Private Healthcare Market in India

• It is one of the fastest growing sectors
• Current industry size is approximately US$ 17 billion
• Healthcare spending estimated to double in the next 10 years
• With the development of the pharmaceutical market, healthcare sector would grow from US $17 billion to US $50 billion
• Growth for private participation has been at the rate of 13% annually
• The industry will grow faster with the expansion of health insurance in the country
According to forecasts, the GDP growth in the short-term is expected to hover around 6-7%. But, for the short-to-medium term, the projections are at a 10% mark - making India as one amongst the fastest growing economies.

Despite the improving health status of the Indian population, healthcare infrastructure in India has a long way to go towards achieving 100% quality, technology and superior healthcare delivery systems. While the Central Government is limited to family welfare and disease control programs, the State Governments are responsible for primary and secondary medical care with a limited role in specialty care. Looking at the healthcare indicators and the growing prevalence of non-communicable lifestyle related diseases, both the government and private sector, realize the need to meet this basic demand. Today, the private sector provides 80 percent of the healthcare service.

Private Healthcare Industry in India
Increasing private sector participation in healthcare services is stimulating change in the Indian healthcare industry. According to an ICRA industry report on Healthcare, India spends 5.1 percent of its GDP on health. The health market is estimated at Rs.1, 408 billion ($30 billion) and includes retail pharmaceutical, healthcare services, medical and diagnostic equipment and supplies. Since healthcare is dependent on the people served, India's huge population of a billion people, represents a big opportunity. The middle-income group in this vast base is also a large 250 million. The proportion of households in the low-income group has declined from 58.8% in 1990, to 49% in 1996. At the same time, the middle & higher income-group has increased from 14% to 20%, in the same period.

People are spending more on healthcare. Today, a middle-level manager with a family of four, spends between Rs.8,000 and Rs.12,000 a year on healthcare - compared to just Rs.2,000 in the late -1980s. Most users of healthcare have been paying from their own pocket and preferring private services to government ones. The rise in literacy rate; the higher levels of income; and an increased awareness through the deep penetration of media, has constituted to greater attention being paid to health.

The road ahead and Growth Prospects
In view of the growing population and higher incidence of non-communicable diseases, it is estimated that the demand for quality healthcare in India will increase. The role of the private sector is likely to further increase with preference for private care and government’s constrains of limited resources. There are various gaps in the Indian Healthcare Market, which also present a vast opportunity. Good Healthcare in India is in extreme short supply and it is this gap that Corporates are looking to plug.