Healthcare industry to double in value by 2012: KPMG

Propelled by rising income levels as well as changing demographics and illness profiles, particularly with a shift from chronic to
lifestyle diseases, the Indian healthcare industry is estimated to double in value by 2012 at $14.2 billion and more than quadruple by 2017, says the latest Indian Healthcare edition of KPMG’s Global Infrastructure – Trend Monitor. According to the report, this is likely to result in considerable infrastructure challenges and opportunities. Of the 32 Indian states that the report considers, the six states of Maharashtra, Rajasthan, West Bengal, Uttar Pradesh, Tamil Nadu and Andhra Pradesh are estimated to represent approximately 50 per cent of the expenditure for the 2009-2013 period. Speaking on the release of this report, Pradip Kanakia, head of markets and healthcare services, KPMG, said, “While the Indian healthcare system has grown manifold over the past few years, it has yet not been able to keep pace with the rapid rise in the population. One example of that is the availability of hospital beds in our country – against a world average of 4 beds per 1000 population, India lags behind at just over 0.7 presently.” Thus, there is a dire need to introduce some radical reforms in the healthcare infrastructure development process. For instance, use of PPP models on a larger scale and foreign investments are some which could be considered. The report suggests that there is a growing need to deal with the issues of urban healthcare infrastructure as rural to urban migration has significantly increased the demand for these services. The report also looks into the fact that the Indian healthcare system is controlled by respective state authorities, presenting an opportunity to improve responsiveness to healthcare needs at a more local level. Ameeta Chatterjee, director - corporate finance, KPMG, said, “There has been an increasing awareness of private sector involvement in meeting the requirement of the country’s health services requirement. The Indian solutions that will evolve need to be focused on developing affordable, low cost basic healthcare services with scalability and sustainability as key drivers.” The report suggests that there is opportunity to improve responsiveness to the country’s healthcare needs at a more local level due to uneven focus on healthcare infrastructure in India This can be attributed to the healthcare system in the country which is controlled by respective state authorities. The variety of organizational structures and processes in healthcare delivery may result in greater inequalities between geographical areas. There is a growing agenda to deal with the issues of urban healthcare infrastructure as rural to urban migration has significantly increased demand for these services.