HEALTH

CARE
SECTOR
OF
INDIA

SUBMITTED BY:
JATIN KUMAR
173021
PGDM (IB)-17
HEALTH CARE SECTOR IN INDIA

INTRODUCTION
Healthcare has become one of India’s largest sectors, both in terms of revenue and
employment. India’s healthcare delivery system is categorised into two major components -
public and private. The government, i.e., the public healthcare system, comprises limited
secondary and tertiary care institutions in key cities and focuses on providing basic healthcare
facilities in the form of Primary Healthcare Centres (PHCs) in rural areas. The private sector
provides the majority of secondary, tertiary, and quaternary care institutions with a major
concentration in metros, tier-I, and tier-II cities.

Market Size: The Indian healthcare sector is expected to record a three-fold rise, growing at
a CAGR of 22% between 2016–22 to reach US$ 372 billion in 2022 from US$ 110 billion in
2016. By FY22, Indian healthcare infrastructure is expected to reach US$ 349.1 billion. The
healthcare sector is expected to generate 27 lakh jobs in India between 2017-22, over 5 Lakh
jobs per year.

India’s public expenditure on healthcare touched 2.1 % of GDP in FY23 and 2.2% in FY22,
against 1.6% in FY21, as per the Economic Survey 2022-23.

In FY22, premiums underwritten by health insurance companies grew to Rs. 73,582.13 crore
(US$ 9.21 billion). The health segment has a 33.33% share in the total gross written
premiums earned in the country.
ISSUES IN THE HEALTHCARE INDUSTRY:

TECHNOLOGICAL

 Infrastructural issues: Out of the current healthcare issues faced by the health sector in
India, the biggest has to be a lack of infrastructure. Repeated insufficiency of hospital
beds, a dearth of specialised faculty to treat major diseases, and high out-of-pocket
financial expenditure makes for an impossibly stressed national health care system.

Add to it a low rate of training professionals compared to other countries; the

workload on this struggling healthcare system is hanging by a thread at this point.

 IT and AI system failures: AI and Information technology are considered the

backbone of digital health. The data generated in digital health systems are
deliberately utilized by AI for improved diagnosis, selecting the right treatments and
predicting clinical outcomes. The well-established and innovative implementation of
such technologies enable viable uptake of digital health. Having said that, the
imperative is to carefully analyse the bottlenecks of AI and IT systems failure that
intensifies challenges around safety, sustainability and fairness.

 Ethical challenges: Data is a critical enabler of digital health practices. However, the
increasing use of using data collection tools raises many ethical issues that have been
overlooked during the accelerated digital transformation of the healthcare sector. To
achieve accuracy standards in digital health, stakeholders collect, store and analyse
health data which raises privacy-related concerns. In addition, risks associated with
data protection and informed patient consent also intensify ethical challenges in
digital health.

ENVIRONMENTAL

 Healthcare waste: Healthcare systems generate a lot of waste, out of which 70 to 75%
is similar to domestic waste in consumption, but 25 to 30% of waste falls under
hazardous healthcare waste, which if not disposed of carefully, may impact public
 health at large. Even the incineration of medical waste may emit high levels of heavy
metal and other air pollutants.

 Wastewater: Hospital wastewater may contain pharmaceutical products,

microorganisms, heavy metals, organic halogens, and free chlorine. Conventional
water treatment may not be effective in removing many pharmaceutical products
found in water.

 Greenhouse gas emission: The healthcare sector is a major emitter of greenhouse

gases. They generally originate from medical consumables usage emissions, energy
consumption in medical equipment, and patient and staff travel.

 Toxic chemicals: Toxic chemicals like mercury, flame retardants, and volatile
chemical products, maybe more dangerous for vulnerable populations like patients
with lesser immunity.

 Resource consumption: The healthcare sector uses a lot of natural resource

consumption.

SOCIAL

 Child mortality rates: While the world is going through a decline in mortality rates,
India remains high despite the miraculous technological advancements conducted in
the past two decades. According to an article published by the Times of India, India
has one of the highest infant mortalities in the world at 721,000.

One of the primary reasons for continued mortality rates is the belief that infant care
and pre-natal surgical procedures are too costly to be borne by the family. What we
must do is make people aware of low-cost interventions that work just as well as the
expensive ones. Not only will this reduce mortality rates in the long run, but it will
also help increase people’s belief in healthcare in India.

 Lack of Preventive Care: Preventive care is undervalued in India, despite the fact that
it has been shown to be quite beneficial in alleviating a variety of difficulties for
patients in terms of unhappiness and financial losses.

REGULATORY/POLITICAL
  India’s public expenditure on healthcare is only 2.1% of GDP in 2021-22 while Japan,
Canada and France spend about 10% of their GDP on public healthcare.

Even neighbouring countries like Bangladesh and Pakistan have over 3% of their
GDP going towards the public healthcare system.

OTHER ISSUES

 Health Education and Awareness – Limited health education and awareness among
the population contribute to challenges in preventive healthcare. Promoting health
literacy, spreading awareness about disease prevention, and encouraging healthy
lifestyles are crucial for improving overall health outcomes.

 Access to Healthcare – One of the major challenges is ensuring universal access to

quality healthcare services, especially in remote and rural areas. Limited healthcare
infrastructure, inadequate facilities, and a shortage of healthcare professionals make it
difficult for many people to receive timely and affordable healthcare.

 Healthcare Financing – Financing healthcare is a significant challenge in India. The

cost of healthcare services can be high, and a large portion of the population does not
have access to affordable health insurance or sufficient financial resources to cover
medical expenses. This leads to financial barriers and limited access to necessary
healthcare.

INTERVENTIONS / SUGGESTIONS FOR GROWTH

 Use of technology: In today’s world, online consultations and technological platforms

are in high demand. Given that the pandemic has extended the need to socially
distance, teleconsultations have become a need rather than a want for a majority of the
population. The ‘eSanjeevani’ app, an integrated web-based telemedicine service, was
launched by the Ministry of Health and Family Welfare in August 2019. By bridging
the gap between urban and rural India, it hopes to make healthcare more equitable.

 Health insurance awareness: The good news for India is that one of the country’s most
pressing healthcare challenges, healthcare insurance, has dramatically improved. In
 recent years, there has been a greater awareness of health insurance products, and
with each passing year, more people are purchasing them.

 Adopt Environmental sustainability for Hospital and Healthcare sectors by:

Minimizing and adequately managing waste and hazardous chemicals: This can be
done through waste reduction, reuse, and recycling of natural resources, and
substituting more hazardous chemicals for less hazardous alternatives within health
systems.

Encouraging sustainable procurement: Assessing the environmental impacts of

products and services needed or to be used, preferring the equipment or services that
consume less energy and have a lower environmental impact.

Engaging the Healthcare professionals as an agent of sustainability: Educating the

healthcare workforce on the environmental aspects of health systems, capacity-
building programs to keep the workforce to be prepared and able to adapt to the
impact of climate change, ensuring that healthcare professionals are protected from
environmental hazards and are safe at the workplace.

Incentivizing for adopting environmentally sustainable goals: Introducing low-interest

financing for green hospitals, selected tax incentives, additional ranks, or marks from
accreditation bodies, or by recognition and certification of such institutes or hospitals.

Easy Compliance norms: Making compliances easy for installing and accepting solar
panels, Water reuse plant, and radiation protection norms.

 Promoting efficient management of resources: Developing and implementing water

safety plans, automated water taps and human censors, architectural building designs,
reducing energy usage, increasing energy efficiency, and identifying areas where
energy resilience can be improved.

 Medical tourism: In comparison to countries in Western Europe or the United States,

India’s healthcare sector appeals to overseas patients because of the availability of
high-quality treatments at lower pricing. We can quickly expect a massive boost in the
 medical tourism front owing to the excellent vaccine supplying relations with stable
economies like Russia and Brazil too.

 Digital Strategy: India needs to own its digital health strategy that works and leads
towards universal health coverage and person-centred care. Such a strategy should
emphasise the ethical appropriateness of digital technologies, cross the digital divide,
and ensure inclusion across the economy.
 Using Local Knowledge: In addition to robust health systems, an effective national
response must also draw upon local knowledge. Primary health centres in India could
examine local/traditional knowledge and experience and then use it along with
modern technology.
 Creating fiscal policies, such as providing low interest rate loans, introducing tax
holidays for investment in low per capita income states, reducing import/excise duty
for medical equipment, et cetera, to promote investment in healthcare services.