The Indian Experience: Export of Health Services

EXPORT OF HEALTH SERVICES
The Indian Experience
Dr. Sumit Seth Second Secretary Embassy Of India
Dr. Sumit Seth [email protected]
Embajada de la India http://www.embajadaindia.org/
Over-View
Health Care Market Health Care Trends-Past, Present & Future Trends Favoring Health Service Exports Medical Infrastructure-Demand-Supply Gap Health Services Export-Opportunity Quality Control & Accreditation-New Trends Public Private Partnership Future of Indias Health Care India-Colombia Partnership
The Indian Healthcare Market
India Spends US $ 22.7 Billion On Healthcare * Dr. Sumit Seth [email protected] Embajada de la India http://www.embajadaindia.org/
Sectorwise Distribution
Sector Direct employment
Million, 2000-2001 Per cent, 2000-2001
Revenues/GDP
Healthcare
4.0 5.3 1.0 1.2 1.6 0.8 1.7 0.4 1.8 1.4 0.9 1.7 3.5 3.0
5.2 4.8
Education
Retail banking
Power
Railways
Telecom
Hotels, restaurants
Healthcare is the largest service industry in terms of revenues and the second largest after education in terms of employment
IT
By 2012, the Healthcare sector could account for 7- 8% of GDP and provide direct and indirect employment to 9 million Dr. Sumit Seth [email protected] Embajada de la India http://www.embajadaindia.org/
Healthcare Market (2005 vs 2025)
Healthcare is the third largest growth segment in India * Dr. Sumit Seth [email protected] Embajada de la India http://www.embajadaindia.org/
Investment in India (Estimates)

Healthcare 23-32 Investment needs of the healthcare sector are comparable to other infrastructure sectors
Power
99-131
Telecom
41-53
Roads
25-35
Healthcare in India will grow at 10.8% annually to reach USD 190 billion Dr. Sumit Seth [email protected] Embajada de la India http://www.embajadaindia.org/
Share of the wallet
McKinsey : Healthcare share of the wallet in India will be very close to China. Dr. Sumit Seth [email protected] Embajada de la India http://www.embajadaindia.org/
Healthcare trends in India
Broad trends favoring Health Services Exports
The first is the globalization of business which is characterized by introduction of market forces, freer trade, and widespread deregulation. This means international trade and investment play a much greater role . The second trend is the revolution in information technology which has shrunk geographical boundaries and made the world a global village. The IT revolution has ensured emergence of demanding & aware consumers and globalization has enabled these discerning consumers to access world standards. Both these factors have come together to usher new era for Indian healthcare.
Growth Drivers
India is now the second fastest growing major economy in the world. Third largest economy in the world Indian healthcare has emerged as one of the largest service sectors in India. Healthcare spending in India is expected to rise by 15% per annum. Healthcare spending could contribute 6.1% of GDP in 2012 and employ around 9 million people.
Factors favouring Export of Health Services
Shift from socialized to private providers Booming economy and High literacy rates Shift to lifestyle-related diseases Easier financing Increasing life expectancy Recognition by government priority section
Shift from socialized to private providers
The majority of healthcare services in India are provided by the private sector Private sector in India is one of the largest in the world: 80 percent of all qualified doctors, 75 percent of dispensaries 60 percent of hospitals in India belong to the private sector. Government expenditure on healthcare has been on the decline in relative terms and is currently at 0.9% of the GDP. The average for developing countries as a whole is around 3% of GDP and for high income countries, 5% of GDP.
Booming economy and High literacy rates.
Capacity to Spend
The capacity of the people to pay has increased, When families move from middle income to rich,the highest growth in spending is recorded in healthcare. The top 33 per cent income earners in India accounted for 75 per cent of total private expenditure on healthcare. The proportion of households in the low income group has declined significantly and the Great Indian Middle-class has come of age. Per-capita expenditures on healthcare rise with higher education levels. Households that have higher education levels tend to spend more per illn
Literacy

The Demographics
Middle Income Class in India to grow to 400 to 500 Million by 2015 Dr. Sumit Seth [email protected] Embajada de la India http://www.embajadaindia.org/
Shift to lifestyle-related diseases
The shift in disease profiles from infectious to lifestyle-related diseases is expected to raise expenditures per treatment. Lifestyle-related diseases are typically more expensive to treat than infectious ones. Indias disease profile is expected to follow the same pattern as in developed economies. Diseases - cardiovascular, asthma and cancer have become the most important segments Inpatient spending is expected to rise from 39% to nearly 50% \ The share of infectious diseases is expected to decline from 19 per cent in 2004 to 16 percent in
Easier financing in a capital intensive Industry.
The Indian healthcare industry has gone through the entire cycle of financing
Government funded socialized system 2. Privately funded Mom & Pop shops (small nursing homes) 3. Non Resident Indian & Foreign Investment funded enterprises 4. Financial markets.
1.
Increasing life expectancy
Increase in healthcare spending increases life Expectancy which cyclically further drives increase in Health Care spending
Recognition by government as a priority section.
The government of India has also identified Healthcare as the priority section for focused attention. Measures taken by the government to stimulate market development in the healthcare sector Reduction in Import duty on medical equipment Depreciation Limit on medical equipment increased Customs duty reduced The Government has announced Income tax exemption of the Income Tax for the first five years, to hospitals set up in rural areas US$ 56 million will be earmarked for HIV/AIDS control programme through the use of primary health centers, prevention of drug abuse etc.
Healthcare : Demand & Supply
90 % patients need primary and secondary care Dr. Sumit Seth [email protected] Embajada de la India http://www.embajadaindia.org/
Global Healthcare Infrastructure

Countries
Beds Per 000 population Physicians Per 000 population Nurses Per 000 population
Distribution is skewed towards Urban/ Metro Areas
0.9 India 1.5

1.2
Low income (e.g., sub-Saharan Africa)
1.5
1.0
1.6
Middle income (e.g., China, Brazil)
4.3
1.8
1.9
High income (e.g., US, Western Europe) World average
7.4
1.8
7.5
3.3
1.5
3.3
Total expenditure in India as percentage of GDP : 5.0 (2007) Dr. Sumit Seth [email protected] Embajada de la India http://www.embajadaindia.org/
Gap Analysis
Areas of Opportunity
Health services outsourcing Telemedicine Medical value travel Clinical Trials Miscellaneous
Health Insurance Medical Equipments etc.
Why India?- Hub for Health BPO
Low cost and reliable high bandwidth communications for both voice and data. The internet technology revolution that enables shared processing of transactions and information across locations and time zones. Very large labor cost arbitrage The availability of highly skilled English speaking workforce in India. The lack of governmental interference Strong tax incentives
Need for Outsoucing in US, EU
Spiraling healthcare costs, Unbearable squeeze on margins Process inefficiencies Acute talent shortage Aging population Cost savings to the tune of 20-30 per cent.
The types of services offered
Data capture Reporting of diagnostic tests and Radiology reporting Documentation Data coding, Medical Transcription, Billing and Data migration Commercial Invoicing, Disbursal, Expense Reporting, Procurement, Cash management,
General ledger and Receivables management
Administration Claims processing, Adjudication,Mailroom services and Records management

Human resources Employee assistance, Training and payroll
involved in various functions such as Converting existing data to HIPPA format, Scanning written documents, converting them into an electronic format, and sending them back. BPOs are further involved in claims forms processing for health insurance companies.
Customer care Dispatch and Activation services, Technical support companies are further
Health Care BPO: The Indian Companies
Outsourcing of pathology and laboratory tests

High cost differential in India.
Example
Thyroid profile blood test costs anywhere from US$ 30-50 in the US, while the same can be analyzed by Indian companies for less than US$ 5 per patient. The outsourcing opportunity from UK alone is about US$ 800 million . Case study Metropolis Labs has inked a partnership with a US-based consortium to bid for outsourced pathology work from the National Health Services (NHS) of the UK. Metropolis would be investing approximately US$ 1 million technology upgradation in its Mumbai lab for handling outsourcing jobs.
Tele-Medicine
Telemedicine today has given the capacity to the ordinary doctors to do extraordinary things
Telemedicine: The Promise
Taking modern healthcare to remote areas Majority of diseases not requiring surgery conducive to telemedicine Training of medical personnel across the country Last five years price and complexity of this technology has decreased making T.M economically viable
Benefits of Tele-Medicine
Tele-Radiology
The global demand for radiology services is growing rapidly while the supply of radiologists is not growing in tandem. Such professionals are in short supply the world-over.
By outsourcing Teleradiology to India, overseas hospitals are assured of : Competent & trained professionals, Time zone advantages Skill set availability Patients can be diagnosed and effectively treated round-the clock services. Need to recruit night shift personnel is minimized.
50 per cent of the 6,000-odd hospitals in the US still do not have the technology for tele-radiology, and this represents a huge potential market to be tapped.
The estimated opportunity for India
50 per cent of the 6,000-odd hospitals in the US still with the technology for Tele-radiology
One in every seven radiology positions in the UK is vacant. On the other hand, in India, there is a relative abundance.
Currently---- US$ 3.7 billion 2012----US$ 7.4 Billion Employment for 200,000 people
Dr. Sumit Seth [email protected] Embajada de la India http://www.embajadaindia.org/
India presents First World Treatment at Third World Costs.
The India Advantage
Excellent network of research laboratories
Well-developed base industries
Rich biodiversity
Extensive clinical trials opportunities
Trained manpower and knowledge base
INDIAN HEALTHCARE CAPABILITY

FACT#1: Proven Indian healthcare system
Over 60,000 cardiac surgeries done

per year with out comes at par with international standards
Multi organ transplants like Renal,

Liver, Heart, Bone Marrow Transplants, are successfully performed at one tenth the cost.
Patients from over 55 countries

treated at Indian Hospitals.
Indian Healthcare : The Changing Scenario
Cost Advantage
PROCEDURE
US US Heart Surgery Bone Marrow Transplant Liver Transplant Knee Replacement Cosmetic Surgery 40,000 2,50,000 3,00,000 20,000 20,000 THAILAND THAILAND
COST (US$)
INDIA UK
7,500 ------------8,000 3,500
6,000 26,000 69,000 6,000 2,000
23,000 1,50,000 2,00,000 12,000 10,000
INDIA HAS THE OPPOURTUNITY TO PROVIDE THE BEST OF THE WEST & EASTERN HEALTCARE SYSTEMS
Indian Systems Of Medicine Staging a Comeback
Ayurveda recognized as an
official healthcare system in Hungary.
Indias Gift to the World

Ayurveda Yoga Siddha
Doctors in the west are
increasingly prescribing Indian Systems of Medicine
More than 70% of the American

population prefer a natural approach to health
Americans are said to spend around $25bn on nontraditional medical therapies and products *
Medical tourism: High Reward for government
Medical value travel pushes up quality of Healthcare in India Tourism & Employment will get an extra boost
Win-win situation: as healthcare companies also benefit
Oppurtunities
The Clinical trails market with an estimated expenditure of $ 1.27 Bn in 2012

Profit margins of 20-25% , unfolds one of the most gripping chapters of Indian healthcare.
Strengths & Weakness
KEY ACHIEVEMENTS
India has the 2nd highest number of qualified doctors in the world. Of every six medical doctors in the US, one is Indian
Indias huge population and the prevalence of a wide spectrum of disease conditions offer a wide patient-resource for clinical trials
While clinical trials cost approximately $300 to 350 million in US, they cost only about $25 million in India Investigational New Drug stage costs about $100 to 150 million in US, but costs only around $10 to 15 million in India
Indian companies are offering custom synthesis services at 30-50% cost savings compared to global costs
700,000 science and engineering graduates & 1500 PhDs qualify annually. Over 15,000 scientists
Clinical Trial: A Model
Health Insurance
Private Health Insurance to cover 20% to 25% by 2020 Dr. Sumit Seth [email protected] Embajada de la India http://www.embajadaindia.org/
Quality Control and Accreditation
Patients are the biggest beneficiaries. Accreditation results in high quality of care and patient safety. The patients get services by credential medical staff. Rights of patients are respected and protected. Patient satisfaction is regularly evaluated. Accreditation to a Hospital stimulates continuous improvement. It enables hospital in demonstrating commitment to quality care. It raises community confidence in the services provided by the hospital. It also provides opportunity to healthcare unit to benchmark with the best. The Staff in an accredited hospital are satisfied lot as it provides for continuous learning, good working environment, leadership and above all ownership of clinical processes. It improves overall professional development of Clinicians and Paramedical staff and provides leadership for quality improvement within medicine and nursing. Accreditation provides an objective system of empanelment by insurance and other Third Parties . Accreditation provides access to reliable and certified information on facilities, infrastructure and level of care.
Certification or Assessment of quality
Advantages
Makes the organization quality driven Provides measurable parameters
Removes ambiguity in operations & increases efficiency
Builds patient confidence & credibility
ISO v/s NABH
Limitation of ISO Certification

1. ISO is more documentation oriented and hence a certification does not guarantee level of implementation. 2. ISO is a certification where the examinee pays the examiner to get certified. 3. ISO does not involve the customer
Latest Trend : Health Quality Control
NABH (National accreditation board of hospitals)
National Accreditation Board for Hospitals & Healthcare Providers (NABH) is a constituent board of Quality Council of India, set up to establish and operate accreditation programme for healthcare organizations. The board while being supported by all stakeholders including industry, consumers, government, have full functional autonomy in its operation.
Latest Trend : Health Quality Control
NABH (National accreditation board of hospitals)
It is an institutional member of ISQua It is alsomember of ISQua Accreditation Council. NABH standards for hospitals has been accredited by ISQua. Accreditation system close to JCI
More and more Hospitals are seeking NABH accreditation
Public Private Partnership will enhance healthcare services
Service Contract Model
In Maharashtra, the contracting out of ancillary services is very common particularly in Mumbai. The Bombay Municipal Corporation has been contracting out services such as catering, laundry and hospital maintenance
Management control Model
In India, under the World Bank assisted Andhra Pradesh Urban Slum Health Care Project, the State established the Urban Health Centers and contracted them out to NGOs and/or service providers. Each UHC is assigned a definite slum area, clearly demarcated in terms of boundaries and average population of 15,000-20,000. In addition to drugs and supplies, a grant in aid of Rs. 2.80 lakhs per annum is provided to the NGO to cover operational cost
Chiranjeevi Yojna
Chiranjeevi Yojna has been implemented by the state of Gujarat with the intent of encouraging private medical practitioners to provide maternity health services in remote areas .The scheme aims at improving the institutional delivery rate in Gujarat thereby providing financial protection to poor families.
Case Studies-PPP
Tamil Nadu: Management of Primary Health Centres by Corporate houses Outsourcing of high technology services in major teaching hospitals Gujarat: Management of a PHC by SEWA (non-profit organization) Karnataka: Outsourcing of cleaning, maintenance and waste management of 82 hospitals UttarPradesh: Outsourcing of diagnostic services of teaching hospitals
Huge Growth Potential

US $ IN BILLION at 2000-2001 prices
60.0 51.0 43
8.0 8.0 17.0
19
Government spending Private spending
43.0 43.0 35.0
3.76 15.24
2001
2012 Scenario 1: Baseline increase in private spend 1% GDP
Key Assumption*
Government Spending
2012 2012 Scenario 3: Scenario 2: Baseline with insurance Baseline with insurance and high government in middle class spending 1% GDP 2% GDP
Majority of the spending in Private Sector Dr. Sumit Seth [email protected] Embajada de la India http://www.embajadaindia.org/
HEALTHCARE.THE SUNRISE INDUSTRY
Physicians, Nurses, Medical Technicians and Other Scientific Occupations will Become Growth Industries to Rival the IT Sector within the Next Decade
- India Vision 2020 Report
INDIA-COLOMBIA PARTNERSHIP Scholarship Programmes Participation in Health Fairs Memorandum of Understanding Statergic Alliance between Indian & Colombian Health care Industries Health experts from India can learn from Colombias experience
Thank You
Sources: MINISTRY OF HEALTH& FAMILY WELFARE FICCI EARNST & YOUNG REPORT, PWC REPORT
Dr. Hemant Bakhru,Dr. Kapil Jain,Dr. Ruchi Bhatt

The Indian Experience: Export of Health Services

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EXPORT OF HEALTH SERVICES

The Indian Experience

Dr. Sumit Seth Second Secretary Embassy Of India

Dr. Sumit Seth [email protected]

Embajada de la India http://www.embajadaindia.org/

Dr. Sumit Seth [email protected]

Embajada de la India http://www.embajadaindia.org/

The Indian Healthcare Market

Healthcare Market (2005 vs 2025)

Investment in India (Estimates)

Share of the wallet

Dr. Sumit Seth [email protected]

Embajada de la India http://www.embajadaindia.org/

Healthcare trends in India

Dr. Sumit Seth [email protected]

Embajada de la India http://www.embajadaindia.org/

Broad trends favoring Health Services Exports

Dr. Sumit Seth [email protected]

Embajada de la India http://www.embajadaindia.org/

Dr. Sumit Seth [email protected]

Factors favouring Export of Health Services

Dr. Sumit Seth [email protected]

Embajada de la India http://www.embajadaindia.org/

Shift from socialized to private providers

Dr. Sumit Seth [email protected]

Embajada de la India http://www.embajadaindia.org/

Booming economy and High literacy rates.

Dr. Sumit Seth [email protected]

Embajada de la India http://www.embajadaindia.org/

Shift to lifestyle-related diseases

Dr. Sumit Seth [email protected]

Embajada de la India http://www.embajadaindia.org/

Easier financing in a capital intensive Industry.

Dr. Sumit Seth [email protected]

Embajada de la India http://www.embajadaindia.org/

Increasing life expectancy

Dr. Sumit Seth [email protected]

Embajada de la India http://www.embajadaindia.org/

Recognition by government as a priority section.

Dr. Sumit Seth [email protected]

Embajada de la India http://www.embajadaindia.org/

Dr. Sumit Seth [email protected]

Embajada de la India http://www.embajadaindia.org/

Healthcare : Demand & Supply

Global Healthcare Infrastructure

0.9 India 1.5

Low income (e.g., sub-Saharan Africa)

Middle income (e.g., China, Brazil)

High income (e.g., US, Western Europe) World average

Dr. Sumit Seth [email protected]

Embajada de la India http://www.embajadaindia.org/

Dr. Sumit Seth [email protected]

Embajada de la India http://www.embajadaindia.org/

Dr. Sumit Seth [email protected]

Embajada de la India http://www.embajadaindia.org/

Dr. Sumit Seth [email protected]

Embajada de la India http://www.embajadaindia.org/

Why India?- Hub for Health BPO

Dr. Sumit Seth [email protected]