McKinsey study bullish on medical tourism

Medical tourism can generate Rs 5,000-10,000 crore in additional revenue for upmarket tertiary hospitals by 2012, and will account for 3-5 per cent of the total healthcare delivery market, according to a study by the Confederation of Indian Industry (CII) and McKinsey.

The study expects the total healthcare market to rise from the present Rs 10,300 crore to Rs 23,200-Rs 32,000 crore by 2012. "The treatment of dental problems or a bypass surgery in India costs a fraction of what it does in most developed countries such as the UK or US. Cardiac surgery in India costs a tenth of what it does in the US," Naresh Trehan, chairman of the CII National Healthcare Committee, said.

At present, the market is limited to patients from the Middle East and South Asia. But, it can grow rapidly if the industry re-orients itself to attract foreign patients, the study said.

The study mentions that India has 1.5 beds for every 1,000 people, while China, Brazil and Thailand have an average of 4.3 beds. Changing demographic patterns and disease profiles and rising treatment costs will result in healthcare spending more than doubling over the next 10 years, the study says.

For the growth of this nascent sector, the study has recommended that the government should be committed to building adequate health infrastructure, create speciality tourist packages to include medical treatment, and promote hospital accreditation and standardisation.

Healthcare will attract the largest share of private spending in 2012, rising to Rs 15,600 crore from the current level of Rs 6,900 crore, the study says. The study also indicates that this can rise by an additional Rs 3,900 crore if health insurance cover is available to the rich and middle-class populace.

Public spending is expected to double from the present Rs 1,700 crore if the government reaches its target spending level of 2 per cent of the GDP, up from 0.9 per cent.

With the expected growth in the pharmaceutical market, the total healthcare market can rise from Rs 10,300 crore currently to Rs 23,200-Rs 32,000 crore by 2012.

The study points out that Indian healthcare is plagued by a lack of standardisation and accreditation, and highlights the need for information management expertise.