Healthcare An Unprecedented Opportunity Healthcare India An Overview

Healthcare An Unprecedented Opportunity

Healthcare ØIndia - An Overview ØMarket and Growth Potential ØPlayers ØOpportunities ØWhy India? ØContact in India

India - An Introduction ØPopulation Over 1 bn ØStates/UTs 35 ØGeographical Area 3. 3 mn sq kms ØLanguages recognised 22 ØBusiness language English ØPer Capita Income** US$ 534 ØGDP** US$ 650 bn **(at factor cost & at current prices) 1 USD=43. 54 INR (as on July 4, 2005) Source: CSO Statistics

India - Fast pace Growth Ø Largest democracy Ø 4 th largest economy by PPP index Ø 6 th largest energy consumer Ø For. Ex reserves skyrocket from US$ 42 bn (2001) to US$ 133 bn (February, 2005) Ø GDP growth to continue between 6 -8% Ø 3 rd largest economy by 2050: Goldman Sachs Ø Leading in IT & BPO Ø Oil & Gas and Biotechnology sunrise industries

India - Leading the world Ø Hero Honda - largest manufacturer of motorcycles Ø Moser Baer - among the top three media manufacturers in the world Ø Pharmaceutical Industry - 4 th largest in world Ø Walmart, GAP, Hilfiger sources more than USD 1 bn worth apparel from India Ø 100 Fortune 500 have set R&D facilities in India including GE, Delphi, Eli Lilly, HP, Heinz and Daimler Chrysler

Healthcare ØIndia - An Overview ØMarket and Growth Potential ØPlayers ØOpportunities ØWhy India? ØContact in India

Healthcare Delivery Market Sector Direct employment Revenues/GDP Million, 2000 -2001 Per cent, 2000 -2001 Healthcare Education Retail banking Power Railways Telecom Hotels, restaurants IT Revenues Employment Largest service industry Second largest after education Source: National Accounts Statistics, 2001; Manpower profile; CBHI; Mc. Kinsey analysis

Healthcare Delivery Market Size 2000 -01 US$ 18. 7 bn 5. 2% of GDP US$ 45 bn 2012 (projected)* 8. 5% of GDP ØGrowing at 13% p. a ØExpected to grow at 15% over next 4 -5 years * Source: CII – Mc. Kinsey

Rising Healthcare Spending 5. 2% of GDP Total Healthcare market Pharma market Healthcare delivery market India spent US$ 22. 4 billion on healthcare (2001)

Household - Major Consumer Employer’s spend Private/social/ community insurance Direct household spend Government’s spend Two-thirds of healthcare spending is out-of-pocket 100% = USD 1, 830 million Out-of-pocket Prepayment 2000 -01 Source: NSSO; CMIE; NCAER; Annual Reports; Govt Budgets; Economic Survey 2000 -01

Healthcare - Private sector Dominates Private providers Government & public employers In terms of delivery, private providers capture 63% of US$ 1, 830 million spend Source: CII -Mc. Kinsey 100% = USD 1, 830 million

Health Insurance in India Ø Liberalising insurance sector Ø Multinationals building local partnerships

Health Insurance in India Ø Health insurance cover 3 - 4 % of 1 billion population ØGrowth of insurance cover in last 2 years 100%

Healthcare ØIndia - An Overview ØMarket and Growth Potential ØPlayers ØOpportunities ØWhy India? ØContact in India

MNCs in India Philips emerging as number two in Indian medical systems market Siemens leading manufacturer of medical equipment Drager Medical AG joint venture between Dragerwerk AG and Siemens AG Wipro GE largest medical systems sales & Medical Systems service provider in India Proton Health Care entering India with digital health monitoring devices

Healthcare ØIndia - An Overview ØMarket and Growth Potential ØPlayers ØOpportunities ØWhy India? ØContact in India

Invest in India requires US$ 25 billion in fresh investments over the next 8 -10 years Source: Indian Healthcare Federation, CII

Invest in India Ø Service providers Curative and preventive in primary, secondary and tertiary care; rehabilitativegeriartric and others Ø Manpower training Doctors, managers, nurses, technicians Ø Infrastructure Medical equipments & service equipments Ø Insurance Hospitalisation Ø Materials Medicines disposables

Preventive and curative care Rising demand for multi and super-speciality services Shift from infectious to lifestyle diseases 85% of inpatient spend on five categories Cardiology, Oncology, Trauma, Acute Infections and Maternity

Rising demand for quality healthcare In ten years between 1993 -94 and 2001 -02, aggregate household expenditure on health services increased by an annual compounded rate of 9. 3%

Corporatisation of Indian healthcare Corporate hospitals 150 Private hospital beds 32% of total hospital beds

Health Insurance - A vast untapped market Only 2. 5 million or. 25% of population insured 315 million people in India can afford insurance

Health Insurance - A vast untapped market Projected insurance base 2005 30 million 2010 160 million Source: India Country Commercial Guide 2002

Preventive healthcare Addressable population for preventive healthcare check-ups 160 million Year - on - year growth more than 20 -25% over 2001 -2003

Healthcare BPO - Promising dynamism Claims adjudication Medical billing By 2008 USD 4. 5 billion opportunity employing 200, 000 people* Forms processing Disease coding *Source: NASSCOM

Telemedicine - Diversifying opportunity ØTap the large Indian landscape ØRural population of 650 million people

The Indian Biomedical Devices Market Ø Size US$ 1. 5 billion Ø Growing demand for medical equipment

Healthcare ØIndia - An Overview ØMarket and Growth Potential ØPlayers ØOpportunities ØWhy India? ØContact in India

Demographic Advantage Growing population 2. 5% annually Expanding working population group 65% by 2020 Improving life expectancy Age 15 -54 2001 55% 2010 59%

Infrastructure 117 tertiary medical colleges and hospitals Tertiary Care 1, 200 ESI and PSU hospitals 4, 400 district hospitals Secondary Care 2, 400 Community Health Centres 23, 000 Primary Health Centres 132, 000 Sub-centres Primary Care 1500 urban health posts Urban Rural

Medical Tourism Ø Healthcare facilities - high quality at low cost Ø Edge in surgical treatment Potential to earn USD 1 billion from medical travel

Cost Advantage Treatment India US Liver Transplant 40, 000 5, 000 Heart surgery 5, 000 - 7, 000 30, 000 Bone Marrow Transplant 30, 000 2, 50, 000 All figures in USD Cost of advanced surgeries in India is attractively low compared to US

Quality Advantage Services and facilities in India Low in cost High on quality

Policy Advantage Increase in health spend 5% of GDP by 2010 Increasing budgetary allocation 2005 Over 20 % per annum Union Budget 2005 -06 Infrastructure status not conferred Custom Tariff on medical equipment Rates reduced from 20% to 15% March 2005

Healthcare ØIndia - An Overview ØMarket and Growth Potential ØPlayers ØOpportunities ØWhy India? ØContact in India

Contact in Indian Healthcare Federation c/o Confederation of Indian Industry The Mantosh Sodhi Centre 23, Institutional Area Lodi Road New Delhi - 110 003. Tel 00 91 11 2462 9994 -97 Fax 00 91 11 2462 6149/2461 5693 E mail c. banerjee@ciionline. org