Healthcare Sector in India

Healthcare Sector in India is one of the country’s largest and fastest-growing industries, encompassing hospitals, medical devices, clinical trials, outsourcing, telemedicine, medical tourism, health insurance, and medical equipment. The sector’s robust growth is driven by increased public and private investments, government initiatives, and a burgeoning population demanding better healthcare services.

In this article, you will know about meaning, mechanism, and trends of Healthcare Sector in India. To explore more interesting UPSC Social Issues topics of GS Paper -1 like Healthcare Sector in India, check out other articles and IAS Notes of IASToppers.   

Table of Content

• Introduction
• Role of the state in Healthcare Sector
• Legal and Judicial means for Right to Health
• Trends in India’s Healthcare Sector
• Key Components and Growth Drivers of Healthcare Sector
• Challenges and Opportunity faced by Healthcare Sector
• Conclusion
• FAQs

Introduction

• The Preamble of the Constitution of the World Health Organization (WHO) defines health as “A state of complete physical, mental and social well-being and not merely the absence of disease or infirmity.”
• It emphasizes that the achievement of any state in protecting and promoting health is valuable to all.
• This serves as ideal state role in public health- providing, facilitating, and regulating health systems to ensure that it is available, accessible, affordable, acceptable, and of good quality.
• The objective of a healthcare system is to promote, restore, and maintain good health, and the state is bound to ensure this is achieved effectively and efficiently.
• The Healthcare Sector in India is vast and multifaceted, encompassing hospitals, medical devices, clinical trials, outsourcing, telemedicine, medical tourism, health insurance, etc.
• Healthcare Sector is experiencing rapid growth due to expanded coverage, improved services, and increased spending by both public and private sectors.

Role of the state in Healthcare Sector

The Supreme Court of India, in Vincent Panikurlangara v. Union of India, affirmed the state’s obligation to create and sustain conditions conducive to good health.

State as a Benefactor

• The state’s primary responsibility is to provide quality healthcare services to its citizens.
• It formulates policies and plans for efficient healthcare delivery through both public and private sectors.
• While the private sector often excels in certain areas, it operates under state supervision. The state ensures:
  • Availability: Healthcare services and institutions must be available to everyone.
  • Accessibility: Services should be physically, economically, and informationally accessible.
  • Acceptability: Healthcare services must be culturally appropriate, respectful of medical ethics, and sensitive to patient needs.
• States, governed by their own laws and international commitments, but a fair health system ensures equitable distribution of services, and prevent discrimination.
• State-owned hospitals provide subsidized healthcare, enhancing physical accessibility especially in rural areas, and reducing financial hardship associated with healthcare costs.
• Information accessibility ensures the public has the right to health information.

State as a Regulator

• The state regulates the healthcare system through norms, standards, policies, and strategies to ensure quality and protect citizens’ right to health.
• Regulations are imposed at all levels, with various laws and regulatory bodies overseeing the healthcare sector.
• For instance, the National Medical Commission Act, 2019, regulates the professional conduct of health workers in India.
• It aims to improve accessibility to quality and affordable medical education and ensure the availability of high-quality medical professionals.
• The state also regulates the production and distribution of drugs, including vaccines, ensuring equitable supply, pricing, and quality.
• Through effective regulation and supportive policies, the state can create a healthcare system that is equitable and efficient, safeguarding the health rights of all citizens.

Legal and Judicial means for Right to Health

• The Directive Principles of State Policy (DPSP), enshrined in Chapter IV of the Constitution of India, lay down a framework for the state’s duties, which include:
• Promoting the welfare of its people (Art. 38)
• Protecting their health and strength from abuse (Art. 39(e))
• Providing public assistance in cases of sickness, disability, or “undeserved want” (Art. 41)
• Ensuring just and humane conditions of work
• Raising nutrition levels, improving the standard of living, and considering the improvement of public health as a primary duty (Art. 47)
• 11th and 12th Schedules of the Constitution: Assign specific responsibilities to Panchayats and Municipalities- include providing clean drinking water, healthcare, sanitation, family welfare, and the development of women and children.

Judicial Interpretation of Right to Health

• Although the Constitution does not explicitly recognize the Right to Health as a fundamental right, judicial interpretation has integrated this right under life and personal liberty (Article 21).
• Vincent Panikurlangara (1987): Affirmed the state’s obligation to create and sustain conditions conducive to good health.
• Francis Coralie Mullin (1981): Defined “life” under Article 21 as a life with human dignity, encompassing the right to livelihood, better standard of life, hygienic conditions, and leisure.
• Bandhua Mukti Morcha (1984): Held that while the DPSP are not binding, they should guide the state’s actions. The Court emphasized that dignity and health are part of life and liberty under Article 21.
• Paschim Banga Khet Mazoor (1996):  Expanded the scope of Article 21, asserting the government’s responsibility to provide adequate medical aid to every person.
• Parmanand Katara (1989): Held that every doctor, whether at a government hospital or otherwise, has a professional obligation to protect the life of a patient.
• Consumer Education and Research Centre (1995): Declared that the right to health and medical aid for workers is a fundamental right under Article 21.
• Burrabazar Fire Works Dealers (1998): Clarified that Article 19(1)(g), which guarantees the right to practice any profession, is subject to restrictions in the interest of public health and safety.

Trends in India’s Healthcare Sector

• India’s healthcare sector, currently valued at $372 billion, has tremendous potential for growth.
• This sector is expanding at a compounded annual growth rate (CAGR) of 22%, and global healthcare market valued at $10 trillion.
• Growing Incidence of Lifestyle Diseases: Increasing demand for affordable healthcare delivery systems due to rising healthcare costs.
• Technological Advancements: Emergence of telemedicine and other digital health solutions.
• Medical Tourism: India is becoming a preferred destination for medical tourists due to high-quality, cost-effective healthcare services.
• Clinical Trials and Outsourcing: Increasing number of clinical trials and outsourcing opportunities due to India’s diverse population and cost advantages.
• Health Insurance Penetration: Rapid increase in health insurance coverage is driving the healthcare market growth

Key Components and Growth Drivers of Healthcare Sector

• Hospitals: Current Value: INR 7940.87 Bn (FY21)
  • Projected Value: INR 18,348.78 Bn (FY27)
  • Growth Rate: CAGR of 18.24%
• Telemedicine
  • Current Market Size: Expected to reach $5.4 Bn by 2025
  • Growth Rate: CAGR of 31%
  • Potential: Highest potential eHealth segment in India
• Healthcare Infrastructure: India needs 3 million more beds by 2025 to achieve the target of three beds per 1,000 people, highlighting urgent need for investment in infrastructure.
• Public Health Expenditure: Increased year-on-year, reaching USD 63 billion in 2022 (2.1% of GDP), targeting 2.5% by 2025.
• Positive Banking Perspective: Post-COVID-19, the importance of healthcare has increased, particularly the need for pre-health check-ups, indicating a shift towards preventive healthcare.
• Sectoral Growth and Potential: Growth in sectors within healthcare, including hospitals, diagnostics, pharmacy, and drug discovery.
• Health-Seeking Behavior: It has increased, leading to higher demand for healthcare services, thus is underpenetrated compared to global standards.
  • This presents opportunities in localization, outsourcing, and digital health.
• Digital Health and Convenience: Its growing demand underscores the importance of technology in providing accessible and efficient healthcare solutions.
• Mergers and Acquisitions: With private equity investments driving up valuations, selling stakes has become an attractive option.
  • The new generation in the healthcare business is more open to these opportunities, contributing to sector consolidation.

Government Initiatives

• Government Initiatives and COVID-19: It implemented measures to improve healthcare infrastructure and accessibility under initiatives like Ayushman Bharat.
  • The central and state governments have taken extensive measures to contain the virus spread, ensuring healthcare services are accessible to all citizens during the crisis.
• Ministry of Health and Family Welfare (MoHFW): Committed to increasing immunization coverage.Strengthening health systems, particularly among tribal communities.
• Universal Immunization Programme (UIP): Targets: 26.7 million newborns and 29 million pregnant women annually, Aim: Reduction of vaccine-preventable under-5 mortality rates.
• National Digital Health Blueprint: Can unlock incremental economic value of over $200 Bn for the healthcare sector over the next 10 years
• Health Insurance Scheme: Ayushman Bharat is World’s largest government-funded healthcare program
• Medical Education Investment: INR 17,691.08 Cr and New Medical Colleges 157 approved since 2014
• Foreign Direct Investment (FDI) Policy: 100% FDI allowed under the automatic route for greenfield projects
• National Tele Mental Health Programme & Helpline: Received over 100,000 calls by March 2023
• eHealth Initiatives: Technological advancements and increased health insurance penetration by  e-health aim to make healthcare more affordable and accessible.
• Ayushman Bharat – NHP Scheme: Aims to provide comprehensive healthcare services to the underprivileged.
• Physician and Bed Ratio: India has 0.9 physicians per 1,000 people (global average: 1.8), and 0.5 hospital beds per 1,000 people (target: 3.5).
• Public and Private Investment: Increased investment to improve healthcare infrastructure and resources
• Reduction in Out-of-Pocket Expenses: Decreased from 64.2% in 2013-14 to 48.2% in 2019-20

Challenges and Opportunities faced by Healthcare Sector

1. Rural Healthcare The experts discussed the challenges in rural healthcare, emphasizing the need for improved healthcare services in underserved areas. Addressing these challenges is crucial for achieving equitable healthcare access across the country.
2. Regulatory Challenges Regulatory challenges in the insurance and medical devices segment were also highlighted. Streamlining regulations and ensuring compliance can foster a more conducive environment for growth and innovation in these areas.
3. Investment and Financing The panelists stressed the importance of investments, healthcare financing, and private equity funding in shaping the future of healthcare. Ensuring adequate funding and support for healthcare startups and established companies is vital for sustaining growth and meeting the sector’s evolving needs.

Conclusion

India’s healthcare sector is poised for significant growth, driven by government initiatives, increasing public and private investments, and a large, growing population. With substantial opportunities in various sub-sectors, including hospitals, home care, pharmaceuticals, diagnostics, and medical devices, the Healthcare Sector offers promising prospects for domestic and international players. The government’s focus on improving Healthcare Sector and making healthcare more accessible and affordable further supports the sector’s growth trajectory.

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FAQs (frequently asked question)