With high levels of demand for health care, but difficulties for consumers in gaining access to it, the challenges facing India’s health-care system are not too dissimilar to those of other emerging markets. However, India has come up with its own particular ways of dealing with these common challenges. In this blog, we look at whether the solutions it has developed to tackle overwhelming patient demand can provide valuable insights for more developed markets.

India’s ailments

India’s expenditure on health care is well below that of large Western nations such as the US and UK, but has also lagged its largest emerging-market neighbour, China.

Unlike developed markets, India has a limited primary care system which poses many challenges to health-care delivery. Much like other emerging markets, it struggles with a twin-track health-care conundrum: how to fulfil both urban and rural requirements.

While rural India tackles common communicable diseases, such as diphtheria and tuberculosis (which can often be related to poor nutrition and sanitation), urban areas generally contend with lifestyle illnesses such as diabetes and heart disease. The number of diabetics in India is expected to grow from 69 million in 2015 to 123 million by 2040, a rise of 78%, according to BMI and the International Diabetes Federation.[1]

What can we learn from India?

The challenge of tackling these separate issues has dictated much of India’s health-care development. There are certain health-care areas where India clearly excels, such as the ability to deliver products or services more efficiently or at a lower cost.

India is renowned for its chemical engineering expertise, and that expertise has led to a vibrant export market in the production of generic medicines. However, some of the more interesting and pioneering health-care areas in India are in service provision. Necessity is the mother of invention, and in India the focus is often on enabling doctors to perform operations more efficiently and with fewer resources. This helps to improve overall patient access, and attracts medical tourists from the surrounding region who seek affordable but high-quality health care.

With fewer primary care practitioners, there has, for example, been more focus on the development of mobile rural units that can travel to patients, and active vaccination programmes which target specific diseases. India has made use of remote doctor access by employing telemedicine, which was introduced there in the late 1990s – much earlier than in more developed markets. With limited hospital beds per head of population, the government has also been happy for private companies to take the lead in this area, and regulation has been more obliging as a result.

As we face a future where absolute spending on health care is expected to rise in almost all global markets (as the chart below shows), many of the solutions as to how to address lower-cost health-care provision more effectively may well emanate from markets such as India.

Global health-care expenditure and future projections in USD billions, as % of GDP

Source: BMI forecast, World Health Organization, 29 June 2017

 

[1] https://www.idf.org/our-network/regions-members/south-east-asia/members/94-india

 

 

This is a financial promotion. Any reference to a specific country or sector should not be construed as a recommendation to buy or sell investments in those countries or sectors. Please note that holdings and positioning are subject to change without notice. Compared to more established economies, the value of investments in emerging markets may be subject to greater volatility, owing to differences in generally accepted accounting principles or from economic, political instability or less developed market practices.

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