Healthcare in India is growing at a significant pace. The healthcare delivery industry in India has reached 5 lakh crore and is poised to grow at 10%-12% across the next decade. Below is how Indian healthcare industry benchmarked with the world standards.
Along with the structural demand existing in the country and the potential opportunity it provides for growth, provision of healthcare in India is still riddled with many challenges. The key challenges are inadequate health infrastructure, unequal quality of services provided based on affordability and healthcare financing.
India lags peers in healthcare expenditure
Global healthcare spending has been rising faster in keeping with the economic growth. As the economy grows, public and private spending on health increases, too. Also, greater sedentary work is giving rise to chronic diseases, which is also pushing up healthcare spending. Fast-growing economies with low spending on health are seeing chronic diseases increase dramatically as they move up the income ladder. Developed economies such as United states, Germany, France, Japan, United Kingdom, spend higher on healthcare as compared to developing nations such as India, Vietnam, Indonesia, etc.
According to the Global Health Expenditure Database compiled by the WHO, in CY2020, India’s expenditure on healthcare was 3.0% of GDP. As of CY2020, India’s healthcare spending as a percentage of GDP trails not just developed countries, such as the US and UK, but also developing countries such as Brazil, Nepal, Vietnam, Singapore, Sri Lanka and Malaysia.
Further, India’s public spending on healthcare services remains much lower than its global peers. For example, India’s per-capita total expenditure on healthcare (at an international dollar rate, adjusted for purchasing power parity) was only $56.6 in CY2020 versus the US’s $11,702.4, the UK’s $4,926.3 and Singapore’s $3,537.0.
India has one of the highest shares of out-of-pocket expenditure in healthcare; however, the government aims to increase public healthcare expenditure to 2.5-3% of GDP by 2025 from the current ~2%, as per the National Health Policy.
The Government of India spends little in healthcare given the size of the economy, which drives the higher out-of-pocket expenditure in India. Despite the decline in the past few years, India’s OOPE as percent of current health spending is 51% as of CY2020, significantly above the average for lower-middle income countries, and amongst the highest in the world. As per economic survey data for FY2021-22, 80-85% of the in-patient hospitalisations did not have any coverage. This explains the higher share of OOPE in health care expenditure. The government of India has introduced schemes such as Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (ABPMJAY), state sponsored health insurance (AB-PMJAY State Extension Schemes), Employees’ State Insurance Scheme (ESIS), Central Government Health Scheme to increase the coverage of medical insurance.
Health infrastructure of India in dire need of improvement
The adequacy of a country’s healthcare infrastructure and personnel is a barometer of its quality of healthcare. India accounts for nearly a fifth of the world’s population, but has an overall bed density of merely 15, with the situation being far worse in rural than urban areas. India’s bed density not only falls far behind the global median of 29 beds, it also lags that of other developing countries such as Brazil (21 beds), Malaysia (19 beds), and Vietnam (26 beds).
As opposed to the decreasing rate in communicable diseases, lifestyle-related illnesses or non-communicable diseases (NCDs) have been increasing rapidly in India over the past few years. The contribution of NCDs to the disease profile rose from 30% in 1990 to 55% in 2016. Recent statistics show these illnesses accounted for nearly 66% of all deaths in India in 2019.
As per the World Economic Forum, the world will lose nearly $30 trillion by 2030 for treatment of NCDs and India’s share of this burden will be $5.4 trillion.
In 2019, of the total disease burden, the contribution of the group of risks (unhealthy diet, high blood pressure, high blood sugar, high cholesterol, and overweight) which mainly cause ischemic heart disease, stroke and diabetes rose to~27%.
Below is the cost of various treatments in India vs various other countries
