Healthcare is one of the largest sectors in India with a current size of US$ 159B in 2019. In the last decade, the Healthcare industry has changed significantly and gone beyond just doctor-patient interactions. Top 5 trends in the Indian Healthcare sector in 2020 are going to be driven by increasing the use of technology in the space and its impact on improving efficiency and reach.
Patient health records to enable value-based care
Healthcare is moving towards the collection of data to improve healthcare outcomes. At present, Electronic Health Record (EHR) adoption in India is slow but growing and is expected to grow faster in 2020. The Indian Government is also proposing to develop Health Information exchanges in India to improve the quality of treatment. The use of EHR will enable in providing quick care and allow to make good decisions. EHR adoption will benefit all stakeholders including patients, doctors, providers and insurers allowing monitoring of the efficiency of Healthcare procedures and bring down the overall cost.
Wearables enabling preventive care and driving awareness
In the second quarter of 2019, the Indian wearable market grew at 30.9% Q-o-Q and 123.6% compared to the same quarter in 2018, as per PGA Labs research. There were about 3 million wearables shipped, making India the third-largest market after China and the US. The use of wearable devices is expected to transform Indian Healthcare enabling a shift from reactive care to preventive Healthcare. Wearables would enable people with health conditions that require frequent monitoring to track major health indicators. Patients can also share their data with their doctors, improving overall Healthcare outcomes for patients.
Smart procurement to drive cost efficiencies for small and mid-tier hospitals
Healthcare providers' focus on value creation is shifting towards optimizing costs. One such cost head is the cost of drugs and consumables which account for nearly 30% of the overall operating cost of hospitals. There are several ways smart procurement can be leveraged to optimize this cost head:
- Use of aggregators: Use of aggregators for procurement of consumables allowing reduced effort on procurement. Online procurement can be leveraged specifically by small and medium hospitals which do not have a formalized procurement process and team, and thereby, end up paying comparatively higher rates.
- Group purchase organizations: Group purchase organizations – GPOs are virtual business entities incorporated to consolidate procurement of different buyers. Collective bargaining power of different buyers allows GPO to negotiate with different suppliers and discover better prices. It is seen that small and medium hospitals that subscribe to annual GPO based procurement can reduce their operating costs by 6 to 8%.
- Data analytics to manage inventory: Currently, in small to medium hospitals, procurement is not sophisticated and involves usage of very limited technology. In near future use of analytics-driven tools which help in tracking inventory levels and deciding procurement quantity is likely to pick pace.
Blockchain to play a larger role
The Healthcare blockchain market is expected to grow at a CAGR of 65% between 2018–2025 to reach US$ 1.6B in 2025 from US$ 48.2M in 2018. There is a reason for driving this growth. Globally, hospitals are estimated to do more than 30B transactions within their internal and external networks every year. The average cost per transaction is estimated to be around US$ 8.3, which means, hospitals end up spending around US$ 250B a year. As hospitals of tomorrow become leaner and smarter, they need to find a solution to smartly manage their transactions and build trust within their network and between stakeholders. However, many have issues in managing information and data they capture every day.
Blockchain in healthcare can unlock the true value of interoperability and help build trust between all stakeholders involved, including patients. To weed out frictions and leakages in the trusted network and optimize the cost of transactions, blockchain can leverage disintermediation and real-time processing to achieve the desired outcome. The tech can help hospitals to consolidate and synchronize multiple patient identifiers through a distributed framework and standardize data inputs enabling real-time updates across partner networks while protecting patient identity. For patients, blockchain has the potential to enable secured data sharing of their disease profiles, enabling longitudinal studies and improve outcomes of treatment given to them. Blockchain has a solution for everyone.
As the care delivery integrates, it is only pertinent for hospitals to imbibe blockchain today and enjoy the transition through synergies it brings.
Focus on asset-light, cost-efficient specialty Healthcare models
Growth capital is focusing on asset-light and cost-efficient specialty Healthcare models. Single specialty hospitals are preferred over generic patient care due to better usage of capital and ease of scaling because of economies of scale and superior therapeutic focus. An asset-light model Healthcare provider does not own the land and the building which reduces its capital expenditure and requirement for low investment for expansion. The asset-light model also allows the property owner to generate a 15-18% yield on its investment.
Thus, in 2020 the Healthcare sector is likely to enable a shift to value-based care reducing the cost of Healthcare delivery. This value-driven Healthcare is expected to have a better patient outcome, increased ROI for providers and insurers and none the less will incorporate superior data-driven support for policymakers.
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Authored by (at the time of writing):
Aryaman Tandon, Leader, Healthcare Practice
Dr. Anuj Gupta, Member, Healthcare Practice