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“India Healthcare Opportunity” An Overview India Habitat Center 8 th July 2011

“India Healthcare Opportunity” An Overview India Habitat Center 8 th July 2011. Contents. Section 3. Section 1. Section 2. Some Opportunities . Q & A . Indian Healthcare Landscape . Section 1. Indian Healthcare Landscape. Healthcare Delivery System Evolution ….

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“India Healthcare Opportunity” An Overview India Habitat Center 8 th July 2011

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  1. “India Healthcare Opportunity” An Overview India Habitat Center 8th July 2011

  2. Contents Section 3 Section 1 Section 2 Some Opportunities Q & A Indian Healthcare Landscape

  3. Section 1 Indian Healthcare Landscape

  4. Healthcare Delivery System Evolution ….. 2010 Onwards In Vogue Daycare Surgery Centers Integrated Health Systems Upgraded Secondary Care Chains Medicities Private Nursing Homes Mix of Super specialty and Multispecialty Chains Large Super specialty Private hospitals Charitable Trust/ Government/ Clinics Till 2007 Till 2000 Till 1980s

  5. Indian Healthcare – Driven By Private Expenditure Healthcare Expenditure as % of GDP Per Capita Healthcare Expenditure (in $) United States Australia South Africa Russia Brazil China India US$ 3 Trillion 15.2% US$ 60 Billion: 4.2% Public Expenditure Private Expenditure At about US$ 122 per capita, India’s spending on healthcare is amongst the lowest in the world

  6. Healthcare Delivery Landscape

  7. Indian Consumer Spending On Healthcare The share of average household spend on Healthcare in India is expected to increase from 7% to 10%by 2020 2020 $2500b 2015 $1400b 2010 $800b Source: National Accounts Statistics, Technopak Analysis

  8. Growth Drivers For Healthcare Delivery Growth Factors Others: Regulatory Impact, Increased Awareness, Quality up gradation, corporatization, etc. Source: Technopak Analysis

  9. Indian Healthcare Market Today Breakup of Indian Healthcare Market Indian Healthcare Market Billion US$ CAGR 15% Source: National Health Accounts, Technopak Analysis

  10. Organized Vs Unorganized Share Organized Vs Unorganized Healthcare Organized Healthcare Projected Growth US$ Billion CAGR 25% • Healthcare delivery in India is still very much concentrated in the unorganized sector • Organized healthcare constitute a very miniscule share in the overall healthcare delivery market but is expected to grow with the growth rate of 25%. Source: Technopak Analysis

  11. Key Imperatives

  12. Indian Healthcare Industry – Weaknesses Very limited focus so far on accessibility & affordability Absence of integrated pan India (or even pan region) players Providers of quality healthcare largely focused on the top 10-12 cities, though some recent efforts to go to smaller cities now Few, if any, of the players adequately integrate both the financing and delivery of care Technology usage very limited Focus on reactive rather than preventive care

  13. Indian Healthcare Industry – Weaknesses • Generally flawed business models for many: • Very high capital cost • Multiple specialties under one roof without achieving a critical mass in any single one • Seemingly random expansion • Lack of integration between primary, secondary, and tertiary facilities • Poor / wrong city / site selection • Very high operating costs due to systemic design flaws

  14. How Accessible Is Healthcare Today? It is estimated that more than 46%of the patients travel over 100 Km from small towns to these facilities to seek proper medical care*. Specialty Distance Traveled (Kms) * Source: Technopak’s India Healthcare Trends ’08

  15. Accessibility Very Poor Outside The Cities Maximum concentration of healthcare facilities Presence of mostly unorganized players providing sub optimal care at high cost to patients Rural Few basic healthcare facilities, forcing travel for millions to urban centers for most situations.

  16. Absence Of Financing Mechanism Over 70% of the expenditure on healthcare is still being met by consumers “out of pocket”. Less than 15% of India’s population today has some form of health insurance cover

  17. Humungous Infrastructure Requirements Source: WHO Stats ,Technopak’s Analysis

  18. Key Challenges… • High cost impacting viability • Non availability in dense population pockets • Healthcare REITS 1 Real Estate • Medical, Nursing and Allied • Professional Managers • Inadequate skill sets Workforce 2 Quality Accreditation Clinical Outcomes • Inadequate focus • NABH/ NABL • Protocols 3 Data for Comparables • No Central Repository • Non Disclosure of Sentinel Events 4 • Lack of Enforcement • Antiquated legislation Regulatory Compliances 5

  19. Key Challenges Challenges Mitigation Mechanism • Distance from home • Unavailability at convenient times • Non Metro towns and rural hospital network • Telemedicine • Mobile healthcare Accessibility • Miniscule insurancecoverage • High treatment cost • Micro Insurance • Risk sharing options • Health savings account Affordability • No standard protocols • Lack of data repository Accountability • Quality • Transparency • Governance

  20. Summary : Section 1 • Private sector to remain the engine of growth for Healthcare delivery in India • Providing accessible, affordable, and accountable healthcare services meets both business and social imperatives • Very favorable regulatory environment • Government’s role shifting from “Provider” to “Payer” • Non Top-12 Metro cities to see much more robust growth • Innovative low-cost, high-impact, high return-on-investment business models can be created

  21. Section 2 Opportunities Galore Across The Entire Ecosystem

  22. Opportunity Segments In Healthcare Delivery Segmentation of Private Healthcare Delivery Market $ 32 Bn • Primary Care • Neighborhood clinics • Dental Clinics, Dialysis centers, eye-centers etc. • Diagnostics - Labs/Radio diagnostics $ 19 Billion • Secondary Care / Upgraded secondary care • 100-150 bed hospitals • Mother & Child / other specialty Hospitals • Alternative Medicine/Wellness hospitals • Day Care Centers $ 10 Billion • Tertiary Care • Academic Medical Centres • Single specialty Hospitals • Multi Super-specialty Hospitals • Medical Cities $ 3 Billion Source: Technopak Analysis

  23. Opportunity Segments In The Eco-System • Just about everywhere… some illustrative ones include: • Facilities management: • Bio-medical waste management • Housekeeping • Food services • IT solutions and IT enabled services • Supply side: • Medical devices and consumables • Other consumables • Furniture • Man-power solutions • Ambulance services

  24. The Way Ahead For Entrepreneurs … Healthcare sector is undergoing major transformation – invest time and effort and perhaps some money in studying and understanding India will need “India” specific solutions – hence resist the temptation of getting “inspiration” from the USA, EU, or elsewhere If interested in delivery side, look at niches or look beyond the top 15-20 cities of India, and imbibe the mantra “affordable, accessible, and accountable” If interested in the supply side, invest first in understanding current and emerging needs, and then try to create fundamentally new products / services or fundamentally new price / delivery paradigms

  25. Section 3 Q & A

  26. Thank You !

  27. For Further Dialogue, Please Contact: Arvind Singhal / Dr. Sameer KhanChairman / Sr. Vice President & Head (Healthcare Division) Technopak Advisors4th Floor, Tower 8-A, DLF Cyber City Phase IIGurgaon (National Capital Region Of Delhi)IndiaTel: +91 124 4541111 www.technopak.com Arvind.singhal@technopak.com sameer.khan@technopak.com

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