Healthcare & Hospitals Industry Analysis

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Must know facts:

Other than most widely known Allopathic medicine, healthcare industry in India can be broadly categorised as AYUSH (Ayurveda, Yoga & Naturopathy, Unani, Siddha and Homoeopathy) treatment, thus ensuring availability of alternative medicine and treatment to the people.
Healthcare has become one of India’s largest sectors both in terms of revenue & employment. The industry is growing at a tremendous pace owing to its strengthening coverage, services and increasing expenditure by public as well private players.
A continuing rise in communicable diseases and a spurt in non-communicable or “lifestyle” diseases has significantly contributed to the growth of health care industry.
As per KPMG report on Firstpost – Indians met more than 62 percent of their health expenses from their personal savings, called “out-of-pocket expenses”, compared with 13.4 percent in the US, 10 per cent in the UK and 54 per cent in China.

Influencing Factors for price change:

Best analysis can be made when you analyse trends benchmarked against ‘S&P BSE Healthcare’ indices.
Healthcare industry is categorised into 3 stages — prevention, diagnosis, and treatment. No single entity in the healthcare sector can work in isolation. So any governmental policy driven changes can certainly trigger price movements.
Watch out for Government initiatives like – National AYUSH Mission (NAM), Intensified Mission Indradhanush (IMI) for improving coverage of immunisation in the country and reach every child under two years of age and all the pregnant women who have not been part of the routine immunisation programme.
Government is emphasising on the eHealth initiatives such as Mother & Child Tracking System (MCTS) & Facilitation Centre (MCTFC).

Understanding the Industry:

Rising income level, greater health awareness, increased precedence of lifestyle diseases and improved access to insurance would be the key contributors to growth. 58,000 job opportunities are expected to be generated in the healthcare sector by the year 2025. The Healthcare Information Technology (IT) market is valued at US$ 1 billion currently (April 2016) and is expected to grow 1.5 times by 2020. #

When you talk about Health care in India, you must always analyse perspectives from Insurance side as well. India has one of the lowest per capita healthcare expenditures in the world. Government contribution to insurance stands at roughly 32 percent, as opposed to 83.5 percent in the UK. The high out-of-pocket expenses in India stem from the fact that 76 percent of Indians do not have health insurance.

Estimated Market Size:

The total industry size is expected to touch USD160 billion by 2017 & USD280 billion by 2020. The hospital industry alone in India stood at Rs 4 trillion (US$ 61.79 billion) in 2017 and is expected to reach Rs 8.6 trillion (US$ 132.84 billion) by 2023.

Road Ahead:

The existing healthcare infrastructure is just not enough to meet the needs of the population. The central and state governments do offer universal healthcare services and free treatment and essential drugs at government hospitals. However, the hospitals are, as we said, understaffed and under-financed, forcing patients to visit private medical practitioners and hospitals.

Information Technology (IT) is set to play a big role with IT applications being used for social-sector schemes on a large scale. Hospitals empaneled under the government insurance scheme are IT-enabled and connected to servers in districts. Beneficiaries can use a smart card that allows them to access health services in any empaneled hospital.

Additionally, several new computer and mobile-phone based e-health and m-health initiatives were launched on World Health Day in 2016. These include the Swastha Bharat mobile application for information on diseases, symptoms, treatment, health alerts and tips; ANMOL-ANM online tablet application for health workers, e-RaktKosh (a blood-bank management information system) and India Fights Dengue.

– Article by Suman Adithya Rao (SEBI Certified Research Analyst, Management Graduate in Entrepreneurship & Small Business Management)
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Top Stocks in the industry:

Apollo Hospitals, Fortis Health care, Dr Lal PathLabs, Narayana Hrudayalaya & many more.

(Please note above stocks are not recommendations, they are purely for information purpose only)

Information Source / References: IBEF – Frost & Sullivan, LSI Financial Services, Deloitte, The Economic Survey 2016–17 & 17/18, Agricultural and Processed Food Products Export Development Authority (APEDA), Department of Commerce and Industry, Union Budget 2017–18, Press Information Bureau, Ministry of Statistics and Programme Implementation, Press Releases, Media Reports.

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