Credit rating agency, ICRA, has stated that the Indian healthcare industry is expected to grow between 12-14% in the coming five years. This news is no surprise, as the healthcare sector in India is booming and growing at nearly the same rate in the last three years. The country also has the one of the most affordable medical treatment options found anywhere in the world.
ICRA says that growth will be fuelled by increase in medical tourism and higher health insurance penetration. Medical tourism will be the primary driver, as there has been an increase in the influx of international patients seeking medical help within the country. The majority of patients come from developing countries in Middle East, South Asia and Africa, who throng multi-speciality hospitals for their complex and high-value procedures.
These “complex and high-value procedures” offer significant cost advantages for international patients, as they are done at nearly 60-90% of the total cost incurred for the same in the United States. This benefit has translated into medical tourism growing by more than 20%. If this growth momentum is maintained, the industry will double in size by the year 2021.
Overseas patients come mostly from developing countries where healthcare infrastructure is inadequate and expensive with long waiting periods. In order to address this shortage, some countries support overseas travel for medical treatment, with India being one of the beneficiaries of these policies. The Indian government recently approved liberalised medical visa regulations, which allow for a 60-day stay and triple entry; measures which should provide further impetus to the medical tourism sector.
Large, private hospital chains in metros and tier-I cities are well positioned to make the most of this opportunity, as India has a shortage of beds with limited government investments in this sector.
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