Healthcare Landscape in India: Challenges versus Emerging Technologies (Part I)

By Gauree Agarwal, Consultant Asha Impact

The Indian healthcare industry is at a very interesting position, delicately poised to grow to USD 280B[i] by 2020. As India’s masses increase in affluence and awareness, they are demanding access to better health care. Despite this increased demand for quality healthcare, India’s healthcare spending pales in comparison to other developed or emerging economies, with the Indian government spending less than 1.3%[ii] of the GDP on healthcare. Poor insurance coverage in a country where 80% of doctors are in the urban areas serving only 28 % of the population[iii], there is a consistent widening demand-supply gap in service delivery. Moreover, rural India accounts for 50–70 % of non-communicable diseases, the economic burden of which is expected to be ~$6.2 trillion by 2030[iv].

The increasing consumption pattern and rise in ‘lifestyle-oriented’ diseases pose a significant threat to the country’s development. With a burgeoning population base where more than 50% of India’s population is below 25 years, and a widening demand-supply gap in service delivery, the healthcare landscape is looming with challenges that will impact country’s ability to utilize its demographic dividend effectively. Staring at a bleak future such as this makes it imperative for all stakeholders to address the grey clouds circling the healthcare sector and tackle these challenges immediately:

  1. Infrastructural Shortage — With an immense shortage of qualified doctors and nurses, there is an urgent need for exponential growth at this front. The doctor-patient ratio in India is at a frightening rate of 1:1674; much below WHO’s minimum prescribed ratio of 1:1000[v]
  2. Lack of Accessibility — The private sector runs a majority of secondary and tertiary cares facilities that are majorly concentrated in Tier 1/Tier 2 cities, causing a huge demand-supply gap in underserviced areas where 70% of the population lives. Moreover, the great disparity in the availability of skilled resources between rural areas and urban areas ensures more treatments taking place in private facilities versus public facilities in both urban and rural areas. In rural India, only 37% of people have access to In-Patient Department (IPD) facilities within a 5 km distance; and only 68% have access to an Out-Patient Department (OPD)[vi].
  3. Lack of Quality — With less than 2%[vii] of hospitals in India being accredited, India lacks consistent quality in the healthcare sector across the nation. India’s ranking of 154[viii] out of 195 countries on Healthcare Access & Quality Index can also evidence this severe lack of quality healthcare delivery.
  4. Lack of Affordability — Public healthcare spending in India is among the lowest in the world, while private spending accounts for almost 70% of expenditure[ix]. Low penetration of insurance has also led to an exorbitantly high out-of-pocket (OOP) expenditure on healthcare at 62.4% as compared to our developed counterparts; with UK and USA being around 9.7% and 11% respectively[x]. This has led to a major barrier in health-seeking behavior in India with nearly 63 million[xi] people being in debt due to health expenditure
  5. Lack of Patient Education — Lack of awareness about diseases, care and services available has rendered the Indian healthcare system as reactive. Patients don’t act proactively and often visit a hospital only when the disease has reached an advanced stage.

While these roadblocks might dampen the spirit of development, they also provide significant opportunities for the private and public sector to innovate and scale. The government recently rolled out the Ayushman Bharat NHPS under the 2018 Union Budget that provides healthcare insurance of upto INR 5 lakh to 50 crore underserved individuals, covering around 40% of the Indian population[xii]. While programs like these would greatly help in increasing the affordability of health care services for the masses, it is imperative to complement such policy initiatives with an outcome-based approach focused on implementation. This is where the private sector can act as a catalyst in catering to the unique obstacles of the Indian market to create an enabling atmosphere for this sector.

While prioritizing healthcare is the need of the hour, it is important to focus on implementing mass-market measures since the supply of traditionally delivered health care services cannot hope to keep up with the ever-increasing rising demand. The healthcare industry needs to move beyond conventional growth such as increasing hospitals and physicians every year, and instead adopt models that disrupt the current operating structure. With the advent of technology in the last decade, health-tech has shown significant promise to address these gaps in the Indian healthcare infrastructure. Increasing digitization of processes and smartphone penetration in India has led to immense potential for service providers to leverage technology to provide cost-effective, scalable and quality solutions for India’s distressed healthcare landscape. We will cover a few of these innovative business models aided by technology in the next part of this series.


If you have any thoughts on the sector, feel free to reach out to me at gauree@ashaimpact.com and I’d love to discuss it further.

[i]https://economictimes.indiatimes.com/industry/healthcare/biotech/healthcare/indian-healthcare-sector-to-grow-to-280-billion-by-2020-report/articleshow/48742696.cms

[ii]https://economictimes.indiatimes.com/industry/healthcare/biotech/healthcare/india-spends-less-than-brics-saarc-nations-on-health/articleshow/56848698.cms

[iii] https://www.hindustantimes.com/health-and-fitness/80-of-doctors-in-india-serve-only-28-of-the-nation-s-population-report/story-hxfxTu1jiYoplroBrD0vyL.html

[iv] https://m.dailyhunt.in/news/india/english/inc42-epaper-inc/decoding+sectors+that+will+disrupt+indian+healthcare+delivery-newsid-68395288

[v] https://www.indiatoday.in/mail-today/story/grim-picture-of-doctor-patient-ratio-320590-2016-04-29

[vi] https://economictimes.indiatimes.com/industry/healthcare-biotech/80-per-cent-of-indian-doctors-located-in-urban-areas/articleshow/53774521.cms

[vii] https://www.pwc.in/assets/pdfs/publications/2018/reimagining-the-possible-in-the-indian-healthcare-ecosystem-with-emerging-technologies.pdf

[viii] https://www.livemint.com/Politics/b9c6cJFhzDHfubCfXEEIoJ/India-ranks-154-in-global-healthcare-rankings-for-2015-Swit.html

[ix] https://www.pwc.in/assets/pdfs/publications/2018/reimagining-the-possible-in-the-indian-healthcare-ecosystem-with-emerging-technologies.pdf

[x] https://www.pwc.in/assets/pdfs/publications/2018/reimagining-the-possible-in-the-indian-healthcare-ecosystem-with-emerging-technologies.pdf

[xi] https://www.governancenow.com/news/regular-story/63-million-indians-are-in-debt-due-healthcare-expenditure-report

[xii] https://timesofindia.indiatimes.com/business/india-business/budget-2018-50-crore-indians-get-a-new-lease-of-health/articleshow/62748433.cms