>HEALTHCARE TRENDS (KPMG)

Insights
• The Indian healthcare industry is estimated to double in value by 2012 and more than quadruple by 20171. 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.

• There is growing appreciation for the role private involvement may have in meeting public demand, and government are looking into the use of PPP models to help improve infrastructure and healthcare provision. The government is also exploring setting up state funded healthcare insurance schemes to support healthcare delivery for the poorer sections of the population. For investment to be effective, the provision of healthcare infrastructure and insurance should be strategically coordinated.

• Unlike in developed markets, where there is a focus on generating specialized healthcare facilities and innovations to drive improvements in health services, the Indian healthcare delivery model (including use of PPP) has to date only had success in the provision of more healthcare services in relatively small segments. The challenge remains to develop scalable and sustainable healthcare delivery models to deal with India’s diversity and changing socio-economic population profiles. The major innovation in Indian healthcare delivery models needs to be focused on developing and delivering low cost, affordable, basic healthcare services.

Model Outputs
• Based on the outputs of our econometric model expenditure on healthcare infrastructure across the Indian states is projected to grow by an average of 5.8 percent per annum between 2009 and 2013, taking the total expenditure in 2013 to US$14.2 billion

• Of the 32 states considered, the six states of Maharashtra, Rajasthan, West Bengal, Uttar Pradesh, Tamil Nadu and Andra Pradesh are forecast to represent approximately 50 percent of the expenditures for the 2009-2013 period

• Of the larger states, expenditure on healthcare infrastructure is expected to grow the fastest in Krintala, Rajasthan, and West Bengal.

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