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Diagnostics in India: Full-throttle growth expected in the near future

Publication: Business Standard
Posted on: May 12, 2017

 

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Diagnostics in India: Full-throttle growth expected in the near future

Govt’s universal health plan is expected to cost an estimated Rs 1.6 trillion over the next 4 years

Dr Sushil Shah  May 12, 2017 Last Updated at 15:49 IST

The Indian industry has been stirred by a number of factors over time. It has now reached a place from where it can grow exponentially, given the right resources. The recent spike in the pace and speed of growth of can be attributed to strengthening coverage, improved quality of services, and increase in expenditure by public as well as private players.


Amid this impressive progress, one industry that has emerged as a prominent game changer in the sector is In a market where there are no certain governing laws to check quality of services, the private players have taken upon themselves to introduce standardisation in their practice and follow protocols set by international medical bodies to ensure consistent and world-class service to all their consumers.


However, lack of entry barriers and absence of strong regulation in the market has also led to an increase in number of unorganised, standalone players, which form a substantial part of this fragmented market. Such players have proven useful in catering to the diagnostic needs of tier II and tier III cities, where almost every area has local and generic diagnostic laboratory, particularly dealing in services. Larger, organised chains are continuously scouting for acquisition of such regional chains to enhance their business and bring in quality services to smaller regions.


A number of government initiatives have also propelled the overall growth of the sector in India. Under the National Health Assurance Mission, Prime Minister Narendra Modi’s government would provide all citizens with free drugs and diagnostic treatment, as well as insurance cover to treat serious ailments. India has also become one of the leading destinations for and high-end diagnostic services, with tremendous capital investment for advanced diagnostic facilities, thus catering to a greater proportion of population. This universal health plan that the government aims to offer, is expected to cost an estimated Rs 1.6 trillion ($ 23.72 billion) over the next four years. This has encouraged private players to increase their efforts and invest in a number of awareness initiatives too.


Rising penetration of private medical insurance plans has also been observed as one of the major driver for the diagnostic laboratories market. Financial constraint is considered to be the primary hurdle while seeking medical treatment, claimed 55 percent of the rural population and 60 percent of the urban population in India. As health insurance companies step in and increasingly cater to this need by providing medical cover to a person at nominal premium amounts, consumers have the freedom to seek the best services available. Unlike the past, today about 20 percent of the Indian population has been covered with health insurance benefits.


Clinical Trial image via Shutterstock

lmage via Shutterstock

IT and evolving technology has also benefited the industry. Health tracking mobile applications and online services such as booking appointments online for preventive checkups, booking a path/lab test, obtaining reports online are further shaping this segment. India is also expected to show high growth rates in the next six years in molecular market. The current is split between imaging and with 30 percent and 70 percent respectively. testing being first line of diagnosis for majority of diseases is the major factor that resulted in it attaining a dominant position in the market. High differential costs in India allows for outsourcing of and tests by foreign hospital chains.


Tier I cities have contributed a majority part of revenue share to the total revenue earned by the India’s private diagnostic laboratories market in FY’2016. Rise in pollution levels in tier I cities increased the chances of more severe diseases being spread across the masses, thereby resulting in more demand for diagnostic services and preventive care. Moreover, high awareness among the educated people living in these cities resulting in more number of preventive testing has added to the revenue of overall diagnostic laboratories market making the segment dominate the market.


For any ambitious organisation aiming to become a success in this rapidly growing diagnostic laboratories market, the best move at the moment is to plan to invest in tier II and tier III cities of India. The companies should expand their network by collaborating with more health institutes and increase their collection centers in India resulting in widespread reach and more access for the masses.
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Dr is the founder & chairman of Ltd
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