Forecast of the development of the medical services market in India
The relevance of research
A medical service is a set of necessary, sufficient, conscientious, professional actions of a medical organization (service provider) aimed at meeting the needs of the patient. At the same time, the concept of ""medical service"" can be considered more broadly, it is not only about measures aimed at treating the patient, but also about providing additional services to the patient in the process of receiving medical care.
Purpose of the study
Analysis of the state of the medical services market in India, assessment of the market size, analysis of competitors, as well as identification of factors affecting the medical services market
Content
Chapter 1. Key components of the medical services market
1.1. Market size
1.2. Growth rates of the medical services market
1.3. Medical Services Market Trends
1.4. The main problems of the industry
1.5. Stage of the life cycle of the medical services market
1.6. Estimation of the number of buyers and their financial capabilities
1.7. Estimated consumption per capita
1.8. Analysis of sectoral indicators of financial and economic activity
1.9. Price analysis
Chapter 2
2.1. Economic components
2.2. Social Components
2.3. Technological components
2.4. Political Components
2.5. STEP-analysis of the medical services market
Chapter 3. Assessment of the degree of competition
3.1. Scale of competition (local, regional, national, global)
3.2. Number of competitors and relative market shares of the largest competitors
3.3. Compact location of industry companies in certain regions
Chapter 4 Industry Forecasts
4.1. Analysis of the impact of recent crises on the industry (the global crisis of 2008 and the currency crisis in India in 2014)
4.2. Analysis of the impact on the state aid industry at the current date
4.3. Assessment of the degree of impact of the crisis due to covid-19 on the analyzed market. Barriers existing in the market of medical services
4.4. Prospects and growth drivers for the medical services market
4.5. Forecast for the development of the medical services market in the context of the current economic crisis due to covid-19
Chapter 5 Forecasting Methodology
5.1. Methods for forecasting key industry indicators
5.2. Sources of information for forecasting
5.3. Timing of forecasting
Research excerpt
Chapter 1. Key components of the medical services market
1.1. Market size
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Network laboratory diagnostics is the main driver of the commercial medicine market. This is due to a number of reasons:
–– convenience for consumers (high speed of rendering services and obtaining results, service, location);
- Opening a collection point for biomaterials is easier and cheaper than a clinic;
– Opportunity to work under the franchising scheme.
1.2. Growth rates of the medical services market
The medical services market in India is represented by both public and private clinics. Data on market volume values were formed on the basis of information on paid medical services according to Rosstat.
Diagram 1. Dynamics of the volume of the medical services market, 2016–2020, billion Rs.
1.3. Medical Services Market Trends
The key trends in the Indian medical services market include:
Increasing competition between private organizations and public clinics for patients and doctors. A high level of competition is typical for large cities, however, it has a significant territorial diversification: many residents will give preference to little-known companies if they are within walking distance and have a convenient doctor's appointment schedule;
According to the study ""Labor market in private medicine in 2020"" conducted by the KAUS-Medicine personnel company, doctors who combine two specialties are in high demand in the private sector, for example, pediatrics and allergology-immunology or pediatrics and pediatric neurology;
Transformation and expansion of the range of paid medical services provided, including services not only for outpatient, but also inpatient treatment, rehabilitation and health services, which were previously provided mainly by municipal and state healthcare institutions;
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1.4. The main problems of the industry
The main issues in the industry include:
Personnel problems (low qualification of medical staff, shortage of personnel, competition for a good doctor, insufficient communication skills of doctors to communicate with patients);
Difficulties in the field of CHI (low tariffs, delays in payment for services rendered);
Insufficient mobilization readiness in the face of large-scale biological threats;
Insufficient financing of the health care system;
Weak use of information and communication technologies;
Patients have become focused on one-time visits to solve a specific problem, as a result of which the share of prepaid programs and comprehensive services in the revenue of some medical organizations has noticeably decreased.
1.5. Stage of the life cycle of the medical services market
In general, the medical services market is in the stage of maturity. The maturity stage is the longest of all life cycle stages. It is built on the use of the service by conservative consumers, on fame and wide representation, which ensures a stable level of sales over a long period.
The market has already been divided among major players and it will be quite problematic for a new operator to stay in it.
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The level of competition in the market has reached its maximum and is stabilizing, which, in the face of a slowdown in growth, creates a more aggressive struggle for existing consumers. A high value at the stage of maturity gets the speed of the company's reaction to the actions of competitors.
1.6. Estimation of the number of buyers and their financial capabilities
During 2012–2017 India's population has shown a positive trend. The current demographic situation in India is characterized by natural population decline (since 2017), which is accelerating, and migration growth, which does not compensate for natural decline.
In general, according to the assessment of the Cabinet of Ministers, the population of India will be declining over the next four years, and positive growth rates are expected only in ...
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1.7. Estimated consumption per capita
Estimated volume of consumption per capita was made by GidMarket on the basis of the ratio of the volume of the medical services market to the population of India.
Diagram 5. The volume of consumption in the market of medical services per capita, 2016–2020, Rs./person
1.8. Analysis of sectoral indicators of financial and economic activity
For the analysis of industry indicators, financial indicators and coefficients of the OKVED 86 “Healthcare activities” industry were used.
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Profit before tax reflects the share of revenue that remained in the enterprise as profit before tax. The value of the indicator in the medical services industry throughout the entire study period is close to the average values for all industries as a whole.
Current liquidity characterizes the extent to which all short-term liabilities of the enterprise are secured by current assets. Shows how many rupees of current assets account for a unit of short-term liabilities.
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For Indian companies, the normative value of the absolute liquidity ratio is in the range Kal > 0,2–0,5. In the field of medical services, the absolute liquidity indicator is higher than the normative value - 0,63-0,77 times, which indicates inefficient and irrational use of funds that could be directed to the development of the enterprise. It also indicates the presence of unclaimed amounts of money in the accounts.
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In general, the analysis of sectoral financial ratios in the field of medical services shows high gross profitability and profitability before tax, while indicators of sectoral values of absolute liquidity and financial stability indicate the ability of most enterprises to repay current debt at the expense of existing current (current) assets.
1.9. Price analysis
The rise in prices in medicine is largely due to the rise in the cost of renting real estate, imported medicines and equipment, and an increase in staff salaries.
Table 3. Consumer price indices in the medical services market in India in 2016–Aug. 2021, %
In the context of federal districts, prices are traditionally higher than the average Indian prices in the Central Union Territories, the North-Western Union Territories and the Far Eastern Union Territories.
Table 4. Average prices in the medical services market by Union Territories, Aug. 2021 Rs.
Unfortunately, paid medical services are still inaccessible to the majority of the Indian population, at least not everyone can use them regularly.
Chapter 2
2.1. Economic components
India GDP
GDP is a macroeconomic indicator that reflects the market value of all final goods and services produced in a year in all sectors of the economy on the territory of the state for consumption, export and accumulation.
The dynamics of India's GDP is decisive in the vector of development of the entire economy of the country and determines the key trends in consumer effective demand and economic activity.
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The share of medical services in the structure of paid services to the population of India
During 2016–2020 there is an increase in the share of medical services in the structure of paid services to the population. Despite the decline in real money incomes of the Indian population in the analyzed period, the share of medical services in 2020 compared to 2016 increased by 1,4 percentage points. This trend is positive for the paid medical services market.
Diagram 10. Dynamics of the share of medical services in the structure of paid services to the population of India, 2016–2020, %
Difficulty of private operators competing with public health care institutions for the provision of CHI services
A private organization providing medical services is primarily focused on making a profit, as a result of which, when determining the cost of services within the framework of participation in the CHI program, it is difficult for private organizations to compete with public institutions that are not motivated to make a profit based on the results of a particular period. Bad influence.
2.2. Social Components
Place of work of a person, place of residence, ecology
In recent decades, various diseases have become much younger. This is due to environmental degradation, increased stress levels and a sedentary lifestyle. This factor positively influences the market of medical services.
Aging
Aging is another factor in the development of diseases and, as a result, has a positive effect on the development of the medical services market.
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2.3. Technological components
Product innovations and technologies
Innovative technologies are becoming more and more widespread. Here are some of them:
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Modern equipment and equipment
Despite the modernization carried out in the healthcare sector, public clinics cannot yet boast of using equipment and equipment of the same quality as private ones, as this requires huge financial costs. At the same time, both private and public health care institutions are striving to equip their centers to the best medical standards. Purchase modern diagnostic equipment - CT / MRI, endoscopic devices, etc. However, in the private sector, equipment is often more dynamic. Since the funds for this are sought by a group of leaders, and in the case of state medicine, everything depends on the budget allocated by a particular region.
Moreover, in state medical institutions there are clear budget restrictions for the purchase of expensive equipment, and the management of budgetary medical institutions, as a result, is forced to limit the list of their services due to the fact that not every medical facility is able to purchase the necessary equipment for serious research. But private hospitals invest a significant share of their profits in the purchase of equipment. Since the newer and better the equipment, the greater the range of medical services it can provide, and the better these services will be.
Industry digitalization trend
The digitalization trend has also affected the medical services industry as a whole. In particular:
The Voice2Med program has been developed, which is designed to save medical staff from manually filling out electronic documents. The program automatically recognizes medical speech, translates it into text, offers to finish part of the text with a ready-made template, understands the commands for printing and saving the document.
The development of telemedicine, which is especially in demand in Indian realities, when citizens have to travel hundreds of kilometers for the usual consultation of a specialized specialist. At the same time, according to the Pediatrician 24/7 telemedicine service, up to 80,0% of visits to the doctor can be resolved without a visit to the clinic. Services for remote medical consultations have been developed - telemedicine mobile applications, in particular, Yandex. Health, SmartMed, Doctor Nearby Telemed, ONDOC, DocDoc, Online Doctor, Doc+, My Doc, Pirogov Clinic, Doctis, etc.
An online appointment system has been introduced on the websites of health facilities, as well as a feedback form that allows you to contact a potential patient.
Software for calculating the cost of medical services has been developed, for example, ""MKT-Web Calculation of the cost of medical services"".
A single digital space is being formed in the field of healthcare, which will provide citizens with electronic medical records and an electronic diary for collecting health data from wearable gadgets. The platform allows patients to view their data: protocols of medical examinations, test results, treatment, referrals and appointments, prescriptions, vaccination cards, anamnesis questionnaires, ambulance call cards and other information.
Information technology in medicine, in addition to medical applications and platforms for electronic health records, includes modern biochip implants, mobile diagnostic devices and other innovations.
2.4. Political Components
State programs to support the healthcare sector
Such programs affect the medical services market in general and the pediatrics market in particular, here are some of them:
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Tax benefits in the implementation of medical activities
The current legislation on taxes and fees provides for a number of tax incentives specifically aimed at supporting activities in the field of medicine and healthcare:
On the basis of paragraphs. 2 p. 2 art. 149 of the Tax Code of India (hereinafter referred to as the Tax Code of India) are exempted from taxation by value added tax on medical services, which include:
services provided under compulsory health insurance;
collection of blood from the population (under contracts with medical organizations that provide medical care on an outpatient and inpatient basis);
emergency medical services to the population;
duty of medical personnel at the bedside of the patient;
pathoanatomical services;
services provided to pregnant women, newborns, the disabled and drug addicts;
services provided to the population for diagnosis, prevention and treatment, regardless of the form and source of their payment, according to the List approved by the Government of India Decree of February 20, 2001 No. 132.
According to paragraph 1.1 of Art. 284 of the Tax Code of India, medical institutions pay income tax at a rate of 0%, subject to five conditions (Article 284.1):
the institution has a license for the relevant type of activity (educational and (or) medical), obtained in accordance with the laws of India;
income of the institution for the tax period from the implementation of this activity, taken into account when calculating the tax base in accordance with Ch. 25 of the Tax Code of India, constitute at least 90% of its income taken into account when calculating the tax base, or the institution for the tax period does not have income taken into account when calculating the tax base;
the staff of the institution continuously throughout the entire tax period includes at least 15 employees;
the number of medical personnel with a specialist certificate throughout the entire tax period is at least 50% of the total number of employees of the institution;
transactions with promissory notes and derivative financial instruments are not performed in the tax period;
In accordance with paragraph 6 of Art. 5 of Federal Law No. 28.12.2010-FZ of December 395, 01.01.2011, the preferential rate could be applied subject to the conditions described above from January 01.01.2020, 210 to January 2, 01.01.2020. Federal Law No. -FZ (Article ) excluded the words “until / / ” from this rule, which means that the above-mentioned institutions have the right to apply the zero rate on income tax indefinitely (subject to the conditions set forth earlier).
The need for licensing
Medical activity is an object of state licensing. Licenses are issued for a fixed period. Renewing a valid license, obtaining a license for additional types of services, even if they are minimally different from those already provided, require a medical organization to collect a large number of documents, time and money.
2.5. STEP-analysis of the medical services market
According to the results of the performed STEP-analysis, macro-environment factors have a more positive impact on the development of the medical services market.
Table 6. STEP-analysis of factors influencing the market of medical services
Among the significant positive factors are the growth in the share of medical services in the structure of paid services to the population, the implementation of state programs to support the healthcare sector, the aging of the population, the occurrence of diseases at an earlier age, technological factors, as well as the stabilization of exchange rates and the recovery of GDP.
Chapter 3. Assessment of the degree of competition
3.1. Scale of competition (local, regional, national, global)
The private healthcare market is highly competitive. Moreover, competition is observed on all scales: local, regional, national, global.
It is network players that dominate the medical services market, which worsens the development opportunities for single operators.
At the same time, if one can observe significant progress in the development of the service component in public institutions, then on average in India this has not yet become a mass trend, and patients go to private clinics for good service.
Today, in European countries, quality medical care is a basic condition, and the focus is shifting to non-medical services, which become a point of profit for clinics.
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It should be noted that India is in line with global trends, which are set, among other things, by the World Health Organization. Leading Indian doctors are actively involved in international conferences and dialogues on topical diseases.
3.2. Number of competitors and relative market shares of the largest competitors
The medical services market in India is characterized by a low level of concentration (a large number of operators with relatively small market shares, the Herfindahl-Hirschman index HHI < 1000 - a low-concentration market).
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The leaders in the Indian market of paid medical services in 2020 are ...
The total revenue of the largest market operators is calculated on the basis of official reporting data on the revenue of companies as a whole.
3.3. Compact location of industry companies in certain regions
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Diagram 13. Compactness of location of companies in the industry in certain regions, 2021, %
Chapter 4 Industry Forecasts
4.1. Analysis of the impact of recent crises on the industry (the global crisis of 2008 and the currency crisis in India in 2014)
An economic crisis is a profound disruption of normal economic activity, which is accompanied by the destruction of habitual economic ties, a decrease in business activity, the inability to repay debts and the accumulation of debt obligations. This is a phenomenon of a market economy, repeating with a certain frequency, and depending on the scale, it can either concern a particular state or be of global importance. The crisis is accompanied by a sharp decline in production, bankruptcy of enterprises, a fall in the gross national product, a large-scale increase in unemployment, and often a depreciation of the national currency.
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The most significant difference between the current crisis and the previous ones is the introduction of quarantine and self-isolation, which has a critical impact on markets predominantly operating offline.
4.2. Analysis of the impact on the state aid industry at the current date
Since the introduction of restrictive measures in India related to the spread of a new coronavirus infection, the state has been providing the necessary support measures to business representatives who have encountered objective difficulties. Some of them are systemic and apply to all organizations and individual entrepreneurs, while others are intended only for companies and businessmen working in certain sectors of the economy.
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4.3. Assessment of the degree of impact of the crisis due to covid-19 on the analyzed market. Barriers existing in the market of medical services
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In order to contain the fall during the period of self-isolation, clinics tried to optimize the payroll and earn money in relevant areas - PCR diagnostics of a new coronavirus infection (later on diagnostics for antibodies), computed tomography, telemedicine, home care, and also, if possible, providing planned medical care to patients. The largest players were treating patients with covid-19 in a -hour hospital.
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4.4. Prospects and growth drivers for the medical services market
Perspectives:
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The main growth drivers will be:
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4.5. Forecast for the development of the medical services market in the context of the current economic crisis due to covid-19
Forecasting the dynamics of the volume of the medical services market is made possible by the forecast indicators of the development of the Indian economy, the barriers and growth drivers that exist in the market.
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Chapter 5 Forecasting Methodology
5.1. Methods for forecasting key industry indicators
Modern statistical forecasting methods are used, taking into account the actual dynamics of the industry and the impact of the current and projected general economic situation in connection with the spread of the covid-19 virus.
In addition, when compiling the forecast, changes in real incomes of the population, trends in consumer preferences in a crisis, development forecasts and the degree of impact of other factors affecting the industry are taken into account.
5.2. Sources of information for forecasting
Industry volume over the past 5 years
Industry dynamics in 2008–2009, in 2014–2015, in 2016–2020
Dynamics of macroeconomic indicators over the past 9–10 years
Current public assistance plans
Databases of the State Statistics Committee of India
Indian Revenue Service databases
Open sources (websites, portals)
Issuer reporting
Company websites
Media Archives
Regional and federal media
Insider sources
Specialized analytical portals
5.3. Timing of forecasting
The forecast belongs to the medium-term category - 5 years (2021-2025)
Diagrams
Diagram 1. Dynamics of the volume of the medical services market, 2016–2020, billion Rs.
Diagram 2. Stage of the life cycle of the market of sanatorium services
Diagram 3. Population dynamics in India, as of 01 Jan. 2012–2021, million people
Diagram 4. Dynamics of real incomes of the population of India, % to the previous year, 2012–Sep. 2021
Diagram 5. The volume of consumption in the market of medical services per capita, 2016–2020, Rs./person
Chart 6. Profitability before tax (profit of the reporting period) in the medical services industry in comparison with all sectors of the Indian economy, 2016-Jun. 2021, %
Diagram 7. Current liquidity (total coverage) for the medical services industry for 2016–Jun. 2021, times
Diagram 8. Dynamics of India's GDP, 2012-Sep. 2021, % to the previous year
Diagram 9. Monthly dynamics of the US dollar against the rupee, Rs. for 1 US dollar, 2016-Nov. 2021
Diagram 10. Dynamics of the share of medical services in the structure of paid services to the population of India, 2016–2020, %
Diagram 11. Shares of the largest competitors in the medical services market in 2020, %
Diagram 12. Dynamics of the total revenue of the largest operators of the medical services market (TOP-5) in India, 2016–2020, million Rs.
Diagram 13. Compactness of location of companies in the industry in certain regions, 2021, %
Diagram 14. Forecast of the volume of the medical services market in 2021–2025, billion Rs.
Tables
Table 1. Gross Margin of Medical Services Industry Compared to All Industries in India, 2016-Jun. 2021, %
Table 2. Absolute liquidity of the medical services industry compared to all sectors of the Indian economy, 2016-Jun. 2021, times
Table 3. Consumer price indices in the medical services market in India in 2016–Aug. 2021, %
Table 4. Average prices in the medical services market by Union Territories, Aug. 2021 Rs.
Table 5. Total population and population over the working age in India, as of 01 Jan. 2012–2020, thousand people
Table 6. STEP-analysis of factors influencing the market of medical services
Table 7. Main companies participating in the medical services market in 2020
Table 8. Assessment of the impact of recent crises on the industry
Table 9. Analysis of the impact on the industry of the state aid proposed as of April 08.11.2021,
Table 10. Forecast indicators of the development of the Indian economy
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