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Posted on 07 July 2011
Naresh Trehan

The benefits of a bad knee

Naresh Trehan says private healthcare in India will bring in $5 billion by the next year

Illustration: Tim Tim Rose

THE INDIAN economy is witnessing phenomenal growth and has been expanding at a prodigious rate, offering lucrative opportunities to those who are able to harness its potential. India’s economic growth and rapid urbanisation is bringing with it an expected health transition in terms of shifting demographics, socio-economic transformation and changes in disease patterns with an increase in degenerative and lifestyle diseases. Globally there is growing evidence that these costs are putting an unacceptable burden on the viability of these economies. While 16% GDP spends are too high for comfort at the national level, the pain at the level of individual companies is even more evident. Many large companies have highlighted the unsustainability of even meeting the healthcare cost commitments of their retired employees. The double whammy of higher per capita costs of an ageing population, and the fact of extended life spans of the general population, are placing unbearable financial burdens on countries, and on companies, that are typically used to enjoying dominance in global settings.

Inadequacy of health services is increasingly receiving the attention of countries across the development divide – developed or developing countries. Citizens want more and better health services and this is challenging national resources like never before. Clearly, healthcare costs of the developed world are climbing, and doing so at a pace, that is quite economically unsustainable.

India’s spends `1,03,000 crore – 5.2 per cent of its GDP – on healthcare; however the public spending on health (0.95 per cent of the GDP) is amongst the lowest in the world. In India, over 80 per cent of the healthcare spend is in the private sector. Investments in Indian healthcare reveal tremendous potential for the sector in the coming decades. According to the Emerging Markets Private Equity Association, India’s healthcare sector has attracted investments over $448 million in 2007, and between 2007 and 2012 the sector is expected to see investments around $4-5 billion. To encourage the growth of private health delivery, the government is also providing a variety of incentives, including lower import duties and higher depreciation rates on medical equipment, tax holidays, as well as expedited visas for overseas patients seeking medical care in India.


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There has been a transformation in the private healthcare delivery in India, with hospitals providing quality medical services; clinical excellence; state of the art infrastructure and technology comparable to the best in the world. With all coming together, medical tourism in India has gained momentum over the past few years, a trend underpinned by India’s clinical excellence; low-cost advantage and the emergence of new high quality healthcare service providers. In the past few years, India is seeing a surge of patients from developed countries due to constraints such as high costs, underinsurance or no insurance and long waiting lists for surgery. All these have prompted people from the West to look for more effective and immediate solutions.

The healthcare systems in Europe and the United States are under severe pressure with a long list of patients waiting for over a year for surgery. In the US, the healthcare crisis has a different dimension. Around 50 million citizens are uninsured, and even the ones with insurance have to pay dearly for treatment. Further, the shortage of paramedical professionals such as nurses has aggravated the situation. Patients from the US are now regularly beating a path to India, as many of their insurance companies have entered into tie-ups with private Indian hospital chains.

THE PRIVATE healthcare sector is responsible for more than 80 per cent of healthcare delivery in India, and has invested heavily in setting up state-of-the-art tertiary care institutes offering both general and specialty services. The combination of high quality and low cost facilities is attracting a regular stream of international patients. Last year, we had around 2,00,000 foreign patients for treatment in a few major specialty areas. The chart alongside compares the costs across the world.

Medical tourism is one of the major external drivers of growth of the Indian healthcare sector and is predicted to become a $2 billion-a-year business opportunity by 2012. Medical tourism is an example of how India is profiting from globalisation and outsourcing. It is also a new form of consumer diplomacy, whereby foreigners who receive medical services in India help the country promote itself as a business, medical and tourism destination. In addition to receiving traditional medical treatments, a growing number of western tourists are travelling to India to pursue alternate medicines such as ayurveda.

Medanta – The Medicity is one of India’s largest multi-super specialty institutes spread across 43 acres and has 1,250 beds with over 350 critical care beds and 45 operating theatres catering to over 20 specialties. At Medanta we have a highly qualified team of doctors; the highest standards medical care; state of the art technology and infrastructure; personalised patient care and a dedicated International Patient Division. A one-of-its-kind facility across the world, which, through research, will integrate modern and traditional forms of medicine to provide accessible and affordable healthcare. And it is part of the growing healthcare industry.

We have been seeing a surge of patients from across the world like from the US, Africa, Middle East and South and West Asia, where either the cost of healthcare is quite high or it simply lacks adequate healthcare infrastructure. Patients mainly come to for cardiac procedures, knee and hip replacements, organ transplants, cosmetic surgery, dental surgery, etc. Since our inception in January 2010, we have treated more than 5,000 International patients at Medanta - The Medicity. The figures show where healthcare is headed in India.

Naresh Trehan is Chair, Managing Director, and Chief Cardiac Surgeon at Medanta-The Medicity.
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Posted on 07 July 2011



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