healthcare industry of india 1 healthcare industry of india global business project ii final report...

8/10/2019 Healthcare Industry of India 1 Healthcare Industry of India Global Business Project II Final Report Submitted By

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GLOBAL BUSINESS PROJECT II FINAL REPORT Submitted by: Anjali Raj

10BSUHH010006 Shikhar Katuva- 10BSUHH010062 Submitted to: Prof.

Girish G P Date of Submission: 31st March 2012We confirm that this is our

own report and is the final version. We have acknowledged each useof words or

ideas of another person whether written or oral.

2.Healthcare Industry of India 2 Contents 1. Executive Summary 3 2.

Introduction 4 3. History 5 4. Objective & Motivation 7 5. Wellness Industry 8

6. Healthcare Industry 9 7. Regulators 11 8. Key Players 12 9. Porters Five

Force Analysis 13 10. SWOT Analysis 15 11. PESTLE Analysis 16 12.

Conclusion & Recommendation 19 13. Appendix a. Medical Tourism 20 b.

Major Healthcare Issues 21 c. Key Developments 22 14. References 24

3.Healthcare Industry of India 3 Executive SummaryHealthcare Industry

of India is a project aimed at analyzing the Healthcare Industry of Indiaand its

future prospects. Healthcare can be Allopathic, Ayurvedic, Homeopathy, Unani,

Siddha,Naturopathy etc. Our project focuses on Allopathy as that is a

mainstream medicine in India.Healthcare contributes to 5.25% of GDP

expenditure. There is a very large market potential inIndia. Only 20% of this

industry potential is tapped. The government cannot afford to spend

thenecessary amount and hence it opens up a large area for private
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investors.The factors for the boom of this industry are more options in

healthcare financing, growingeconomy, saturation of other sectors like IT and

retail and the different models of healthcaredelivery.The key players of this

industry (on basis of number of beds) are Apollo, Fortis, Manipal,Aarvind Eye

care, Max Hospitals etc. The regulators of this industry are Government of

IndiaDirectory of Health and Family Welfare, Ministry of Health and Family

Welfare, Indian Councilof Medical Research, Central Drug Standard Control

Organization.Porters Five Forces Analysis, SWOT Analysis and PESTLE were

done. Indian environmentprovides a very good opportunity for private players

in healthcare. The growing population witha much deeper pockets and low

government participation has lead to higher demands wherepeople are willing

to pay high costs for proper medical care. Indias unmet demand forhealthcare

facilities, rapidly changing demographics, increasing private spending on

healthcare,and a readily available intellectual pool are fuelling the growth of the

healthcare industry andmaking it highly attractive for investors

4.Healthcare Industry of India 4 IntroductionThe health care industry is a

sector within the economic system which provides products andservices like

diagnosis, treatment and prevention of diseases, illness and injury. Health care

isdelivered by practitioners from the fields of medicine, nursing, psychiatry,

dentistry and others.Allopathic healthcare & Ayurveda are the two main forms
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of healthcare practiced in India.Homeopathy is also practiced but in

comparatively lesser amounts.Ayurveda, the oldest most comprehensive

scientific discipline is known as the knowledge of lifeand longevity. It has been

preached and practiced since the ancient times. Ayurvedic medicineshave ways

to totally rejuvenate the body and mind. All ayurvedic medicines are

botanicalpreparations and its a holistic approach to well being of an

individual.Homeopathy on the other hand is a science developed by a German

physician, Dr. SamuelHahnemann. It is based on a principle like cures like.

It means that any substance whichproduces symptoms in a healthy person can

cure similar symptoms in a sick person.Healthcare can be through products or

services and can be provided privately or publicly.Healthcare sector is said to

be the sector which will largely influence the economic growth of thecountry

along with IT and Education sector. This sector will generate 40 million new

jobs and200 billion in revenue by 2020.Private healthcare, with hospital chains

exploring the markets in tier II cities and metros is anemerging part of the

healthcare sector. Also, the PPP model helps in improving the

healthcareprovision of India through development and delivery of low cost,

basic healthcare services.Since the healthcare industry is highly fragmented, the

industry is divided among many differentcompanies. Price levels cannot be

influenced by one player as no single firm has large enoughmarket share to


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influence price.The primary demand drivers of the industry are advances in

medical care and technology,increasing life expectancy, patients demanding

more services and breakthroughs & populationgrowth rate. The drivers of

profitability are effective management of patient demand, obtaininggrants and

funds & referring patients to the most cost effective providers.Access to health

care varies in different countries owing to the influence by the social,

economicand judicial influence. As in, the health care industry is distributed

among market participants insome places while its controlled by the

Government at many. Anyhow, according to the WHO(World Health

Organization), for the smooth functioning of the health care industry in

anycountry, there has to be a robust backing on the financial grounds.Also,

health care forms the pillars of the national economy. Health care is one of the

worldslargest and fastest growing industries. Our main focus for this project is

Allopathic care in India.

A country of rich culture

and heritage. Where there was man, there was need formedicine. Medicine

today is a cumulative knowledge gathered for centuries. India, due to herancient

knowledge and practice initiated the system of healthcare not just through the

physicalailment of the patient but also the environment and other

elements.Unlike modern medicine during those times, medicines were dealt


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with plants, minerals, stars,spirits and voodoo. Treatment was done mainly by

priests, herbalists, sorcerers and magicians.AyurvedaAyurveda has its origin in

the Vedas, particularly the Atharva Veda. It is connected to the Hindureligion.

Ayurveda originated from the 114 hymns of the Atharva Veda. It possibly dates

back to2000 BC. This system of medicine was received by Dhanavantari- the

God of medicine fromBrahma.The present knowledge of Ayurveda is by the

texts of Charaka, Sushruta and Vaghbata.HomeopathyHomeopathy was

founded by Samuel Hahnemann, a German physician in 1790. It was based

onthe law of similars. The law of similar was utilized by many cultures like the

Chinese, Greek,Mayan, Native American Indians and Asian Indians. But it was

Hahnemann who developed asystematic medical science out of it. The first

Homeopathic school was founded by his studentsin the US during late 1800s.

Homeopathy gained recognition because it succeeded in treatingdisease

epidemics like cholera, scarlet fever, yellow fever and typhoid.AllopathyIn the

1600s, under the reign of the Emperor Akbar, allopathy found its way in India.

However,after 300 years, recognition of allopathy, as a form of medicine came

under the Indian MedicalDecree in 1960.In between the 50s and the 80s,

healthcare facilities increased substantially, but the number oflicensed

practitioners per 10,000 individuals decreased due to fast population growth.In

the early 70s, vaccinations against diseases like polio and small pox became


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prevalent. By theend of the 70s, small pox was declared to have been eradicated

from the country.The end of 80s saw the industry moving towards diagnosis

before treatment. Medical educationincreased and industry began to grow. This

was the time the incidents of cancer increased andposed problems to the

medical community all over the world and the country. There were 128medical

colleges by the end of the 80s.

care Industry of India 6In the 90s, we struggled with HIV with a

mortality rate of over 80% in India. Late 90s saw a risein health care costs.

During this decade, Indian healthcare grew at a CAGR of 16%. In 1991,India

had 27,400 dispensaries, 22,400 PHCs and 11,200 hospitals. The primary

health centersrelied mostly on trained paramedics. Also, in 1991 there was

uneven distribution of medicalfacilities in the country. Indias most populated

state UP (over 139 million) had 735 hospitalswhereas Kerala (29 million) had

2053 hospitals. In 1992, there were 7,300 hospitals, out ofwhich 4,000 were

owned and managed by the Govt. Another 2,000 owned and managed

bycharitable trusts when the other 1,300 were private sector hospitals and in

turn, very smallfacilities. The major hospitals were a part of the Govt. medical

colleges. Lack of sophisticatedmedical facilities was common in private

hospitals, but the pace of development was very quick.Today, it is the largest

service sector in India.


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f India 7 ObjectiveTo analyze the Healthcare

Industry of India. MotivationHealthcare is one of Indias largest sectors, in

terms of revenue and employment.The private sector accounts for more than

80% of total healthcare in India.Health is a sector which will never get affected

by recession.

Healthcare)Indias market for "wellness" services is estimated at $2.2 billion,

and projected to grow at anannual rate of 30-35 percent, as per FICCI and Ernst

and Young.Indian youth comprises over 34% of the total population. It is

expected to cross over 400 millionby 2015. It forms the core target group for

wellness products and services (other than healthcare). The population in the

urban areas constituted 28% of total population 2001 and is expected toincrease

to 37% in 2025. Urbanization leads to higher awareness and higher availability

ofwellness products. Stress and lifestyle diseases in the urban areas are driving

the growth forproducts and services in the enhancement and curative

segments.Exposure to global beauty and fashion is another driver of wellness

growth. Societys obsessionwith celebrity culture is resulting in peer pressure to

look good.

hcare Industry AnalysisThe

Healthcare industry comprises of both products and services. The products are


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in the form ofdrugs, healthcare equipment & health insurance. Our study

focuses on the service segment of thehealthcare industry. Services in the

healthcare industry can be diagnostic services, small scaleclinics & full fledged

hospitals.The Indian healthcare industry is projected to grow 23 % per annum.

There would be increase innumber of public and private healthcare facilities

accounting for another $6.7 billion. Thisindustry will touch $238.76 bn by

2020.The expenses of this industry comprise 5.25% of the GDP of the country.

In a few years it isprojected to reach 6.2% within the next few years.Growing

population, cheaper treatment costs, increasing lifestyle related health issues,

thrust inmedical tourism, improving health insurance penetration, government

initiatives, increasingdisposable income and focus on PPP are driving factors

for the growth of healthcare sector inIndia.Research says that only 12% of the

industry potential has been tapped in our country which tellsus that the scope

for growth is very large.The healthcare industry shows high opportunity for

economies of scale. Narayana Hrudayalayais the ideal example as to how

economies of scale can be achieved in this industry. Through lowcost measures

and continuous innovation he has made it a big success.There is no target

customer for this industry. The entire human population is their target. Thereare

hospitals at every income level targeting people accordingly. The sad part is

that the specialtyservices are out of reach for a large amount of our population.


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Even basic health services arelacking amongst the rural population. The

government is taking initiatives but for a country likeIndia its not enough.Till

few years ago, healthcare was the responsibility of private practitioners and

doctor ownedhospitals. Large hospitals were run mostly by the government.

corporate hospitals. Today, the rapid corporatization ofthe industry is due to the

movement towards organized healthcare.The entry barrier in this industry

depends on the scale you look at. For a small scale clinic, thebarrier is limited to

expertise and basic equipment whereas for a full fledged hospital,

theinvestments are very high. Expertise and investment are the two main entry

barriers in thisindustry. Exit barrier is high specialized assets and sunk cost.The

factors for the boom of the Healthcare Industry of India are: Strong Indian

Economy : India, the 4th largest economy in terms of Purchasing Power Parity

will overtake Japan and reach the 3rd place by 2020. Opening up of new

opportunities in Healthcare Delivery: Different models are coming up in

Healthcare e.g. PPP model, Diagnostics, Family Clinics etc. More options for

healthcare financing: Health financing is becoming a preferred tool to cover for

most healthcare expenditures. It involves arranging for payment of a health

service that has been arranged under the financing contract. FDI in health

insurance has rose from 26% to 49% which would result in surge of


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international players & even more customized offerings targeting all sections of

society. Saturation of other sectors like retail & IT

thcare Industry of India 11 RegulatorsThere are 4 main regulatory

bodies in this Industry: Government of India Directory of Health and Family

Welfare Indian Council of Medical Research Ministry of Health and Family

Welfare Central Drug Standard Control Organization

Of Company Presence beds Chennai, Madurai, Hyderabad, Aragonda,

Kakindada, Kolkata, Apollo Ahmedabad, Mauritius, Pune, Raichur, Karur,

Karim Nagar, Hospitals 8,500 Mysore, Bhubaneswar, Dhaka, Visakhapatnam,

Bilaspur, Enterprise Ltd Ranipet, Ranchi, Ludhiana, Indore, Bengaluru, Delhi,

Noida Aarvind Eye Puducherry, Madurai, Amethi, Kolkata Theni, Tirunelveli,

3,649 Hospitals Coimbatore, CARE Hyderabad, Vijaywada, Surat,Nagpur,

Pune, Visakhapatnam, 1,400 Hospitals Rajpur, Bhubaneshwar. Fortis Delhi,

Amristar , Mumbai, Bengaluru, Kolkata,Rajpur, Jaipur, 5,044 Healthcare Ltd

Chennai, Kota, , Mohali, Noida Max Hospitals 800 Delhi and NCR Manipal

Udupi, Bengaluru, Manipal, Vijaywada, Kasaragod, Group of +7,000

Visakhapatnam, Attavar, Mangalore, Goa, Tumkur Hospitals Apollo Manipal

Fortis Aarvind eye hospitals CARE hospitals Max hospitals


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Power:Demand is exceeding supply:Indias demographics are changing,

economy is growing, there is a shift in the disease patterns &awareness of

health and fitness is increasing by the day. The demand for healthcare services

hasindicated a CAGR of 16%. India still falls short on various key health

indicators for e.g. ourhospital beds per 1000 stands at 0.7 whereas the world

average is 3.96. There is a big mismatchbetween demand and supply of

healthcare infrastructure and services in India. India needs to addover a million

beds to increase its ratio to 1.7.Medical Tourism:The increase in medical

tourism in India has led to reduction on the dependence of Indianhospitals on

local customers.Suppliers Power:Equipment Players:The competition in the

equipment market is on a high. Consumables and disposable equipmentare

made locally whereas high value equipments are made by international

companies. Thecompanies have expanded their operations to the Indian market

and established assemblycenters. The government is encouraging the growth of

this market. High competition is turningout to be beneficial for the

hospitals.Rivalry among Competitors:Increasing Competition:The drugs and

pharmaceuticals sector has attracted FDI worth $1.66 billion. Hospitals

anddiagnostic centers have received FDI worth $761.18 million. Presently the

market is fragmentedbut the market is changing. The sector is organizing into


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distinct sectors which are one morereason the competition is increasing.

Investments are increasing by the day as the potential in thismarket in India is

very high. Only 20% of the market is tapped.Low Competition from Public

Sector:The share of private sector in India is 78% which is mostly out of reach

for the rural and poorpopulation of the country. An estimate is made that out of

the $25.7 billion required to increasethe number of beds, the government is

contributing only 15-20% of the amount which is a largeopportunity for private

players.

Government Reforms:The government does not have the financial strength for

large scale investments in the healthcaresector, government is encouraging FDI

in the country.Barrier for Foreign Firms:Even though government is

encouraging FDI in the country, there are very few FDI hospitals inIndia. Other

forms of funding are more prevalent. The reason for this can be long

gestationperiod of investments and relatively low rate of return.Threat of

Substitutes:Alternative medicines:Alternative medicine includes Homeopathy,

Ayurveda, Unani etc. They are safer and have lesserside effects as compared to

allopathy. The society is moving towards alternative medicine mainlydue to the

advantage of painless procedures, lesser side effects, organic medicines

etc.Medical Tourism has seen the shift of people towards Ayurveda. The age


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old practice is gainingpopularity all over the world. There has been a rise in the

amount of people who come to India toundergo Ayurvedic treatments. Force

High Moderate LowBuyers PowerSuppliers Power

Internal Rivalry

Entry

Barriers Threat of Substitutes

Services are available at a low cost India has a large supply of qualified doctors

India has a strong presence in good quality and advanced healthcare. We also

have a high success rate in operations. Doctors reputation on the international

front is very high. Medical TourismWeakness Delivering healthcare in India is

costly. We have a limited access to life saving medicines A normal middle class

family cannot afford the specialty healthcareOpportunities Healthcare Industry

has good support from the government. Major Pharmaceutical companies to

choose India as the preferred hub for their global R&D and manufacturing

operations The growth of middle class in the country has resulted in fast

changing lifestyles in urban and to some extent rural centers. This opens a huge

market for lifestyle oriented drugs, which has a very low contribution in the

Indian marketsThreats Primary Health Infrastructure is the responsibility of the

government. Cost of discovering new drugs is very high. Factor High Moderate

LowStrength Weakness Opportunities Threats


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ExpenditurePublic expenditure on health is lower than in other developing

countries as a result, thehealthcare industry is highly dominated by the private

sector. The Government facilitates thefunctioning of the industry and helps

attract foreign investors through investor-friendly policiesand tax incentives.

Government hopes to provide innovative drugs, expand facilities ofhealthcare

insurance, and provide modern medical equipment and better services.

Byimplementing Telemedicine in India, one of the biggest healthcare projects

in the world, it wantsto revolutionize the delivery of healthcare services using

information technology andcommunication.Private InvestmentThe Government

is also encouraging public-private partnership. It is promoting medical

tourism.Indian government is working toward delivering effective and

affordable healthcare services tothe vulnerable sections of population residing

in rural areas through its National Rural HealthMission. The government plays

a critical role in prioritizing the healthcare industry in thedevelopment agenda

of a country.The countrys recognition of product patent for pharmaceuticals is

expected to lure more foreigninvestors into using the outsourcing opportunities

in the country. The initiative taken by thegovernment to set up additional

hospital schemes will create further opportunities for theindustry. Hence,

Indias healthcare industry is anticipated to grow tremendously in the next


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fiveto ten years.Economic EnvironmentGrowing incomesMuch of Indias

healthcare expenditure comes from private patients, primarily the higher-

incomehouseholds. The proportion of households in the low -income group has

declined significantly.Rising incomes are leading to a rise in the rich and

middle-income groups, and they are expectedto form 49 % of total households

in financial year 2010, as compared with 33 % in financial year2004, thus

driving growth. A survey conducted by NCAER, an independent economics

researchagency, suggests that per-capita expenditure on healthcare rise with

higher education levelsSignificant investment opportunities are present for the

private sectorLimited government investment provides significant opportunities

for private healthcare serviceproviders as large investments are required to scale

up the Indias healthcare infrastructure. Our

investment. The government is likely to meet only 15-20 % investment in

hospital beds. Assuming 10-15 % commitment from international donors,there

would be a shortfall of 70 %, which can be funded by private companies.

Presently, themajority of healthcare services in India are provided by the private

sector. Public spending onhealthcare will continue to rise, but chances of large

and sustained increases are low.Socio-cultural EnvironmentIncrease in the life

expectancy and ageing populationIn the domestic market, health spending will


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be sustained by two demographic trends namelyincreased life expectancy and

an ageing population. In India, the proportion of the populationaged 65 years

and over is also on the rise. Although the rate of ageing in India is slower than

thedeveloped countries, the large size of our population makes any increase

significant in terms ofnumbers, and hence also in terms of market potential.A

shift to lifestyle-related diseases will be the driver for higher healthcare

spendsThe shift in disease profiles from infectious diseases to lifestyle-related

diseases is expected toraise expenditures for treatment. On the basis of

demographic trends and disease profiles,lifestyle diseasescardiovascular

diseases, cancer and asthma have become the most importantsegments, and in-

patient expenditure is expected to represent nearly 50% of total

healthcareexpenditure.Higher Population and LiteracyIndia has the 2nd largest

population in the world. It is estimated that by 2050 we will be havingthe

largest population in world. This factor displays a huge opportunity for the

health sector interms of sheer volume. Also there is huge urban shift in India the

private hospitals are mainlylocated in the urban areas and there is rural to urban

shift of 26% which greatly increases the sizeof the target market for the private

players. Rising literacy in India is improving healthawareness, about lifestyle-

related diseaseswhich tend to be more costly to treat thaninfections.Global &

Technological EnvironmentHealth infrastructure in the West.The healthcare


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systems in Europe and the United States are under severe pressure. The

NationalHealth Service (NHS) in the UK has a long list of patients waiting for

over a year for surgery. Inthe US the issues are different. Around 50 million

citizens are uninsured. The shortage ofparamedical professionals such as nurses

has aggravated the situation. Patients from the US arenow regularly coming to

India.

HealthcareIndia offers highly cost-competitive medical treatment and

technological advances in areas suchas cardiology, cosmetic, orthopedic

surgery, eye care, dentistry, and preventive health checkups.India offers world

class cardiac bypass surgery, organ transplants, hip replacements,

cosmetic,dental surgery and vision correction. The associated costs of surgery

are also low. This bringsdown the overall cost of treatment. In India, diagnostic

checkups are comparatively inexpensive.India also has the potential to emerge

as a hub for preventive health screening. At a private clinicin London a health

check-up for men that includes blood tests, lung tests, electrocardiogramtests,

chest X-Rays and abdominal ultrasound costs around 350 British Pounds. In

comparison, acomparable check-up at a clinic operated by Delhi-based

healthcare company Max Healthcarecosts US$ 84. A Magnetic Resonance

Imaging (MRI) scan costs US$ 60 at the Escorts Hospitalin Delhi as compared


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to US$ 700 in New York. Factor High Moderate LowPolitical Economic

Socio-Cultural Technological

analysis concludes on the note that Indian Healthcare Industry is an ideal place

for privateplayers to invest in.Its contribution to GDP is forecasted to increase

to 6.2% within next few years. There is 80%market potential left to

tapped.Sustenance in this industry is not very difficult as the potential is so

large that for a long timenow there will be no internal rivalry. Players survival

will be easy if they approach the rightbusiness model. There are various models

available in the market like PPP, small clinics, superspecialty hospitals etc. The

only criteria for success are the human resource involved. QualifiedHuman

Resource is available in plenty in India. There is an emerging threat from

substitutes likeAyurveda and Homeopathy but in our country these forms of

medicine are always taken as a lastresort. Trends are changing but it will take

time for them to become perfect substitutes.The weakness of this industry is

basically the high delivery cost and hence the unavailability ofgood specialized

healthcare for the people low on the income scale. This is the major factorwhich

counter reacts to the numerous strengths of the industry.The government is

encouraging investment in Healthcare which makes it easier for thecompanies

as the process will be comparatively hassle free. Every force is in favor of


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investors.These healthcare procedures save lives and improve quality of life.

Millions of test, operations,and other healthcare services will happen regardless

of world events, economic, political, orotherwise. When people are sick, theyll

do anything in their power to get better. And it doesntmatter one bit what else

is happening on the planet. Its one of the reasons investors should lovethe

healthcare sector. The population is aging and you dont need a doctorate in

demographics toknow that older people consume more healthcare as they age.If

asked, we would say that investment in this industry is the right thing to do in

the currentscenario. It is a sector not affected by economic cycles, where

demand is much higher thansupply and a necessity for our country.Investing in

this industry will not only give enormous returns to the investor. It will also be

agreat help towards improving the healthcare situation in our country.

Tourism means the process of leaving home and going abroad or a different

place formedical care.Medical tourism has become one of Indias major sources

of income in the past few years. Indiawith its well educated, English speaking

medical staff, diagnostic conveniences, state of the artprivate hospitals and

comparatively low cost healthcare services, has emerged as a destinationfor

medical tourism. The fields in which Indias hospitals excel are cardiology,

jointreplacement, hip replacement, gastroenterology, ophthalmology,


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cosmetology, orthopedics andurology.Medical Tourism is growing at the rate of

30%. It will be a $200 billion industry by 2015.6,00,000 patients travelled to

India last year for medical treatment. Corporate hospitals arecommenting that

the figure is going up every year.A Mckinsey Report says that only 9% of

travelers seek lower costs as their primaryconsideration. 15% seeks faster

medical services , 32% seek better healthcare, and 40% seekadvanced

technology.India offers medical services at 1/10th the cost of an American or

British hospital. A BusinessWorld report says that a heart bypass surgery costs

$144,000 in the United States , $25,000 inCosta Rica, $20,000 in Mexico,

$24,000 in Thailand, $13,500 in Singapore and $8,500 in India.Along with the

cost factor, the quality Indian Hospitals provide is excellent.Hospitals are not

the only ones affected by medical tourism. Hospitality, Pharmaceutical

andMedical equipment industry are greatly affected.Medical tourism Ayurveda

has attracted thousands of tourists to our country. Authentic andmonitored

Ayurvedic programmes are sought to heal, cleanse , relax and rejuvenate. The

mostcommon place for Ayurvedic treatments in India is Kerala. The benefits of

Ayurveda are beingenjoyed by medical tourists coming from countries like the

US, South America, UK, Germany,France, Sweden, Canada, Netherlands &

Europe . Many other wellness seekers are also comingfrom countries like

Oman, Jordan, Egypt, Australia, New Zealand, Saudi Arabia, Kuwait,


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UAE,Malaysia, Singapore, Korea, Japan, etc.Combination of Ayurveda, Yoga

and Meditation is the most common package available tomedical tourists. This

package also takes the tourist through the beauty of the country asAyurveda,

Yoga and Meditation centers are present mostly in the holiday destinations of

thecountry.

an African Sub Saharan Region , 28% of the children below the age of 3 are

malnourishedwhereas in India, 40% are malnourished ! Malnutrition leads to

lack of cognitive, social ,physical development of a child which in turn is lower

productivity for the country once he is anadult.High Infant & Maternal

Mortality Rate:Before the age of 1, 1.72 million children die every year. From

202 per thousand in 1970, it hascome down to 50 per thousand in 2009 but the

rate is slowing down. India has one of the highestMaternal Mortality rates in the

world. It is 1 in every 140 women.The reason is lack of primary health facilities

in the rural parts of India. Lack of care for thewomen during pregnancy is also a

reason for High Infant Mortality.Diseases:Hepatitis, Dengue, Malaria,

Tuberculosis, Pneumonia continue to threaten the country due toincreased

resistance to drugs. India is ranked 3rd among the most HIV affected countries.

Indiansare also at a risk of atherosclerosis and coronary heart


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disease.Inadequacies of Safe Drinking water & Poor sanitation are the causes of

most of the healthcareissues especially on the rural front.

y Developments According to the

Rural Health Survey report 2009, the rural sector has added 15,000 health sub

centers and 28,000 nurses and midwives in the past 5years. Primary Health

Centers has increased by 84% increasing the number to 20,107. From $2.7

billion in 2008, Indian medical technology is expected to reach $14 billion by

2020. Frontier Mediville, the countrys first healthcare SEZ is being set up by

Frontier Lifeline Hospital at Elavoor, near Chennai. The substantial demand for

specialty healthcare is driving players such as Apollo and Fortis to tier II and

tier III cities. Big groups are targeting new segments such as primary care and

diagnostics. The preventive healthcare segment in India is being driven by

demographics, health awareness and increasing capacity to spend.

Organizations like Narayana Hrudalaya and the Mazumdar Shaw Cancer Center

are entering into computerbased bio surveillance projects. These generate data

about diseases and create healthcare databases in rural areas. Medical Tourism

is booming in the country with over 6,00,000 patients travelling to India for

health care. Narayana Hrudayalaya plans to expand its presence in the next 3

yrs to 7 more cities which will take the number of hospitals to 14 An Australian

medical devices company called Cochlear Ltd plans to set up its wholly owned


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subsidiary in India. Cochlear will provide better patient and product support.

$15 million is the investment planned. The drugs and pharmaceuticals sector

has attracted FDI worth $1.70 billion between 2000 to 2010. Hospitals and

Diagnostic centers have received FDI worth $786.14 million. Wockhardt plans

to invest up to $158.32 million and Fortis Healthcare plans to invest $146.81

million. GE Healthcare plans to invest US$ 50 mn to set up more facilities for

developing diagnostic services. Manipal Hospitals plans to invest US$ 45.23

million in the next three years to take its capacity up to 8,000 beds.

February 2011) Sector FDI inflow (US$ million) Hospital and diagnostic

centers 998.11 Medical and surgical appliances 387.52 Drugs and

pharmaceuticals 1,882.30Source of the table: Department of Industrial Policy &

Promotion (DIPP)

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