The healthcare industry in India is in need of high growth to fill existing gaps and meet increasing demand. In recent years, the Indian government has made commitments to invest more in healthcare and to help fill some of these gaps. In 2009, government investment in healthcare as a percentage of GDP was only 1.2%. By 2017, it is expected to grow to 2.5%. As the population grows, disposable incomes increase, and the country becomes more and more urbanized, healthcare needs are changing and the demand for higher quality of care is on the rise.
The current inaccessibility of sufficient public healthcare services has caused many residents to turn towards the private sector and pay out of pocket. 70% of healthcare spending is out of pocket in India, most of which goes towards pharmaceuticals.
State governments maintain the primary responsibilities for administering and funding health services, and pay nearly two thirds of total public healthcare costs, while the central government funds the remainder. Public healthcare services can also vary extensively from state to state due to differences in revenues between states. The result is often inadequate care for the poorest people in rural India. The National Rural Health Mission, launched in 2005, and the Rashtriya Swasthya Bima Yojana program, launched in 2007, are two programs designed to address this very issue by improving the delivery of healthcare and providing a government funded insurance plan for residents below the poverty line.
Multiple health insurance options are also available to middle and upper class residents of India, including employer sponsored health insurance. Nevertheless, only 10% of families had one or more members covered by an insurance plan in 2009.
While the government continues to find ways to expand and improve the current system, there is still a great deal of room for growth. The Indian healthcare industry is estimated at $65bn USD as of 2012, and is projected to reach $100bn by 2015. Foreign direct investment has pumped billions of dollars into this lucrative market over the past several years.
The medical tourism market in India is worth $2.5bn USD and has inspired partnerships between hospitals and hotels. Expansion in the country’s information technology industry is leading to growth in telemedicine and electronic medical records. There is also a major gap in healthcare infrastructure which will largely have to be filled by private companies.
The introduction of product patents in India is expected to further boost the pharmaceutical industry by encouraging multinational companies to launch specialized life-saving drugs. Attracted by the advantages of low-cost production and a skilled workforce, these companies are looking to set up research and development and production centers in the country.
1,324.1 million(2016, World Bank)
$2,263 billion(2016, World Bank, USD)
- Healthcare Spending:
$106 billion(2016, Brocair estimate, USD)
- Healthcare Spending as % of GDP:
4.7%(2014, World Bank)
- Annual Healthcare Spending Per Capita:
$80(2016, Brocair estimate, USD)