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Healthcare
For updated information, please visit www.ibef.org
MARCH
2013
22
Contents
 Advantage India
 Market overview and trends
 Growth drivers
 Success stories: Apollo Hospitals, Fortis
 Opportunities
 Useful information
For updated information, please visit www.ibef.org
Healthcare
MARCH
2013
33
Healthcare
For updated information, please visit www.ibef.org ADVANTAGE INDIA
Advantage India
MARCH
2013
Advantage
India
• Healthcare revenue in India is set
to reach USD280 billion by 2020;
expenditure is likely to expand at a
CAGR of 12 per cent over 2012-15
• Rising incomes, greater health
awareness, lifestyle diseases, and
increasing insurance penetration
will contribute to growth
• Investment in healthcare
infrastructure is set to rise with
both ‘hard’ (hospitals) and ‘soft’
(R&D, education) infrastructure
set to benefit
• Medical tourism is emerging as
one of the most lucrative
investment areas in the country
• There is a large pool of well-trained
medical professionals in the country
• Compared to peers in the West and
Asia, India has a comparative
advantage in the cost of offering
high quality medical services
• The government aims to develop
India as a global healthcare hub
• Policy help in the form of reduced
excise and customs duty, and
exemption in service tax
• Initiatives like NRHM to provide
boost to healthcare in rural areas
Market size:
USD280
billion
2020E
Market size:
USD72 billion
2011
Source: KPMG, Hospital Market - India by Research on India Aranca Research
Notes: NRHM - National Rural Health Mission, R&D - Research and Development,
CAGR - Compound Annual Growth Rate, USD - US Dollar; 2020E - Estimate for 2020 (by KPMG)
Strong demand Attractive opportunities
Quality and affordability Policy support
44
Contents
 Advantage India
 Market overview and trends
 Growth drivers
 Success stories: Apollo Hospitals, Fortis
 Opportunities
 Useful information
For updated information, please visit www.ibef.org
Healthcare
MARCH
2013
55For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS
The healthcare market is split into five
segments
Healthcare
Healthcare
Hospitals
Private Hospitals - includes nursing homes, mid-tier, and top-tier
private hospitals
Pharmaceutical
Diagnostics
Medical
Equipment and
Supplies
Medical Insurance
Government Hospitals - includes healthcare centres, district
hospitals and general hospitals
Includes the manufacture, extraction, processing, purification, and
packaging of chemical materials to be used as medications for
humans or animals
Comprises businesses and laboratories that offer analytic or
diagnostic services including body fluid analysis
Includes establishments primarily engaged in manufacturing
medical equipment and supplies, such as surgical, dental,
orthopaedic, ophthalmologic, and laboratory instruments, etc
Includes health insurance and covers an individual’s hospitalisation
expenses and medical reimbursement facility incurred due to
sickness
Source: Hospital Market - India by Research on India, Aranca Research
MARCH
2013
66For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS
Healthcare
→ Healthcare sector expenditure have been rising at an
impressive pace over the past few years; over 2008-11
revenues recorded a CAGR of 12.1 per cent
→ Total industry size is expected to touch USD78 billion
by the calendar year 2012
Expenditure trends over the past few years in USD billion
Source: BMI,Hospital Market - India by Research on India,
OIFC, Aranca Research
Notes: 2012E - Estimates for 2012
Estimated figure for 2012 is from BMI
51.0
53.5
65.0
71.8
78.0
50
55
60
65
70
75
80
2008 2009 2010 2011 2012E
MARCH
2013
Strong growth in healthcare
expenditure over the years
77For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS
Healthcare
→ Of total healthcare revenues in the country -
→ Hospitals account for 71 per cent
→ Pharmaceuticals for 13 per cent, and
→ Medical equipment and supplies for 9 per cent
Market break-up by revenues (2012E)
Source: Hospital Market - India by Research on India,
Aranca Research
Notes: 2012E - Estimates for 2012
71%
13%
9%
4%
3%
Hospitals
Pharmaceutical
Medical Equipment
& Supplies
Medical Insurance
Diagnostics
MARCH
2013
Hospitals account for the major share of
total healthcare revenues in India
88
32%
68%
Public
Private
For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS
Healthcare
→ The private sector has emerged as a vibrant force in
India’s healthcare industry, lending it both national
and international repute
→ Of total healthcare spending in the country in
2011, private sector contributed 68 per cent
→ In fact, the private sector accounts for more
than 65 per cent of primary care centers and
more than 40 per cent of hospitals in the
country
Shares in healthcare spending in India in 2011
Source: Business Monitor Report,
WHO World Health Statistics 2011,
Aranca Research
MARCH
2013
Private sector has a strong presence in
India’s healthcare sector
99
43.1 44.3
53.2
57.9 61.4
88.7
20
30
40
50
60
70
80
90
100
2008 2009 2010 2011 2012E 2015E
For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS
Healthcare
→ Per-capita healthcare expenditure increased at a
CAGR of 10.3 per cent over the period for calendar
year 2008-11 to USD57.9; the figures is set to touch
USD88.7 by 2015
→ This is on account of given rising incomes, easier
access to high quality healthcare facilities, and greater
awareness about personal health and hygiene
→ Greater penetration of health insurance has also
aided the growth in healthcare spending, a trend that
is likely to intensify in the coming decade
Per-capita healthcare expenditure (USD)
Source: BMI Report, Aranca research
Notes: E - Estimates; 2015E - estimates for 2015 (by BMI),
CAGR mentioned in graph is up to 2011
CAGR: 10.3%
MARCH
2013
Per-capita healthcare expenditure has
been growing at a fast pace
1010For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS
Key players in the market
Source: Company websites, Aranca Research
Note: *No of beds include owned, subsidiaries, joint ventures and affiliations
Healthcare
Company
No of
beds*
Presence
Apollo Hospitals
Enterprise Ltd
7,946
Chennai, Madurai, Hyderabad, Karur, Karim Nagar, Mysore, Visakhapatnam,
Bilaspur, Aragonda, Kakinada, Bengaluru, Delhi, Noida, Kolkata, Ahmedabad,
Mauritius, Pune , Raichur, Ranipet, Ranchi, Ludhiana, Indore, Bhubaneswar,
Dhaka
Aravind Eye
Hospitals
3,649 Theni, Tirunelveli, Coimbatore, Puducherry, Madurai, Amethi, Kolkata
CARE Hospitals 1,912
Hyderabad, Vijayawada, Nagpur, Raipur, Bhubaneswar, Surat, Pune,
Visakhapatnam
Fortis Healthcare
Ltd
12,000
Mumbai, Bengaluru, Kolkata, Mohali, Noida, Delhi, Amritsar, Raipur, Jaipur,
Chennai, Kota
Max Hospitals 1,800 Delhi, NCR, Punjab and Uttarakhand
Manipal Group of
Hospitals
4,400
Udupi, Bengaluru, Manipal, Attavar, Mangalore, Goa, Tumkur, Vijaywada,
Kasaragod, Visakhapatnam
MARCH
2013
1111For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS
Shift from communicable
to lifestyle diseases
• With increasing urbanisation and the problems related to modern day living in urban
settings, 50 per cent of spending on in-patient beds currently is for lifestyle-related
diseases; this has resulted in increased demand for specialised care
Expansion to tier-II and
tier-III cities
• There is substantial demand for high-quality and specialty healthcare services in tier-II
and tier-III cities
• In order to encourage the private sector to establish hospitals in these cities,
Government has relaxed the tax burden on these hospitals for the first five years
Management contracts
• Many healthcare players such as Fortis and Manipal Group are entering management
contract to provide an additional revenue stream to hospitals
Source: IRDA, Aranca Research
Note: PPP is Public-Private Partnerships, GOI is Government of India, ICT is Information and Communications Technology, Management
contracts: an arrangement under which operational control of an enterprise is given to a separate entity for a fee
Healthcare
Emergence of
telemedicine
• Telemedicine is a fast-emerging sector in India; a number of major hospitals (Apollo,
AIIMS, Narayana Hrudayalaya) have adopted telemedicine services and have entered
into a number of PPPs
Increasing penetration of
health insurance
• Health insurance is gaining momentum in India; gross healthcare insurance premium
expanding at a CAGR of 39 per cent over FY06-10
• This trend is likely to continue, thereby benefitting the country’s healthcare industry
MARCH
2013
Notable trends in the Indian healthcare
sector
1212
1.9
3.9
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
2011 2014F
USDbillion
For updated information, please visit www.ibef.org
Healthcare
Source: Ministry of Health, RNCOS, KPMG, Aranca Research
Medical tourism market in India
MARCH
2013
→ Presence of world-class hospitals and skilled medical
professionals has strengthened India’s position as a
preferred destination for medical tourism
→ The growth in the sector is underscored by the cost
advantage that India provides to the patients from
developed countries. Notably, India also attracts
medical tourists from developing nations due to lack
of advanced medical facilities in a number of
developing countries
→ Medical tourism market is expected to expand at a
CAGR of 27 per cent to reach USD3.9 billion in 2014
from USD1.9 billion in 2011
→ The major service offerings that attract medical
tourists from European nations and the Middle East to
India include yoga, meditation, ayurveda, allopathy,
and other traditional systems of medicines
Medical tourism: A new growth factor
for India’s healthcare sector
MARKET OVERVIEW AND TRENDS
1313For updated information, please visit www.ibef.org
Healthcare
Source: Ministry of Health, RNCOS, KPMG, Aranca Research
Market size
• The traditional (ayurvedic) medical care market in India was valued at about USD1.4
billion in 2010 and is expected to rise at a CAGR of 20 per cent over 2011-15
Services offered
• Ayurvedic medicines offer traditional Indian health remedies based on natural and
herbal ingredients
• The sector has broadened the offering which now includes services on diet & nutrition,
yoga, herbal medicine, humour therapy and spa
Leading brands and
players
• Vicks VapoRub, Amrutanjan Balm, Zandu Balm, Moov Pain Cream and Halls Lozenges
are among the leading ayurvedic brands in India
• Many big players such as Apollo, VLCC and Manipal Group are also setting up wellness
centres across India with traditional healthcare remedies as the focus of their offerings
Notable trends
• Traditional Knowledge Digital Library is being developed by the traditional medical
sector to prevent companies from claiming patents on such remedies
• There is a growing interest from a number of private equity firms in the traditional
healthcare sector in India
MARCH
2013
Re-emergence of traditional medical
care
MARKET OVERVIEW AND TRENDS
1414
Contents
 Advantage India
 Market overview and trends
 Growth drivers
 Success stories: Apollo Hospitals, Fortis
 Opportunities
 Useful information
For updated information, please visit www.ibef.org
Healthcare
MARCH
2013
1515For updated information, please visit www.ibef.org GROWTH DRIVERS
Sectors benefits from rising income,
lifestyle-related diseases
Healthcare
Strong
government
support
Growing old age
population and
changing pattern of
diseases
Rise in medical
tourism
Policy support
NRHM allocated
USD10 billion for
healthcare
facilities
Increasing investments
Rising FDI
Lucrative M&A
opportunities
Inviting Resulting in
Growing demand
Encouraging policies
for FDI and the
private sector
Reduction in customs
duty and other taxes
on life-saving
equipment
Rising FDI and
private sector
investments
Source: Health Ministry, Aranca Research
Notes: FDI - Foreign Direct Investment, M&A - Mergers & Acquisitions, NRHM - National Rural Health Mission
Foreign players
setting R&D
centres and
hospitals
MARCH
2013
Rising incomes and
affordability
1616For updated information, please visit www.ibef.org
Rising incomes has been a key driver of
demand growth in healthcare
Source: IMF, Aranca Research
Notes: E - estimates; F - forecasts
Healthcare
Trends in per-capita income in India
GROWTH DRIVERS
→ Rising incomes has meant a steady growth in ability
to access healthcare and related services
→ Changing demographics has also been contributing
to greater healthcare spending; this is likely to
continue with the size of the aged population set to
rise from the current 96 million to about 168 million
by 2026
→ Increase in incidence of lifestyle related diseases such
as heart disease, obesity and diabetes have also
contributed to rising healthcare spending by
individuals
→ Greater awareness is increasing demand for
specialised and better quality healthcare facilities
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
0
500
1,000
1,500
2,000
2,500
2001 2004 2007 2010 2013F 2016F
Per Capita income, USD, LHS Annual growth rate
MARCH
2013
1717For updated information, please visit www.ibef.org
Increasing penetration of health
insurance
Source: IRDA, Towers Watson Aranca Research
Note: CAGR - Compounded annual growth rate
Healthcare
Indian health insurance market size (USD million)
GROWTH DRIVERS
→ The health insurance industry expanded at a CAGR of
34.7 per cent between FY06-12; the fast pace of
growth is expected to continue in the coming years as
well
→ The share of population having medical insurance is
likely to rise to 20 per cent by 2015 from the present 2
per cent
→ With increasing number of companies offering
insurance cover to their employees, the healthcare
insurance business in India is set to expand further
462.9
668.5
1,067.7
1,380.3
1,730.2
2,334.3
2,770.8
FY06 FY07 FY08 FY09 FY10 FY11 FY12
MARCH
2013
1818For updated information, please visit www.ibef.org
Growing preference for private
healthcare in India
Healthcare
Share of private sector in total health expenditure (2011)
GROWTH DRIVERS
→ In India, private healthcare accounts for almost 68 per
cent of the country’s total healthcare expenditure
→ Rising incomes have led to greater affordability of
superior quality private sector healthcare facilities
→ Private players have also been constantly innovating in
their efforts to provide better healthcare services to a
wider customer base
→ Some have been trying to combine traditional
healthcare practices with conventional systems
in a bid to offer a new avenue of growth for
their business
Source: WHO, Aranca Research
39.0%
46.4% 53.0%
70.8%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
Russia China Brazil India
MARCH
2013
1919For updated information, please visit www.ibef.org
Private players have been key
contributors to growth in hospitals
Healthcare
22.0
29.9
35.4
45.0
20
25
30
35
40
45
50
2009 2010E 2011E 2012E
Source: WHO Statistical Information System,
Yes Bank, Aranca Research
Note: E - Estimates
Market size of private hospitals (USD billion)
GROWTH DRIVERS
→ The hospital market in India is expected to reach
USD54.7 billion by end - 2012, with the private sector
accounting for 82 per cent
→ Over 2009-12, the market size of private hospitals is
likely to rise at a CAGR of 26.9 per cent
→ Private sector growth has been fuelled by increase in
the number of hospitals in Tier II and Tier III cities
CAGR: 26.9%
MARCH
2013
2020For updated information, please visit www.ibef.org
India has a competitive advantage in
healthcare over peers
Source: Healthcare Outlook “A Quarterly Report By Technopak” Feb 2007, Aranca Research
Healthcare
Opportunities for investments in Healthcare
Diagnostic & Pathology Services
High cost differential in India allows for outsourcing of Pathology and Laboratory tests
by foreign hospital chains
Clinical Trials
India offers both a huge patient pool, favourable regulatory environment and a cost
advantage to conduct clinical trials
Health Insurance
Less than 15 per cent of the Indian population is covered by any kind of health insurance,
providing significant opportunity to a new player in the health insurance market
Telemedicine Provides access to better quality healthcare in rural areas
→ India’s primary comparative advantage lies in its -
→ Large pool of well-trained medical professionals in the country
→ Cost advantages compared to peers in Asia and Western countries
→ Cost of surgery in India is one-tenth of that in the US or Western Europe
→ Consequently, the country offers vast opportunities in R&D as well as medical tourism
GROWTH DRIVERS
MARCH
2013
2121For updated information, please visit www.ibef.org
Strong policy support has been crucial
in developing the sector
Encouraging the private
sector
• The benefit of section 10 (23 G) of the IT-Act has been extended to financial
institutions that provide long-term capital to hospitals with 100 beds or more
• Government is encouraging the PPP model to improve availability of healthcare
services and provide healthcare financing
Encouraging investments
in rural areas
• The benefit of section 80-IB has been extended to new hospitals with 100 beds
or more that are set up in rural areas; such hospitals are entitled to a 100 per
cent deduction on profits for five years
Tax incentives
• Custom duty on life-saving equipment has been reduced to 5 per cent from 25
per cent and exempted from countervailing duty
• Import duty on medical equipment has been reduced to 7.5 per cent
Incentives in the medical
travel industry
• Incentives and tax holidays are being offered to hospitals and dispensaries
providing health travel facilities
Healthcare
GROWTH DRIVERS
Source: Union Budget FY13,Health Ministry, Aranca Research
Union Budget FY13
• Allocation of USD5.6 billion, an increase of 20 per cent from FY12
• Hospitals with at least 100 beds are eligible for 150 per cent deduction for capital
expenditure; other measures include exemption of service tax
MARCH
2013
2222For updated information, please visit www.ibef.org
Supportive policy driving FDI inflows
FDI inflows (Apr 2000 - Sep 2012) into the healthcare sector
Source: Department of Industrial Policy & Promotion,
Aranca Research
Notes: FDI - Foreign direct investment
→ 100 per cent FDI is permitted for all health related
services under the automatic route
→ Demand growth, cost advantages, and policy support
have been instrumental in attracting FDI
→ During April 2000 - September 2012, FDI inflows in
Drug & Pharmaceuticals stood at USD9.7 billion
→ Inflows into hospitals and diagnostic centres, and
medical appliances stood at USD1.44 billion and
USD0.6 billion respectively, during the same period
Healthcare
GROWTH DRIVERS
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
0
2,000
4,000
6,000
8,000
10,000
Drug &
Pharmasuticals
Hospital &
diagnostic
Centres
Medical &
Surgical
Appliances
USDMillion
Cumulative FDI flows (USD million)
Share of total FDI inflows (%) - right axis
MARCH
2013
2323For updated information, please visit www.ibef.org
Healthcare is a key focus area under the
12th Five Year Plan (2012-17)
Shares in 11th Five Year Plan (2007-12) healthcare outlay
Source: Planning commission,
Ministry of health & Family Welfare, Aranca Research
Notes: FDI - Foreign Direct Investment,
NHRM - National Rural Health Mission
→ The Planning Commission has allotted USD83 billion
under the 12th Five Year Plan for healthcare spending;
this is about USD60 billion more compared to the 11th
Plan
→ As a result the share of healthcare in total plan
allocation is set to rise to 2.5 per cent of GDP in
the 12th Plan from 0.9 per cent in the 11th Plan
→ The National Rural Health Mission (NRHM),
introduction of district wise pilots and setting up of
more medical institutions reflect the seriousness of
policy focus on healthcare
Healthcare
GROWTH DRIVERS
89%
3%
4% 4%
NRHM
District hospitals
Human resources
for health
Health insurance
under urban health
mission
MARCH
2013
2424For updated information, please visit www.ibef.org
Sector has been attracting lucrative
M&A deals
Healthcare
Source: Dealtracker Annual Issue 2010, Aranca Research
Notes: M&A - Mergers and Acquisitions
Indian Partner Foreign Players Type of business Stake (%) Year
Piramal Healthcare Decision Resources Group Healthcare data -- 2012
Strides Acrolab Watson Pharma Pharmaceutical -- 2012
DM Healthcare Olympus Capital Hospital -- 2012
India Health Organizational Pvt. Ltd. Aetna Inc Pharma, healthcare and biotech 100.0 2011
Fortis Global Healthcare Lanka Hospitals Corporation Plc Pharma, healthcare and biotech 28.6 2011
→ Pharma, healthcare and biotech have witnessed significant increases in M&A deals in the last four years
→ In FY11, the M&A deal value in healthcare stood at USD4.2 billion, an increase of more than 230 per cent
compared to deals in FY10
→ Established players are extending their global JVs to India
→ Gulf-based healthcare group Dr Moopen is investing over USD200 million for setting up hospitals and eye-
care centres across India
→ Fortis Hospitals plans to invest USD55 million to expand its facilities across India in the near term
GROWTH DRIVERS
MARCH
2013
2525
Contents
 Advantage India
 Market overview and trends
 Growth drivers
 Success stories: Apollo Hospitals, Fortis
 Opportunities
 Useful information
For updated information, please visit www.ibef.org
Healthcare
MARCH
2013
2626
1983 1994 1997 2001 2004 2006 2007 2008 2009 2010 2011 2012
For updated information, please visit www.ibef.org
Apollo Hospitals: Leader in super
speciality healthcare
SUCCESS STORIES: APOLLO HOSPITALS, FORTIS
Healthcare
Source: Research on India, Aranca Research
Note: JV - Joint venture
MARCH
2013
Apollo plans to invest
USD400 million to add
another 2,955 beds by
2015
APHEL is starting a
290 - bed super
specialty hospital in
Bhubaneswar
1983
150 beds
Apollo plans to start a new
Stemcyte and Cord blood
Collection Centre through
a JV with Cadilla
Pharmaceutical, Stemcyte
India Therapeutics Ltd and
Stemcyte USA
2012
7,946 beds
First telemedicine centre
Expansion into child care
Hospital expansion
Joint venture
Enhanced investment
Started its first
children’s hospital
in Chennai, India
with 80 - bed
capacity
Launched Oman’s
first private
telemedicine centre
at its Muscat
hospital in 2007
Plans to expand
in robotic
surgery space
2727
1996 2001 2004 2006 2007 2008 2009 2010 2012
For updated information, please visit www.ibef.org
Fortis: Leading the way through
diversification
SUCCESS STORIES: APOLLO HOSPITALS, FORTIS
Healthcare
Source: Research on India, Aranca Research
MARCH
2013
Plans to add 4300
new beds in next
four years
Completed acquisition
of Wockhardt Hospitals
Ltd adding 10 more
hospitals
Started
Fortis International
Institute of Medical
Sciences, a major
educational institution of
international standards
2012
76 healthcare
facilities and
around 12,000
beds
Current network
Higher profitability
Acquisitions
Diversification
Hospital expansion
The company
reported revenues
of USD620 million
for the year ending
March 2012Network of 29 hospitals
including 12 satellite
with the capacity of
about 3,280 beds
Fortis is coming up
with two multi
specialty hospitals
and a medical
college for 500
students
2828
Contents
 Advantage India
 Market overview and trends
 Growth drivers
 Success stories: Apollo Hospitals, Fortis
 Opportunities
 Useful information
For updated information, please visit www.ibef.org
Healthcare
MARCH
2013
2929For updated information, please visit www.ibef.org OPPORTUNITIES
Notes: Industry estimates
Healthcare
Healthcare infrastructure
• An additional 1.8 million
beds are needed for India
to achieve the target of 2
beds per 1,000 people by
2025
• An additional 700,000
doctors will be required by
2025 to reach a ratio of one
medical doctor per 1,000
individuals
• To achieve these targets an
investment of USD86 billion
will be required
Research
• Contract research is a fast
growing segment in the
Indian health care industry
• Foreign players are
entering into contract
research to reduce their
operational and clinical
cost
• About 60 per cent of the
global clinical trials is
outsourced to developing
countries
Medical tourism
• The Indian medical
tourism industry is poised
to grow at 30 per cent
annually into a USD2 billion
business by end - 2012
• The cost of surgery in India
is nearly one-tenth of the
cost in developed countries
MARCH
2013
Opportunities in healthcare
3030For updated information, please visit www.ibef.org OPPORTUNITIES
Opportunities in health insurance
Healthcare
Health insurance premium collection (USD billion)
Source: Hospital Market India - By research on India,
Aranca Research
• With increasing demand for affordable quality healthcare, the penetration of health insurance is poised to grow
exponentially in the coming years
• Health insurance premium collection is expected to grow at a CAGR of over 28 per cent for the period spanning from
FY09 to FY13
• It is estimated that medical insurance would be a USD3 billion industry by end - 2012
MARCH
2013
→ Less than 15 per cent of the Indian population is
covered through health insurance
→ Increasing healthcare cost and burden of new
diseases along with low government funding is
raising demand for health insurance coverage
→ Many companies are offering health insurance
coverage to employees, driving market penetration of
insurance players
→ The share of population having medical insurance is
likely to rise to 20 per cent by 2015 from the present 2
per cent
0
0.5
1
1.5
2
2.5
3
3.5
2007-08 2008-09 2011-12E
3131
Contents
 Advantage India
 Market overview and trends
 Growth drivers
 Success stories: Apollo Hospitals, Fortis
 Opportunities
 Useful information
For updated information, please visit www.ibef.org
Healthcare
MARCH
2013
3232For updated information, please visit www.ibef.org USEFUL INFORMATION
Industry Associations
Indian Medical Association
I.M.A. House
Indraprastha Marg,
New Delhi - 110 002
Telephones: 91-11-2337 0009, 2337 8819
Fax: 91-11-2337 9470, 2337 9178
Website: www.ima-india.org
E-mail: inmedici@vsnl.com
The Federation of Obstetric and Gynaecological Societies of India
Model Residency, 605,
Bapurao Jagtap Marg,
Jacob Circle, Mahalaxmi East,
Mumbai - 400 011, India
Fax: 23021383
Website: www.fogsi.org
E-mail: inmedici@vsnl.com
Healthcare
MARCH
2013
3333For updated information, please visit www.ibef.org
Glossary
USEFUL INFORMATION
Healthcare
MARCH
2013
→ CAGR : Compound Annual Growth Rate
→ EPA: Externally Aided Projects
→ FDI: Foreign Direct Investment
→ FY: Indian financial year (April to March)
→ So FY10 implies April 2009 to March 2010
→ GOI: Government of India
→ ICT : Information and communications technology
→ IMF: International Monetary Fund
→ INR: Indian Rupee
→ M&A: Mergers and Acquisitions
→ NHRM: National Rural Health Mission
→ PPP: Public Private Partnerships
→ R&D: Research and development
→ USD: US Dollar
→ Conversion rate used: USD1 = INR 48
→ WHO: World Health Statistics
→ Wherever applicable, numbers have been rounded off to
the nearest whole number
34
India Brand Equity Foundation (IBEF) engaged Aranca to
prepare this presentation and the same has been
prepared by Aranca in consultation with IBEF.
All rights reserved. All copyright in this presentation and
related works is solely and exclusively owned by IBEF.
The same may not be reproduced, wholly or in part in
any material form (including photocopying or storing it in
any medium by electronic means and whether or not
transiently or incidentally to some other use of this
presentation), modified or in any manner communicated
to any third party except with the written approval of
IBEF.
This presentation is for information purposes only. While
due care has been taken during the compilation of this
presentation to ensure that the information is accurate to
the best of Aranca and IBEF’s knowledge and belief, the
content is not to be construed in any manner whatsoever
as a substitute for professional advice.
Aranca and IBEF neither recommend nor endorse any
specific products or services that may have been
mentioned in this presentation and nor do they assume
any liability or responsibility for the outcome of decisions
taken as a result of any reliance placed on this
presentation.
Neither Aranca nor IBEF shall be liable for any direct or
indirect damages that may arise due to any act or
omission on the part of the user due to any reliance
placed or guidance taken from any portion of this
presentation.
For updated information, please visit www.ibef.org DISCLAIMER
Healthcare
MARCH
2013
Disclaimer

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Healthcare sector update march 2013 ibef

  • 1. 11 Healthcare For updated information, please visit www.ibef.org MARCH 2013
  • 2. 22 Contents  Advantage India  Market overview and trends  Growth drivers  Success stories: Apollo Hospitals, Fortis  Opportunities  Useful information For updated information, please visit www.ibef.org Healthcare MARCH 2013
  • 3. 33 Healthcare For updated information, please visit www.ibef.org ADVANTAGE INDIA Advantage India MARCH 2013 Advantage India • Healthcare revenue in India is set to reach USD280 billion by 2020; expenditure is likely to expand at a CAGR of 12 per cent over 2012-15 • Rising incomes, greater health awareness, lifestyle diseases, and increasing insurance penetration will contribute to growth • Investment in healthcare infrastructure is set to rise with both ‘hard’ (hospitals) and ‘soft’ (R&D, education) infrastructure set to benefit • Medical tourism is emerging as one of the most lucrative investment areas in the country • There is a large pool of well-trained medical professionals in the country • Compared to peers in the West and Asia, India has a comparative advantage in the cost of offering high quality medical services • The government aims to develop India as a global healthcare hub • Policy help in the form of reduced excise and customs duty, and exemption in service tax • Initiatives like NRHM to provide boost to healthcare in rural areas Market size: USD280 billion 2020E Market size: USD72 billion 2011 Source: KPMG, Hospital Market - India by Research on India Aranca Research Notes: NRHM - National Rural Health Mission, R&D - Research and Development, CAGR - Compound Annual Growth Rate, USD - US Dollar; 2020E - Estimate for 2020 (by KPMG) Strong demand Attractive opportunities Quality and affordability Policy support
  • 4. 44 Contents  Advantage India  Market overview and trends  Growth drivers  Success stories: Apollo Hospitals, Fortis  Opportunities  Useful information For updated information, please visit www.ibef.org Healthcare MARCH 2013
  • 5. 55For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS The healthcare market is split into five segments Healthcare Healthcare Hospitals Private Hospitals - includes nursing homes, mid-tier, and top-tier private hospitals Pharmaceutical Diagnostics Medical Equipment and Supplies Medical Insurance Government Hospitals - includes healthcare centres, district hospitals and general hospitals Includes the manufacture, extraction, processing, purification, and packaging of chemical materials to be used as medications for humans or animals Comprises businesses and laboratories that offer analytic or diagnostic services including body fluid analysis Includes establishments primarily engaged in manufacturing medical equipment and supplies, such as surgical, dental, orthopaedic, ophthalmologic, and laboratory instruments, etc Includes health insurance and covers an individual’s hospitalisation expenses and medical reimbursement facility incurred due to sickness Source: Hospital Market - India by Research on India, Aranca Research MARCH 2013
  • 6. 66For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS Healthcare → Healthcare sector expenditure have been rising at an impressive pace over the past few years; over 2008-11 revenues recorded a CAGR of 12.1 per cent → Total industry size is expected to touch USD78 billion by the calendar year 2012 Expenditure trends over the past few years in USD billion Source: BMI,Hospital Market - India by Research on India, OIFC, Aranca Research Notes: 2012E - Estimates for 2012 Estimated figure for 2012 is from BMI 51.0 53.5 65.0 71.8 78.0 50 55 60 65 70 75 80 2008 2009 2010 2011 2012E MARCH 2013 Strong growth in healthcare expenditure over the years
  • 7. 77For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS Healthcare → Of total healthcare revenues in the country - → Hospitals account for 71 per cent → Pharmaceuticals for 13 per cent, and → Medical equipment and supplies for 9 per cent Market break-up by revenues (2012E) Source: Hospital Market - India by Research on India, Aranca Research Notes: 2012E - Estimates for 2012 71% 13% 9% 4% 3% Hospitals Pharmaceutical Medical Equipment & Supplies Medical Insurance Diagnostics MARCH 2013 Hospitals account for the major share of total healthcare revenues in India
  • 8. 88 32% 68% Public Private For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS Healthcare → The private sector has emerged as a vibrant force in India’s healthcare industry, lending it both national and international repute → Of total healthcare spending in the country in 2011, private sector contributed 68 per cent → In fact, the private sector accounts for more than 65 per cent of primary care centers and more than 40 per cent of hospitals in the country Shares in healthcare spending in India in 2011 Source: Business Monitor Report, WHO World Health Statistics 2011, Aranca Research MARCH 2013 Private sector has a strong presence in India’s healthcare sector
  • 9. 99 43.1 44.3 53.2 57.9 61.4 88.7 20 30 40 50 60 70 80 90 100 2008 2009 2010 2011 2012E 2015E For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS Healthcare → Per-capita healthcare expenditure increased at a CAGR of 10.3 per cent over the period for calendar year 2008-11 to USD57.9; the figures is set to touch USD88.7 by 2015 → This is on account of given rising incomes, easier access to high quality healthcare facilities, and greater awareness about personal health and hygiene → Greater penetration of health insurance has also aided the growth in healthcare spending, a trend that is likely to intensify in the coming decade Per-capita healthcare expenditure (USD) Source: BMI Report, Aranca research Notes: E - Estimates; 2015E - estimates for 2015 (by BMI), CAGR mentioned in graph is up to 2011 CAGR: 10.3% MARCH 2013 Per-capita healthcare expenditure has been growing at a fast pace
  • 10. 1010For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS Key players in the market Source: Company websites, Aranca Research Note: *No of beds include owned, subsidiaries, joint ventures and affiliations Healthcare Company No of beds* Presence Apollo Hospitals Enterprise Ltd 7,946 Chennai, Madurai, Hyderabad, Karur, Karim Nagar, Mysore, Visakhapatnam, Bilaspur, Aragonda, Kakinada, Bengaluru, Delhi, Noida, Kolkata, Ahmedabad, Mauritius, Pune , Raichur, Ranipet, Ranchi, Ludhiana, Indore, Bhubaneswar, Dhaka Aravind Eye Hospitals 3,649 Theni, Tirunelveli, Coimbatore, Puducherry, Madurai, Amethi, Kolkata CARE Hospitals 1,912 Hyderabad, Vijayawada, Nagpur, Raipur, Bhubaneswar, Surat, Pune, Visakhapatnam Fortis Healthcare Ltd 12,000 Mumbai, Bengaluru, Kolkata, Mohali, Noida, Delhi, Amritsar, Raipur, Jaipur, Chennai, Kota Max Hospitals 1,800 Delhi, NCR, Punjab and Uttarakhand Manipal Group of Hospitals 4,400 Udupi, Bengaluru, Manipal, Attavar, Mangalore, Goa, Tumkur, Vijaywada, Kasaragod, Visakhapatnam MARCH 2013
  • 11. 1111For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS Shift from communicable to lifestyle diseases • With increasing urbanisation and the problems related to modern day living in urban settings, 50 per cent of spending on in-patient beds currently is for lifestyle-related diseases; this has resulted in increased demand for specialised care Expansion to tier-II and tier-III cities • There is substantial demand for high-quality and specialty healthcare services in tier-II and tier-III cities • In order to encourage the private sector to establish hospitals in these cities, Government has relaxed the tax burden on these hospitals for the first five years Management contracts • Many healthcare players such as Fortis and Manipal Group are entering management contract to provide an additional revenue stream to hospitals Source: IRDA, Aranca Research Note: PPP is Public-Private Partnerships, GOI is Government of India, ICT is Information and Communications Technology, Management contracts: an arrangement under which operational control of an enterprise is given to a separate entity for a fee Healthcare Emergence of telemedicine • Telemedicine is a fast-emerging sector in India; a number of major hospitals (Apollo, AIIMS, Narayana Hrudayalaya) have adopted telemedicine services and have entered into a number of PPPs Increasing penetration of health insurance • Health insurance is gaining momentum in India; gross healthcare insurance premium expanding at a CAGR of 39 per cent over FY06-10 • This trend is likely to continue, thereby benefitting the country’s healthcare industry MARCH 2013 Notable trends in the Indian healthcare sector
  • 12. 1212 1.9 3.9 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 2011 2014F USDbillion For updated information, please visit www.ibef.org Healthcare Source: Ministry of Health, RNCOS, KPMG, Aranca Research Medical tourism market in India MARCH 2013 → Presence of world-class hospitals and skilled medical professionals has strengthened India’s position as a preferred destination for medical tourism → The growth in the sector is underscored by the cost advantage that India provides to the patients from developed countries. Notably, India also attracts medical tourists from developing nations due to lack of advanced medical facilities in a number of developing countries → Medical tourism market is expected to expand at a CAGR of 27 per cent to reach USD3.9 billion in 2014 from USD1.9 billion in 2011 → The major service offerings that attract medical tourists from European nations and the Middle East to India include yoga, meditation, ayurveda, allopathy, and other traditional systems of medicines Medical tourism: A new growth factor for India’s healthcare sector MARKET OVERVIEW AND TRENDS
  • 13. 1313For updated information, please visit www.ibef.org Healthcare Source: Ministry of Health, RNCOS, KPMG, Aranca Research Market size • The traditional (ayurvedic) medical care market in India was valued at about USD1.4 billion in 2010 and is expected to rise at a CAGR of 20 per cent over 2011-15 Services offered • Ayurvedic medicines offer traditional Indian health remedies based on natural and herbal ingredients • The sector has broadened the offering which now includes services on diet & nutrition, yoga, herbal medicine, humour therapy and spa Leading brands and players • Vicks VapoRub, Amrutanjan Balm, Zandu Balm, Moov Pain Cream and Halls Lozenges are among the leading ayurvedic brands in India • Many big players such as Apollo, VLCC and Manipal Group are also setting up wellness centres across India with traditional healthcare remedies as the focus of their offerings Notable trends • Traditional Knowledge Digital Library is being developed by the traditional medical sector to prevent companies from claiming patents on such remedies • There is a growing interest from a number of private equity firms in the traditional healthcare sector in India MARCH 2013 Re-emergence of traditional medical care MARKET OVERVIEW AND TRENDS
  • 14. 1414 Contents  Advantage India  Market overview and trends  Growth drivers  Success stories: Apollo Hospitals, Fortis  Opportunities  Useful information For updated information, please visit www.ibef.org Healthcare MARCH 2013
  • 15. 1515For updated information, please visit www.ibef.org GROWTH DRIVERS Sectors benefits from rising income, lifestyle-related diseases Healthcare Strong government support Growing old age population and changing pattern of diseases Rise in medical tourism Policy support NRHM allocated USD10 billion for healthcare facilities Increasing investments Rising FDI Lucrative M&A opportunities Inviting Resulting in Growing demand Encouraging policies for FDI and the private sector Reduction in customs duty and other taxes on life-saving equipment Rising FDI and private sector investments Source: Health Ministry, Aranca Research Notes: FDI - Foreign Direct Investment, M&A - Mergers & Acquisitions, NRHM - National Rural Health Mission Foreign players setting R&D centres and hospitals MARCH 2013 Rising incomes and affordability
  • 16. 1616For updated information, please visit www.ibef.org Rising incomes has been a key driver of demand growth in healthcare Source: IMF, Aranca Research Notes: E - estimates; F - forecasts Healthcare Trends in per-capita income in India GROWTH DRIVERS → Rising incomes has meant a steady growth in ability to access healthcare and related services → Changing demographics has also been contributing to greater healthcare spending; this is likely to continue with the size of the aged population set to rise from the current 96 million to about 168 million by 2026 → Increase in incidence of lifestyle related diseases such as heart disease, obesity and diabetes have also contributed to rising healthcare spending by individuals → Greater awareness is increasing demand for specialised and better quality healthcare facilities -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 0 500 1,000 1,500 2,000 2,500 2001 2004 2007 2010 2013F 2016F Per Capita income, USD, LHS Annual growth rate MARCH 2013
  • 17. 1717For updated information, please visit www.ibef.org Increasing penetration of health insurance Source: IRDA, Towers Watson Aranca Research Note: CAGR - Compounded annual growth rate Healthcare Indian health insurance market size (USD million) GROWTH DRIVERS → The health insurance industry expanded at a CAGR of 34.7 per cent between FY06-12; the fast pace of growth is expected to continue in the coming years as well → The share of population having medical insurance is likely to rise to 20 per cent by 2015 from the present 2 per cent → With increasing number of companies offering insurance cover to their employees, the healthcare insurance business in India is set to expand further 462.9 668.5 1,067.7 1,380.3 1,730.2 2,334.3 2,770.8 FY06 FY07 FY08 FY09 FY10 FY11 FY12 MARCH 2013
  • 18. 1818For updated information, please visit www.ibef.org Growing preference for private healthcare in India Healthcare Share of private sector in total health expenditure (2011) GROWTH DRIVERS → In India, private healthcare accounts for almost 68 per cent of the country’s total healthcare expenditure → Rising incomes have led to greater affordability of superior quality private sector healthcare facilities → Private players have also been constantly innovating in their efforts to provide better healthcare services to a wider customer base → Some have been trying to combine traditional healthcare practices with conventional systems in a bid to offer a new avenue of growth for their business Source: WHO, Aranca Research 39.0% 46.4% 53.0% 70.8% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% Russia China Brazil India MARCH 2013
  • 19. 1919For updated information, please visit www.ibef.org Private players have been key contributors to growth in hospitals Healthcare 22.0 29.9 35.4 45.0 20 25 30 35 40 45 50 2009 2010E 2011E 2012E Source: WHO Statistical Information System, Yes Bank, Aranca Research Note: E - Estimates Market size of private hospitals (USD billion) GROWTH DRIVERS → The hospital market in India is expected to reach USD54.7 billion by end - 2012, with the private sector accounting for 82 per cent → Over 2009-12, the market size of private hospitals is likely to rise at a CAGR of 26.9 per cent → Private sector growth has been fuelled by increase in the number of hospitals in Tier II and Tier III cities CAGR: 26.9% MARCH 2013
  • 20. 2020For updated information, please visit www.ibef.org India has a competitive advantage in healthcare over peers Source: Healthcare Outlook “A Quarterly Report By Technopak” Feb 2007, Aranca Research Healthcare Opportunities for investments in Healthcare Diagnostic & Pathology Services High cost differential in India allows for outsourcing of Pathology and Laboratory tests by foreign hospital chains Clinical Trials India offers both a huge patient pool, favourable regulatory environment and a cost advantage to conduct clinical trials Health Insurance Less than 15 per cent of the Indian population is covered by any kind of health insurance, providing significant opportunity to a new player in the health insurance market Telemedicine Provides access to better quality healthcare in rural areas → India’s primary comparative advantage lies in its - → Large pool of well-trained medical professionals in the country → Cost advantages compared to peers in Asia and Western countries → Cost of surgery in India is one-tenth of that in the US or Western Europe → Consequently, the country offers vast opportunities in R&D as well as medical tourism GROWTH DRIVERS MARCH 2013
  • 21. 2121For updated information, please visit www.ibef.org Strong policy support has been crucial in developing the sector Encouraging the private sector • The benefit of section 10 (23 G) of the IT-Act has been extended to financial institutions that provide long-term capital to hospitals with 100 beds or more • Government is encouraging the PPP model to improve availability of healthcare services and provide healthcare financing Encouraging investments in rural areas • The benefit of section 80-IB has been extended to new hospitals with 100 beds or more that are set up in rural areas; such hospitals are entitled to a 100 per cent deduction on profits for five years Tax incentives • Custom duty on life-saving equipment has been reduced to 5 per cent from 25 per cent and exempted from countervailing duty • Import duty on medical equipment has been reduced to 7.5 per cent Incentives in the medical travel industry • Incentives and tax holidays are being offered to hospitals and dispensaries providing health travel facilities Healthcare GROWTH DRIVERS Source: Union Budget FY13,Health Ministry, Aranca Research Union Budget FY13 • Allocation of USD5.6 billion, an increase of 20 per cent from FY12 • Hospitals with at least 100 beds are eligible for 150 per cent deduction for capital expenditure; other measures include exemption of service tax MARCH 2013
  • 22. 2222For updated information, please visit www.ibef.org Supportive policy driving FDI inflows FDI inflows (Apr 2000 - Sep 2012) into the healthcare sector Source: Department of Industrial Policy & Promotion, Aranca Research Notes: FDI - Foreign direct investment → 100 per cent FDI is permitted for all health related services under the automatic route → Demand growth, cost advantages, and policy support have been instrumental in attracting FDI → During April 2000 - September 2012, FDI inflows in Drug & Pharmaceuticals stood at USD9.7 billion → Inflows into hospitals and diagnostic centres, and medical appliances stood at USD1.44 billion and USD0.6 billion respectively, during the same period Healthcare GROWTH DRIVERS -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 0 2,000 4,000 6,000 8,000 10,000 Drug & Pharmasuticals Hospital & diagnostic Centres Medical & Surgical Appliances USDMillion Cumulative FDI flows (USD million) Share of total FDI inflows (%) - right axis MARCH 2013
  • 23. 2323For updated information, please visit www.ibef.org Healthcare is a key focus area under the 12th Five Year Plan (2012-17) Shares in 11th Five Year Plan (2007-12) healthcare outlay Source: Planning commission, Ministry of health & Family Welfare, Aranca Research Notes: FDI - Foreign Direct Investment, NHRM - National Rural Health Mission → The Planning Commission has allotted USD83 billion under the 12th Five Year Plan for healthcare spending; this is about USD60 billion more compared to the 11th Plan → As a result the share of healthcare in total plan allocation is set to rise to 2.5 per cent of GDP in the 12th Plan from 0.9 per cent in the 11th Plan → The National Rural Health Mission (NRHM), introduction of district wise pilots and setting up of more medical institutions reflect the seriousness of policy focus on healthcare Healthcare GROWTH DRIVERS 89% 3% 4% 4% NRHM District hospitals Human resources for health Health insurance under urban health mission MARCH 2013
  • 24. 2424For updated information, please visit www.ibef.org Sector has been attracting lucrative M&A deals Healthcare Source: Dealtracker Annual Issue 2010, Aranca Research Notes: M&A - Mergers and Acquisitions Indian Partner Foreign Players Type of business Stake (%) Year Piramal Healthcare Decision Resources Group Healthcare data -- 2012 Strides Acrolab Watson Pharma Pharmaceutical -- 2012 DM Healthcare Olympus Capital Hospital -- 2012 India Health Organizational Pvt. Ltd. Aetna Inc Pharma, healthcare and biotech 100.0 2011 Fortis Global Healthcare Lanka Hospitals Corporation Plc Pharma, healthcare and biotech 28.6 2011 → Pharma, healthcare and biotech have witnessed significant increases in M&A deals in the last four years → In FY11, the M&A deal value in healthcare stood at USD4.2 billion, an increase of more than 230 per cent compared to deals in FY10 → Established players are extending their global JVs to India → Gulf-based healthcare group Dr Moopen is investing over USD200 million for setting up hospitals and eye- care centres across India → Fortis Hospitals plans to invest USD55 million to expand its facilities across India in the near term GROWTH DRIVERS MARCH 2013
  • 25. 2525 Contents  Advantage India  Market overview and trends  Growth drivers  Success stories: Apollo Hospitals, Fortis  Opportunities  Useful information For updated information, please visit www.ibef.org Healthcare MARCH 2013
  • 26. 2626 1983 1994 1997 2001 2004 2006 2007 2008 2009 2010 2011 2012 For updated information, please visit www.ibef.org Apollo Hospitals: Leader in super speciality healthcare SUCCESS STORIES: APOLLO HOSPITALS, FORTIS Healthcare Source: Research on India, Aranca Research Note: JV - Joint venture MARCH 2013 Apollo plans to invest USD400 million to add another 2,955 beds by 2015 APHEL is starting a 290 - bed super specialty hospital in Bhubaneswar 1983 150 beds Apollo plans to start a new Stemcyte and Cord blood Collection Centre through a JV with Cadilla Pharmaceutical, Stemcyte India Therapeutics Ltd and Stemcyte USA 2012 7,946 beds First telemedicine centre Expansion into child care Hospital expansion Joint venture Enhanced investment Started its first children’s hospital in Chennai, India with 80 - bed capacity Launched Oman’s first private telemedicine centre at its Muscat hospital in 2007 Plans to expand in robotic surgery space
  • 27. 2727 1996 2001 2004 2006 2007 2008 2009 2010 2012 For updated information, please visit www.ibef.org Fortis: Leading the way through diversification SUCCESS STORIES: APOLLO HOSPITALS, FORTIS Healthcare Source: Research on India, Aranca Research MARCH 2013 Plans to add 4300 new beds in next four years Completed acquisition of Wockhardt Hospitals Ltd adding 10 more hospitals Started Fortis International Institute of Medical Sciences, a major educational institution of international standards 2012 76 healthcare facilities and around 12,000 beds Current network Higher profitability Acquisitions Diversification Hospital expansion The company reported revenues of USD620 million for the year ending March 2012Network of 29 hospitals including 12 satellite with the capacity of about 3,280 beds Fortis is coming up with two multi specialty hospitals and a medical college for 500 students
  • 28. 2828 Contents  Advantage India  Market overview and trends  Growth drivers  Success stories: Apollo Hospitals, Fortis  Opportunities  Useful information For updated information, please visit www.ibef.org Healthcare MARCH 2013
  • 29. 2929For updated information, please visit www.ibef.org OPPORTUNITIES Notes: Industry estimates Healthcare Healthcare infrastructure • An additional 1.8 million beds are needed for India to achieve the target of 2 beds per 1,000 people by 2025 • An additional 700,000 doctors will be required by 2025 to reach a ratio of one medical doctor per 1,000 individuals • To achieve these targets an investment of USD86 billion will be required Research • Contract research is a fast growing segment in the Indian health care industry • Foreign players are entering into contract research to reduce their operational and clinical cost • About 60 per cent of the global clinical trials is outsourced to developing countries Medical tourism • The Indian medical tourism industry is poised to grow at 30 per cent annually into a USD2 billion business by end - 2012 • The cost of surgery in India is nearly one-tenth of the cost in developed countries MARCH 2013 Opportunities in healthcare
  • 30. 3030For updated information, please visit www.ibef.org OPPORTUNITIES Opportunities in health insurance Healthcare Health insurance premium collection (USD billion) Source: Hospital Market India - By research on India, Aranca Research • With increasing demand for affordable quality healthcare, the penetration of health insurance is poised to grow exponentially in the coming years • Health insurance premium collection is expected to grow at a CAGR of over 28 per cent for the period spanning from FY09 to FY13 • It is estimated that medical insurance would be a USD3 billion industry by end - 2012 MARCH 2013 → Less than 15 per cent of the Indian population is covered through health insurance → Increasing healthcare cost and burden of new diseases along with low government funding is raising demand for health insurance coverage → Many companies are offering health insurance coverage to employees, driving market penetration of insurance players → The share of population having medical insurance is likely to rise to 20 per cent by 2015 from the present 2 per cent 0 0.5 1 1.5 2 2.5 3 3.5 2007-08 2008-09 2011-12E
  • 31. 3131 Contents  Advantage India  Market overview and trends  Growth drivers  Success stories: Apollo Hospitals, Fortis  Opportunities  Useful information For updated information, please visit www.ibef.org Healthcare MARCH 2013
  • 32. 3232For updated information, please visit www.ibef.org USEFUL INFORMATION Industry Associations Indian Medical Association I.M.A. House Indraprastha Marg, New Delhi - 110 002 Telephones: 91-11-2337 0009, 2337 8819 Fax: 91-11-2337 9470, 2337 9178 Website: www.ima-india.org E-mail: inmedici@vsnl.com The Federation of Obstetric and Gynaecological Societies of India Model Residency, 605, Bapurao Jagtap Marg, Jacob Circle, Mahalaxmi East, Mumbai - 400 011, India Fax: 23021383 Website: www.fogsi.org E-mail: inmedici@vsnl.com Healthcare MARCH 2013
  • 33. 3333For updated information, please visit www.ibef.org Glossary USEFUL INFORMATION Healthcare MARCH 2013 → CAGR : Compound Annual Growth Rate → EPA: Externally Aided Projects → FDI: Foreign Direct Investment → FY: Indian financial year (April to March) → So FY10 implies April 2009 to March 2010 → GOI: Government of India → ICT : Information and communications technology → IMF: International Monetary Fund → INR: Indian Rupee → M&A: Mergers and Acquisitions → NHRM: National Rural Health Mission → PPP: Public Private Partnerships → R&D: Research and development → USD: US Dollar → Conversion rate used: USD1 = INR 48 → WHO: World Health Statistics → Wherever applicable, numbers have been rounded off to the nearest whole number
  • 34. 34 India Brand Equity Foundation (IBEF) engaged Aranca to prepare this presentation and the same has been prepared by Aranca in consultation with IBEF. All rights reserved. All copyright in this presentation and related works is solely and exclusively owned by IBEF. The same may not be reproduced, wholly or in part in any material form (including photocopying or storing it in any medium by electronic means and whether or not transiently or incidentally to some other use of this presentation), modified or in any manner communicated to any third party except with the written approval of IBEF. This presentation is for information purposes only. While due care has been taken during the compilation of this presentation to ensure that the information is accurate to the best of Aranca and IBEF’s knowledge and belief, the content is not to be construed in any manner whatsoever as a substitute for professional advice. Aranca and IBEF neither recommend nor endorse any specific products or services that may have been mentioned in this presentation and nor do they assume any liability or responsibility for the outcome of decisions taken as a result of any reliance placed on this presentation. Neither Aranca nor IBEF shall be liable for any direct or indirect damages that may arise due to any act or omission on the part of the user due to any reliance placed or guidance taken from any portion of this presentation. For updated information, please visit www.ibef.org DISCLAIMER Healthcare MARCH 2013 Disclaimer