Everybody acknowledges that the healthcare industry in India has a lot going for it. Patients from across the world are looking at state of the art Indian hospitals for cheap and quality care. The doctors and the nurses are considered to be one of the best in the world, their is abundant supply of good quality medical talent, health insurance is penetrating deeper and the market is predicted to grow substantially.
A quick look at the numbers tell the story. Healthcare is presently a USD 35 bn industry and is expected to grow to USD 75 bn by 2012. A Confederation of Indian Industry report says that investments worth USD 50bn are required annually for the next 20 years to meet the growing demand. India will need 3.1 mn additional beds (presently 1.1 mn) by 2018
While the sector has seen substantial investments in the last year, they are but a drop in the ocean. The healthcare sector has not really seen the kind of action that one would expect considering the opportunities.
The country has just a handful of players who have any significant presence in the market. These include the Apollo Hospitals Group, Fortis Healthcare, Max Healthcare, Wockhardt Hospitals, Manipal Hospitals and Columbia Asia. Out of these only Apollo and Fortis has a significant pan India presence. Wockhardt is largely present in the west and south India, Max is located only in Delhi and the National Capital region and Manipal Hiospitals has presence only in South India.The expansion plans of some of these are in the ‘go slow’ mode. Manipal’s hospital in Delhi, which was earlier slated to commence operations is no where near completion, Max’ hospitals expansion in East and South Delhi are yet to commence operations. New entrants including Reliance are still testing the waters. Sahara group has recently commenced operations at their first hospital in Lucknow, while the plans for many more are still pretty much on paper. Artemis Health Sciences, which had announced ambitious plans for 10 hospitals by 2015 is still struggling with its first venture in Gurgaon and plans for the other hospitals are on hold. Wockhardt is in the doldrums as its parent, the eponymous pharma company is in a financial mess and has reportedly put its hospitals business up for sale.
Strangely, not many foreign hospital chains has as yet finalised their plans to enter the country. Healthcare consulting firms have done studies for some likely entrants but nothing concrete has come of it as yet. Columbia Asia is the onlyforeign hospital chain, which is making steady investments and following a well thought through strategy of establishing its presence in tier 2 towns in India.
It appears that amongst the foreign players the reluctance to invest in India largely stems form the fear of the unknown. Everyone is waiting and watching for an opportune moment. The lack of a proper regulatory environment and an uncertain health insurance play is also acting as dampners.
However, I also believe that for wanna be investors, whether Indian Corporates or foreign players, the time is just about right to make that foray. It is being widely acknowledged that the worst of the economic downturn in India is behind us, a new government is set to take charge in less than 15 days from now and healthcare is bound to be on its priority agenda.
Pretty much like the telecom sector, I believe that the time has come for the healthcare sector to break the shackles and herald the next wave of transformation, which will fundamentally change the way most Indians access healthcare today.