 

The transformation of diagnostics in tier 2 and 3 cities is a critical component of India’s broader healthcare evolution. Technology integration, partnerships, and workforce development are playing a pivotal role. Sustained efforts are needed to address the existing gaps. By pushing innovation, improving accessibility, and prioritising affordability, India can ensure that quality diagnostics reach beyond metros, ultimately leading to better health outcomes and a stronger healthcare ecosystem. 

 

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