Future Aspects Of The Indian Health Insurance Sector
With changes to government priority, the health sector is exciting and likely to benefit all participants as an investment opportunity.
The current pandemic of Covid-19 has proven to be a test period for all sectors of the economy, including medical care. The latter is at the core of this ongoing global crisis, and the virus has stressed that it is not able to battle new viruses and defeat them. Domain experts have frequently highlighted the current state of this sector and the potential for changes.
According to 2019 National Health Profil data, for a population of around 137 crore people, there are only 7,13,986 government hospital beds, which represent 0.5 beds per 1,000 people. Even if beds are considered in private, general, specialist, and rehabilitative hospitals, the figure is 0.7 per 1,000 people. India has a doctor of 1457, which is much lower than the 1:1000 World Health Organization norm. This sector faces an acute crisis, especially in rural and suburban areas, due to the lack of relevant healthcare infrastructures.
In terms of revenue and work creation, the Indian health sector is one of the largest. It covers hospitals, medical supplies, health services, telehealth, clinical trials, tourism, and childcare. Rising lifestyle disease events, demand for affordable health care, technological advances, and health insurance penetration are some of the main drivers for the sector’s growth.
Main perspectives on the health sector from the government’s Invest India portal are:
- The market value of healthcare is expected to hit 372 billion dollars by 2022.
- The hospital industry accounts for 80 percent of the overall healthcare sector, with CAGR rising by 16-17 percent and a projected $132 billion by 2023.
- At a CAGR of 20.4 percent, the diagnostics industry is projected to expand and hit 32 billion dollars by 2022.
- Health spending is up by 370 percent from 2000 to 2014.
- The government has granted 100 percent FDI for all automatic greenfield projects.
Telemedicine, artificial intelligence, mobile and wearable equipment, and robotic surgery are new technologies.
Under the Government’s last budget (FY 2020-21), $9.87 billion was allocated to the health sector, which includes $915.72 million for the PMJAY health system. This system includes about 8,059 private and 7,980 public hospitals and offers Ayush care to deserving patients. The Center also plans to increase its expenditure on health care to 3% of GDP by 2022.
In the healthcare sector, existing hospitals are expanding in new services through technological channels, the use of diagnostic tools of the next generation, links with insurers, regional expansion, and an emphasis on the pharmaceuticals sector.
The sector also attracts fresh investment from domestic and foreign investors to finance expansion through existing large hospital chains and greenfield projects. Global investors are keen to engage in the growth of hospital chains, diagnostic laboratories, and medical equipment. Under the Department of Industrial Policy and Promotion (DIPP), FDI has attracted $6.8 billion from April 2000 to June 2020 in the hospital and diagnostics market.
The following points illustrate the ongoing appeal of spending by the healthcare sector:
Penetration of health insurance – The understanding of health insurance plans has expanded in recent years and the introduction of affordable products on the market. The Government of India has also initiated the largest government-funded healthcare program in the world. These advances are expected to increase medical expenses’ affordability.
The huge shortage of needed beds, combined with the availability of advanced diagnostic equipment, generates an enormous demand for large hospital chains, specialty centers, and other facilities to build the related infrastructure to meet the increasing demand. Hospitals and related infrastructure
In-line consultation on medical professional insufficiency management – Online technology systems enabling consultation with remote patients are strongly requested in particular when medical professionals are not available at all. The telemedicine market in India is projected to rise by 20 percent to $32 million by 2020.
Medical tourism – The Indian health sector also draws many international patients because of its high-quality medical facilities available in urban centers at a lower cost than in the developing world. The steady flow of foreign patients would enable the overall economy of this sector to grow.
Opportunities in 2 and 3 tier cities – Increased per capita income across geographies over the last decade has increased the potential for quality health care expenditure. Unlike Tier-1 cities, where health infrastructure availability and misuse is high, Tier-2 and 3 cities give a huge opportunity to develop the entire infrastructure. Many major hospital chains have also begun to grow in small cities with the development of smaller centers and collaborations with reputable local physicians.
With recent innovations and shifts in government priorities, the health sector is promising and rising every day as an investment opportunity and is likely to benefit everyone involved.