For the past many years, the healthcare sector in India has faced multiple challenges such as availability, access, affordability, tech optimisation, and data management. Added to this is an aging population, rising prevalence of chronic diseases, and higher labour costs.
However, the need of the hour for healthcare systems is to work towards a future where the focus is more on the prevention and early intervention, than the treatment itself.
The industry is about to witness significant changes over the next few years, as many leading healthcare companies are set to redefine themselves with digital transformation applied to their main functional areas with a customer-centric approach.
The smartphone and internet penetration in India has allowed people not just living in urban areas but even the rural parts of the country to gain access to healthcare, online.
According to an IBEF report, The hospital industry in India is forecasted to increase to Rs 8.6 trillion ($132.84 billion) by FY22 from Rs 4 trillion ($61.79 billion) in FY17 at a CAGR of 16 to 17 percent.
“The prominent reason why people are moving towards online consultation platforms is the lack of time and the fact that 70 percent of primary healthcare issues can be solved without the physical presence of the doctor,” says Satish Kannan, Co-founder and CEO of DocsApp.
Bengaluru-based DocsApp gives patients the choice of making video calls and voice calls to doctors, with an in-built chat application. Claiming to have over 5,000 specialist doctors registered on the platform, DocsApp provides consultations across 15 specialities including gynaecology, paediatrics, dermatology, psychiatry, sexology, weight management, and general medicine.
It lets the user even order medicines and book diagnostic tests online. The startup claims to have a user base of over six million people across metro cities and smaller towns.
DocsApp is just one example that represents how India saw healthcare before and after technology and venture capital accelerated it. There are other healthtech players like CureFit, Practo, HealthifyMe, and FitMeIn among others, which are disrupting the space.
According to India Brand Equity Foundation (IBEF), the country’s healthcare industry is reportedly one of the fastest growing sectors and is expected to reach $280 billion by 2020.
India saw the healthcare industry not just experiment but effectively move towards artificial intelligence (AI) solutions. Globally, there has been a high level of interest and solid outlook, with investments in AI healthcare going up from $1.6 billion in 2017 to $3 billion in 2018, according to Tracxn.
The sharp rise in investment in AI healthcare solutions illustrates the strong outlook and high level of interest in this space. Globally, investments in healthcare AI have gone up from $1.6 billion in 2017 to $3 billion in 2018, according to Tracxn.
Anjana Sasidharan, Principal at Sequoia Capital, said,
"In addition to traditional healthcare players like GE Healthcare, Philips, and Samsung, even global majors like Facebook and Google are investing across disease monitoring and prevention, diagnostics, robot-assisted surgery and solutions that leverage existing healthcare EMR data to automate workflows and virtual nursing."
According to a Frost and Sullivan Survey, in 2018, AI for healthcare (IT application) market is expected to cross $1.7 billion by the end of 2019 and projected to achieve a CAGR of 68.5 percent by 2022.
Thanks to data, the sector now has ample playground to investigate the viability of treatments across verticals like drug utilisation and self-care to even treating chronic illnesses with customised plans and subscriptions.
The healthcare sector in India has been growing at a brisk pace, thanks to its improved services, coverage, and effective usage of technology.
However, with more exposure to data and technology comes the vulnerability to cyber threats as well. The beginning of 2019 alone witnessed more than 4.1 billion data records exposed in known data breaches. Out of which, 89 percent of the organisations belong to the healthcare industry.
All said, the expenditure in this sector has been lukewarm, with the country spending 3.66 percent of GDP for the sector in 2016. It was further reduced to 1.4 percent during the last year.
Pavan Kushwaha, CEO and Founder, Kratikal said, “Healthcare industry suffers from the highest number of ransomware attacks, which are estimated to quadruple by 2020. One can foresee that an increasing number of companies will start investing in cybersecurity solutions that will ensure data security with 51 percent agreeing on investing in advanced technologies that will make data secure during data transfers.”
The healthcare industry in India also found itself acquiring the necessary tools, exposure as to when to cross its boundaries, and leverage on big data and manage it efficiently. Researchers have found that the adoption of big data is projected to touch $34.27 billion by 2022 globally.
Within the frameworks of artificial intelligence, machine learning is expected to show scope to create an impact across the spectrum, and not just limit itself to risk analytics and drug discovery.
Dheeraj Jain of Redcliffe Capital says artificial intelligence and machine learning can open up several opportunities for predictions, and it is going to be a gamechanger if the predictions occur at the pathology stage itself.
He said that he had seen these trends lead to the birth of healthtech unicorns in the United States, and it is soon arriving in the emerging markets.
“I think it’s a combination of many things – the market is big, diagnostics is a Rs 55,000 crore industry, and molecular is fairly a small sector in India compared to the Western market, and so we believe the ventures we are backing could be large success stories.”
Gaurav Gupta, Co-founder of Navia Life Care, believes the sector will grow significantly in 2020, and go on to replicate that of the fintech sector.
“There were many VC-PE funds in the healthcare sector this year. We believe that this momentum is going to continue for a while now, and the sector will grow significantly in the coming year, replicating Indian Fintech sector growth.”
In June this year, Bengaluru-based health and fitness startup Cure.fit closed a total of $120 million in its Series D round. The startup had raised $75 million in April 2019 and an additional $45 million later. In total, the Mukesh Bansal and Ankit Nagori founded startup raised around $294 million in funding, and is estimated to be valued at more than $580 million.
Overall, Mumbai-based PharmEasy raised more than $320 million in seven funding rounds, Bengaluru-based Practo over $180 million in 7 rounds, and Gurugram-based 1mg over 130 million in 11 rounds.
Mukesh Bansal said, “Health habits of consumers has changed over the past few years and the need for a new tech-driven approach is the need for a much better consumer experience.”
Overall, the bullish behaviour from the venture capital fraternity and effective placement of emerging technologies have brought in more efficiency in the healthcare ecosystem. This has also positively impacted smaller neighbourhood hospitals as well.
Across the ecosystem, hospitals became more open to innovative solutions to improve patient experience and patient outcomes. In 2020, the adoption of innovative solutions by hospitals are expected to increase even further, apart from big data, cloud computing, Blockchain, and innovative insurance models for preventive healthcare.
According to IBEF, by 2020, India is expected to rank amongst the top three healthcare markets in terms of incremental growth. By 2022, the diagnostics market is expected to grow at a CAGR of 20.4 percent to reach $32 billion from $5 billion in 2012.
(Edited by Megha Reddy)