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					Services Marketing Healthcare Sector

Hospitable and Hospitals, which have much in common etymologically speaking, seldom used to appear in the same sentence. In recent times, however, the major objective of healthcare architecture has been to design hospitals to make them more hospitable, to create 'a pleasant and sustaining environment.' Martin Fiset In a nation like India, where there is no formal social security system in place, notwithstanding the high tax rates, healthcare and health insurance become that much more crucial.One of the fastest growing and most potent sectors in India is the healthcare sector. India has become a hot medical destination for patients in the Middle East, Africa and even the West. Word is fast-spreading that Indian hospitals can provide world-class care at competitive rates. India today has big names in healthcare like the All India Institute of Medical Sciences (AIIMS), Apollo Hospitals and Shankara Netralaya. A vibrant and dynamic healthcare sector is imperative for the new human resource intensive world. Quality healthcare is vital for the growth of any nation. The key objectives of an effective healthcare system would be to enhance average life expectancy and to improve quality of life and productivity. The sector today has a radical outlook with major emphasis on high skill sets that can leverage technology and medical science, and needs to cater to a critical and inevitable customer need at an affordable cost. It works on the principle of network economics touching innumerable lives. The Indian healthcare sector constitutes:
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Medical care providers: physicians, specialist clinics, nursing homes and hospitals and Diagnostic service centers and pathology laboratories, Medical equipment manufacturers, Contract research organizations (CRO's), pharmaceutical manufacturers, Third party support service providers (catering, laundry)

Before independence the health care sector was in dismal condition with high morbidity and mortality rates and prevalence of infectious diseases. Since independence emphasis has been put on Primary Health Care and India has worked continuously to improve its health care system in the last several decades. Considerable progress has been made in expanding the public system and reducing the burden of disease. But the government funded facilities were not enough to meet to the growing demand of population, whether

it was primary, secondary or tertiary care, which necessitated the need for alternate source of funding in the healthcare sector. Post Liberalization, in the 1980's the entry norms for Private players in the Health services industry was relaxed by the Government. The private healthcare facilities are owned and run by for-profit companies, non-profit or charitable organizations. The entry of private sector has opened a gamut of opportunities for India in terms of Medical Equipment, Information technology in health services, BPO, Telemedicine and Medical and Health Tourism. An estimated 100,000 "Medical Tourists" visited India last year, representing a 20 per cent jump over the previous year. Today the healthcare industry has emerged as one of the most challenging sectors as well as one of the largest service sector industries in India with estimated revenue of about $ 30 billion (FY 2005) constituting 5% of the GDP. The Indian Health Services sector is estimated to be around Rs. 750 billion with hospitals accounting for more than half of this. The sector has had a growth of over 12% p.a. in the past four years and is estimated to grow by 170% by 2012. Though the private sector has been responsible in bringing about the desired changes in the health industry, the health sector performance requires much improvement in comparison with other emerging economies, including most comparable nations in the region. Deficiencies persist with respect to access, affordability, efficiency, quality and effectiveness, despite the high level of overall private and public expenditure on health. To bring in the desired changes for a healthy growth of healthcare sector, a well-defined partnership between the government and the private sector is essential. To catalyze the desired changes in the Healthcare industry, FICCI has a Health Services Committee with representative from the industry. The purpose of the Committee is to develop an agenda for Health Services Reforms and recommend a framework for Public - Private Partnership to enhance quality healthcare in our country.

Current Trends in Healthcare Trend 1 The Private Sector Takes the Lead
The delivery capability of India’s healthcare industry has not been able to match up with the burgeoning population and socio-economic changes. The growth rate of over 13% witnessed by the healthcare industry in 2006 is only a precursor of far greater increases to be seen in the future. This is driven by a host of ubiquitous factors that are inevitably defining individual and societal needs and preferences in the 21st century. Besides the growing population, these include a rise in income levels across all strata of society, the commensurate increase in lifestyle diseases, deeper penetration & growing involvement of health insurance, newer treatment modes and finally the inadequacy of the public healthcare delivery systems

Trend 2 Access to quality healthcare in the private sector till now is limited by the high cost for the vast majority of India’s population. However, this is changing dramatically with the advent of health insurance as a preferred tool to finance most healthcare expenditures. Health insurance is destined to grow exponentially in the coming years with large and diverse players having entered the fray and enticing consumers with an ever growing array of schemes. There is still a lot of ground to be covered - even today over 75% of the expenditure on healthcare is still being met by consumers “out of pocket”. The entry of pure Health Insurance companies into the marketplace in 2007 promises a plethora of innovative products. Swiss Re estimates a potential of US$ 7,700 million in health insurance premium by 2015. In 2007, Foreign Direct Investment (FDI) limit in health insurance may be raised from 26% to 49%, which would result in surge of international players & even more customized offerings targeting all sections of society. In the event of the minimum capital requirement of US$ 22 million being reduced to US$ 11 million, a number of standalone players would enter the fray as is the trend across the world for health insurance. SHARE OF PUBLIC / PRIVATE SECTOR COMPANIES IN HEALTH INSURANCE PREMIUM 2005-06

As more corporate bodies enter healthcare market, the 'business' of running hospitals requires a specialised approach to the interiors of the hospitals. . Trend 3 Standardization: Healthcare’s Need for Uniformity Health processes in advanced countries are well standardized both in the terms of the clinical protocols and actual delivery. This, apart from producing superior outcomes and reducing error probability also provides transparency on the effectiveness of the treatment, which is increasingly critical given the more informed and demanding patients or health “seekers”. A growing number of hospitals in India are turning to accreditation agencies worldwide to both standardize their protocols and project their international quality of health care delivery. Joint Commission International (JCI), the leading healthcare accreditation agency in the United States has accredited five hospitals in India till date. However, most hospitals in India are unlikely to go for JCI accreditation due to the high cost of accreditation and compliance. The JCI accreditation is likely to be limited to only those players who are banking on international patients to swell their numbers. Trend 4 Manpower: Reversing the Brain Drain

One of the pivotal factors to sustain the projected growth of the healthcare industry in India would be the availability of a trained workforce, besides cheaper technology, better infrastructure etc. Worldwide, the shortage of doctors, nurses and paramedical staff has led to an exodus of such manpower from India in the last three decades. A major challenge for our nation and the healthcare industry would be not only to retain the healthcare workforce but also to develop an environment which would attract those abroad to return. Even if the number of doctors were to increase from 0.6 to 0.8 per 1000 population and number of nurses were to increase from 1.5 to 2 per 1000 population to catch up with best world practices, India needs 0.2 million doctors and 0.5 million nurses

right away, besides need for other paramedical and healthcare management personnel. One of the encouraging trends has been the growing interest of physicians of Indian origin who number is more than 60,000, working in other nations and willing to return home. The world class infrastructure which most corporate hospitals offer along with salary levels to facilitate the same living index at par with the west are just two reasons which are encouraging more top notch doctors to come back. Growing restrictions on licensing and practice within the European Economic Community is also translating into a large number of Indian doctors looking to relocate back from the UK which accounts for over 15,000 doctors of Indian origin. The recent developments in the UK are a case in point.Indians Physicians constitute 11% of United Kingdom and 5% of work force of United States. HEALTHCARE Trend 5 Technology Takes Centre Stage Duty free import of equipment, instruments and consumables. Tax holiday under Section 10A/ 10B of the Income Tax Act The biotech company located in biotech parks will be allowed a five-year time frame to meet the export obligation Technology in the last two decades has revolutionized the way healthcare is delivered worldwide. It has greatly aided patients and providers alike by enhancing the quality of delivery, reduction in turn around time of workflows (and thus the overall cost), besides bringing in higher accountability into the system. As a typical example, a 100 bedded hospital could decrease its time for discharge by 50% to less than 60 minutes leading to an approximate increase in revenue of over 25%, on an average investment of only 2% of its annual revenue by an appropriate hospital information system. The Indian medical equipment and consumable market which is presently valued at over US$ 2 billion is largely made up of imports which account for over 90% of this share. The whole medical equipment market is witnessing a CAGR of 15%. Medical equipment takes the biggest share as 52% followed by consumables 26%, orthopedic products 19% & medical furniture 3%. With the additional infrastructure requirements we predict this could reach over US$ 18 billion dollars in the next five years.


IT/IT ENAB Trend 7 Medical Value Travel: The Hype and the Reality DRIVERS 1. Lower delivery cost 2. World class facilities 3. Highly qualified and experienced medical professionals 4. Less waiting time 5. Rising number of uninsured in developed countries ROADBLOCKS 1. Poor public infrastructure 2. Inadequate air connectivity 3. Visa requirements from most countries 4. Medico legal jurisdictions 5. Country specific restrictions

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