Strategic tools for the practising manager

KIT

THIS WEEK: HEALTHCARE INDUSTRY TRENDS "" II

Healthcare in India is estimated to be a Rs 1,61,000 crore industry. It is expected to reach over Rs 3,45,000 crore by 2010.

The private sector today accounts for 80 per cent of the healthcare expenditure and is expected to reach 90 per cent by 2010.

The public sector enjoys a lion's share in healthcare insurance premium (76 per cent).

The private sector accounts for the remaining 24 per cent.

Less than 10 per cent of India's population avails a healthcare insurance cover (either voluntary or as part of employees' state insurance, Central Government Health Scheme or community insurance.)

More than 75 per cent of the healthcare expenditure is borne by the consumer himself.

If this year the foreign direct investment (FDI) limit in health insurance is raised from the current 26 per cent to, say, 49 per cent, it may result in a surge of international players and even more customised offerings targeting all sections of society.

The brain-drain phenomenon prevalent in India seems to be reversing "" more than 60,000 physicians working in the West reportedly want to return because of better growth opportunities.

Selections from management journals
NUGGETS

In December 2006, Mumbai-based Tech Mahindra won India's biggest outsourcing deal to date "" a five-year, $1-billion contract from British Telecom to provide technical support.

While the deal further underscores India's rapid ascent in global business, it also signals a transition for the world's "back office" from its current status as a provider of data processors and call-centre workers to its new role in outsourcing high-end, knowledge-based skills.

In this report, experts from Wharton and Boston Consulting Group look at India's move up the service value chain through KPO, or knowledge process outsourcing, as well as its increasingly successful forays into global manufacturing, driven by the emergence of a vast domestic market and the availability of low-cost, skilled workers. The report also looks at India's attempts to overcome the problems with power and infrastructure.

What's next for India: beyond the back office
Knowledge@wharton
Download the report from http://knowledge.wharton.upenn.edu/papers/

Product companies are struggling to reduce the cost of the services operations that support and maintain their product lines.

Unlike manufacturers, which can optimise controllable processes, services organisations have to manage many variables, including unique requests, challenging environments, and differing levels of employee motivation.

Still, companies can improve the productivity of their services by reducing the demand for service work, assigning the least costly resources to tasks, and boosting labour output. Improving productivity in these ways usually raises rather than lowers customer satisfaction.

Improving productivity in product services
The McKinsey Quarterly, Web Exclusive, February 2007 Subscribe to the article at www.mckinseyquarterly.com