Indmedica - India's Premier Medical Portal - Cyber Lectures

 

Healthcare Industry Witnessing Major Transition Ever

Sachin Chaudhary

Page 1

Topics

Industry analysts are expecting some important trends to arrive, which would change the face of healthcare delivery in times to come. The sunrise industry has witnessed foray of corporate players, international accreditations, reverse brain drain, world-class infrastructure and the era of responsive care in the last one decade. Common man has seen paradigm shift in various service sectors like aviation, hospitality, entertainment and telecom. This has brought in international standards, price war, quality services, and various options for individuals. In healthcare, insurance companies, medical tourism, preventive healthcare, BPOs, telemedicine, health information technology, consulting services, laboratory and diagnostic services, and medical devices industry, all these should expect good business opportunities in the near future.

Demand And Supply

As per the CII-Mckinsey Industry Analysis Report, demand is expected to outstrip supply over the next decade. Almost 80,000 additional hospital beds will be required every year for the next three to four years to adequately meet growing healthcare demands. The government, traditionally the largest healthcare provider, is now under pressure to meet evolving and rising demands for healthcare services across the country.

The healthcare industry’s size is estimated at USD 20 billion and can increase to USD 60 billion by 2010. The report predicts it will grow at a rate of 13 per cent annually, which will enable healthcare providers to secure a return of 15-20 per cent on their capital employed. This demand-supply interaction has created conditions for increasing private/voluntary sector participation in healthcare delivery.

Key Business Drivers

Gone are the days when healthcare used to be perceived as quasi-social responsibility, it is a profit-making business venture in itself now. Consumer demands, consumer awareness, thrust for quality and value for money, changing disease pattern, changing socio-economic profile and lifestyle patterns, demand for quality healthcare, corporatisation, increasing penetration of private health insurance, foreign alliances, IT in healthcare are few business drivers that have resulted in restructuring of Indian healthcare.

Early Transition Effects

Customer outlook:* Indian economy is growing at a rate of seven per cent, which has resulted in more cash flow in the hands of Indian customers. Increasing purchasing power and available options of delivery have made patients very impatient. These days, impatient patient demands augmented services besides just getting quality core product/services.

Payment model: ‘Cash and Carry’ model of payment is slowly taking a backseat and ‘third party payment’ is gaining importance. Third party payment facilitates cashless transaction by giving credit facility. Cashless facility for the insured person means he can just walk into a network provider of his preference for the cashless hospitalisation.

Standardisation of pricing: The fragmented nature of healthcare sector in India makes pricing very critical, since it varies widely depending on the provider and the location. As per classification of city and grading of hospitals, insurance companies are classifying hospital packages into standardised slabs. TPAs are pursuing this scheme of standardisation, but providers have not welcomed this initiative of IRDA or insurance companies.

From in-patient care to daycare: Growing health consciousness among middle and high-income families in India, together with technology growth in healthcare has shifted focus from inpatient treatment to outpatient/daycare treatment.

Accreditation and use of IT: The accreditation and use of IT is slowly but steadily coming to an age. Factors like increasing competition, entry of private insurance, and expanding clientele market to the tertiary zone of international boundaries are driving these trends. Most of the big hospital chains have already identified these needs and are in the process of automating their services. Indian flagship hospitals like Wockhardt and Apollo won accreditation from Joint Commission International in the last few months and many more are in queue.


Healthcare Consultant with Infosys Technologies, Pune

1 2 Next page Back