Indian Healthcare industry estimated to double in value by 2012 at USD 14.2 billion and more than quadruple by 2017: KPMG report

Rising income levels, Changing demographics and shift in disease profile from chronic to lifestyle diseases to propel the growth of Indian Healthcare Industry.

Some facts

• The healthcare sector in India is undergoing a phase of reform propelled by rapid economic growth. Apart from the healthcare providers, emerging markets such as diagnostic chains and medical device manufacturers, are attracting increasing amounts of investment.

• In comparison to all 32 states, Maharashtra forecasted to maintain its dominance as the state with highest cumulative healthcare infrastructure expenditure, with spend of USD 7.3billion between 2009 – 2013

• Twelve states spent less than US$100million each in 2006, together representing less than 4.5 percent of total national expenditure and 3.6 percent of the population.

• States of Manipur and Nagaland expected to grow the fastest on development of healthcare expenditure – over 8 percent, against an overall national average of 5.8 percent (between 2009 – 2013)

• Uttar Pradesh that hosts over 16 percent of the population is presently amongst lowest spenders in terms of expenditure per person (less than USD 5 as per 2006 figures, expected to grow to USD 25 between 2009-2013)

The health infrastructure across Indian states is projected to grow by an average of 5.8 percent per annum between 2009 – 2013, taking the total expenditure in 2013 to USD 14.2 billion, suggests the Indian Healthcare edition of KPMGs trend monitor.

Of the 32 Indian states that the report considers, the six states of Maharashtra, Rajasthan, West Bengal, Uttar Pradesh, Tamil Nadu and Andhra Pradesh are forecasted to represent approximately 50 percent of the expenditure for 2009-2013 period.

Speaking on the release of this report, Mr Pradip Kanakia, Head of Markets and Healthcare Sevices , KPMG said “While the Indian healthcare system has grown manifold over the past few years but it has yet not been able to keep pace with the rapid rise in the population. One example of that is the availability of hospital beds in our country – against a world average of 4 beds per 1000 population, India lags behind at just over 0.7 presently”. He added “There is a dire need to introduce some radical reforms in the healthcare infrastructure development process – use of PPP models on a larger scale; foreign investments are some which could be considered”

The report suggests that there is a growing need to deal with the issues of urban healthcare infrastructure as rural to urban migration has significantly increased the demand for these services. The report also looks into the fact that the Indian healthcare system is controlled by respective state authorities, presenting an opportunity to improve responsiveness to healthcare needs at a more local level, the KPMG analysis suggests that there is uneven focus on healthcare infrastructure in India, the variety of organizational structures and processes in healthcare delivery may result in greater inequalities between geographical areas.

During the release of the report, Ms Ameeta Chatterjee, Director - Corporate Finance, KPMG said "There has been an increasing awareness of private sector involvement in meeting the requirement of the country's health services requirement. The Indian solutions that will evolve need to be focussed on developing affordable, low cost basic healthcare services with scalability and sustainability as key drivers". The report analyses and suggests that there is opportunity to improve responsiveness to country’s healthcare needs at a more local level due to uneven focus on healthcare infrastructure in India This can be attributed to the healthcare system in the country which is controlled by respective state authorities. The variety of organizational structures and processes in healthcare delivery may result in greater inequalities between geographical areas. There is a growing agenda to deal with the issues of urban healthcare infrastructure as rural to urban migration has significantly increased demand for these services.

The Indian Healthcare edition of KPMGs Global Infrastructure – Trend Monitor states that the Indian healthcare industry is estimated to double in value by 2012 and more than quadruple by 2017. The main factors propelling this growth are rising income levels, changing demographics and illness profiles, with a shift from chronic to lifestyle diseases. This is likely to result in considerable infrastructure challenges and opportunities.

About KPMG:
KPMG is the global network of professional services firms of KPMG International. KPMG member firms provide audit, tax and advisory services through industry focused, talented professionals, who deliver value for the benefit of their clients and communities.

KPMG in India has offices in Mumbai, Delhi, Bangalore, Chennai, Hyderabad, Kolkata Pune and Kochi.

Log on to www.in.kpmg.com for a copy on the report

For further information contact:
Subir Moitra
Senior Manager – Marketing & Communications
KPMG
Cell : +91 98111 99613
e-mail : smoitra@kpmg.com