A report highlights that 20% of all healthcare spend by patients is on transportation. This could be due to inadequate access to local staff and facilities. Dr. Ruchi has some great posts on using mobiles to provide healthcare services to the masses in India. The same report also points out 15% being spent on miscellaneous. The inefficiency in the system with 35% of the money being consumed in unrelated costs combined with the shortage of staff and facilities drives up demand and costs.
Technology combined with some traditional India ingenuity can can provide a way to address both. Telemedicine is one example of reducing overheads while expanding the reach of the scare resources.
One other idea could be in the preventive medicine and disease management area, by creating a McDonald’s for healthcare. These centers can offer fixed menu of services including basic diagnostics and disease management. The centers can be staffed by semi-trained medical professionals or nurses who follow a fixed process. In addition to this, a tele-medicine setup can provide enhanced consultations and diagnosis. Combining this with a micro-insurance product for pregnancy, neo-natal care or diabetes can potentially be a strong business model.
There are a lot of reports about the healthcare industry in India, the growth potential and opportunities like here by PWC (circa 2007), the US Commercial Service, the India Brand Equity Foundation (IBEF).
All of them highlight:
- India spend s~6% of it’s GDP on healthcare
- On a per capita basis this is miniscule to meet the needs of the 1.1 billion people
- Majority of spend is private $$ by middle class and rich citizens
- Heath insurance penetration is very low
- Huge gap in the number of trained staff and facilities required for the large population
Over the last decade or so, there have been some phenomenal improvements in the healthcare diagnostics and delivery with companies like Apollo, Fortis and Manipal opening up great centers across the major urban center. The biggest catch is these companies are still targeting the less 10% of the population that can afford to spend on healthcare or have insurance coverage
With this situation, if we look at the opportunities in the sector is really in addressing the needs of the non urban and low income groups. These groups currently rely only on the government for the healthcare services. Unfortunately the government alone cannot address their needs.
For example in the state of Karnataka there is an acuate shortage of staff and facilities as seen in the table below. The state needs 254 Radiographers and has only 30.
||Short Fall %
|Paediatricians at CHCs
|Health Worker (Male)
|Health Assistant (Male)
|Total specialists at CHCs
|Health Assistant (Female)
|Multipurpose worker (Female)
|Physicians at CHCs
|Community Health Centre
Source: Ministry of Health, Government of India 2008-09 report
Looking at this one obvious opportunities is:
Micro health insurance: Current government schemes which utilize a re-embursement mechanism have failed as affordability is still an issue for the group. We need schemes that provide cash less insurance coverage. One good case of this a company called ARC – Accident relief Care for short. ARC provides cash group accident cover for the low income groups for as little Rs 2-3 / day. Their target market is auto drivers, waiters who live from day to day cash collections and a single day’s lost due to any accident can lead to dire consequences for them and their families. Extending the ARC concept to other markets and offering new products is a great opportunity.