Health plays a vital role in everything and continues to be the lubricant that smoothens the functioning of everything ranging from mankind to machinery, and finance to industry. India was the sixth largest human healthcare market globally in 2014 with a market value of $81.3 billion, and healthcare spending represented an estimated four per cent of India’s GDP in 2012. The Indian healthcare industry comprises five segments: hospitals, pharmaceuticals, medical insurance, medical equipment and supplies, and diagnostics. The hospital segment comprised about 71 per cent of the total healthcare revenue in India at 2012 estimates.
Healthcare delivery in India has two components: public and private. The public, i.e., the government healthcare system, focuses on addressing primary healthcare needs across India and particularly so in the rural areas. The government also manages secondary and tertiary care hospitals across India. The private sector comprises primarily secondary and tertiary care hospitals predominantly located in metropolitan, tier I and tier II cities. The private sector accounts for almost 72 per cent of India’s total healthcare expenditure.
The Indian healthcare industry is expected to grow at a CAGR of 17 per cent between 2008 and 2020; and by 2020, the Indian healthcare industry is expected to have a market value of $280 billion. The growth in the Indian healthcare industry will be primarily driven by: Socio-economic changes such as growing health awareness, increasing per-capita income, increasing penetration of health insurance, increasing instances of lifestyle diseases and an aging population; technological advancements such as continuing development of mobile technology which will enhance the delivery of healthcare through telemedicine; affordability of healthcare in India which will attract more patients. For example, treatment for major surgeries in India costs approximately 20 per cent less than the cost in a developed country; and Government policies in India that support the growth in the healthcare industry such as tax reliefs on hospitals in tier II and tier III cities, which will attract healthcare investment in these areas.
One of the key factors for the increase in healthcare expenditure in India is the projected rise in income levels. The number of households in India earning more than Rs 0.2 million per annum is expected to increase from around 50 million in 2015 to around 120 million in 2020. The prevalence of cancer in India is estimated to be 3.9 million people in 2015, with 1.1 million reported new cancer cases during the year. The real incidence of cancer in India could be significantly higher than the reported figure. Data from large randomized screening trials undertaken in India suggest that the real incidence of cancer could be 1.5 to 2 times higher than the reported incidence, or an estimated 1.6 to 2.2 million new cancer cases during 2015. Even at this level, the age adjusted cancer incidence per 1,00,000 people in India is significantly lower than that in the United States and China.
The reported incidence of cancer in India is based on data collected from the cancer registries, which cover less than 10 per centof the population, resulting in a significant margin of error in estimation. The gap between reported and real cancer incidence can primarily be attributed to under-diagnosis of cancer in India. The under-diagnosis of cancer is represented in the relatively late stage of presentation of cancer cases in India relative to China, the United Kingdom and the United States.
Data collected between 2009 and 2011 show that only 43 per centof breast cancer cases were diagnosed at early stages (i.e. stage I or stage II) of the disease in India while it is 62 per cent in the United States, 81 per cent in the United Kingdom and 72 per cent in China. While this varies with the type of cancer, the rate of diagnosis in India is generally more delayed compared to other countries.
Lack of awareness of cancer and the lack of participation in screening programs in India are significant contributory factors for the relatively late stage of the disease presentation and consequently low reported cancer incidences in India. Fewer than one per cent of women in India aged between 40 and 69 years participated in recommended breast screening mammograms once in 24 months, as compared to 30 per cent in China and 65 per cent in the United States in 2014.
The prevalence of cancer in India is expected to increase from an estimated 3.9 million in 2015 to an estimated 7.1 million people by 2020. The reported cancer incidences in India are expected to increase from an estimated 1.1 million in 2015 to 2.1million by 2020.
The increase in cancer incidences is primarily driven by the following factors: Demographic changes: Cancer incidence rates increase with age, and particularly so after the age of 50 years. India’s population is ageing, and in particular the population over the age of 50 years is expected to increase from 228 million in 2015 to 262 million by 2020. Demographic factors alone are expected to result in an increase in cancer incidences of 1,00,000 to 3,50,000 cases a year.
Exposure to risk factors: Factors that have been associated with increased risk of cancer including tobacco use, rising alcohol consumption, increasing use of processed food and meat, reduced fibre content in the diet and rising incidence of obesity are anticipated to result in increasing cancer incidences in India. Additionally, increasing levels of air pollution in urban India are also anticipated to result in an increased risk of cancer. These high risk factors are expected to result in an increase in cancer incidences of 3,50,000 to 4,50,000 cases a year.
Narrowing diagnosis gap: Growing cancer awareness, a greater public emphasis on screening and improvements in diagnosis of cancer, are expected to result in earlier and increased diagnosis of cancer. While earlier diagnosis will potentially result in lower mortality rates, it is also expected to result in increased reported cancer incidence rates in the next five years.
The profile of cancers in India is also changing, and is becoming more similar to that seen in more urbanised and higher income societies. For instance, in 2,000, the most prevalent cancers in India were head and neck cancers in men (associated with all forms of tobacco use) and cervical cancer in women (associated with human papillomavirus infection and poor female sanitation). Breast cancer has currently surpassed cervical cancer as the most prevalent cancer in women. The incidence rates of gastrointestinal cancers, which have traditionally been low in India in comparison to developed nations and China, have also shown an increasing trend.
The annual expenditure in India for the diagnosis and treatment of cancer is estimated to be between $1.7 and $2.0 billion as of 2015. Even at for-profit hospitals in India, the cost of cancer care including treatment with advanced technologies represents only a fraction of the cost of treatment in the USA, even after adjusting for purchasing power parity. Even though the cost of cancer treatment in India is significantly lower than the USA, high quality cancer care is still unaffordable and inaccessible to a large proportion of the Indian population due to low population coverage of public and private insurance programs and low average household income levels.
Meanwhile, Healthcare Global Enterprises Limited (HCG, headed by Dr B S Ajaikumar, Chairman & CEO, launched its IPO of fresh issue of 11.6 million Equity shares and Offer for Sale of upto 18.2 million Equity Shares – totaling 29.8 million shares – from March 16 to March 18 at Rs 205 to Rs 218 per share totaling Rs 649 crores.
Pointing out about 1.1 million new cancer cases being reported and about 2.1 million others likely to occur in next few years, he said HCG’s primary concern is to make cancer care available through its 14 cancer centres in India that are seeing 37,000 patients annually. “A woman from Kenya, who had throat cancer, was successfully treated and is able to sing today, while a 104-year-old woman was also cured by us. While I was practicing as an oncologist in the USA, it pained me to learn about the cancer patients in India and I returned to India in 2003-2004 to introduce and integrate technology under one roof for cancer care. Cancer patients want good outcome and global standards, and we have 12 new centres coming up in the next 18 months. We have the largest group of oncologists (219) in India and who are also shareholders.
Our revenue was Rs 5,242 million for FY2015 and about 20 per cent of our revenue in Bangalore came from international patients. We are looking to expand from India to underserved areas of Africa (which has 1.1 billion population) but our initiative in Africa does not include the use of IPO funds. Our focus is to have a one-stop-shop for patients to get dedicated care and treatment. We are presently providing diagnostic therapy, surgery, oncology, radiation etc. We also have centres with daycare and self-caring sections, where patients coming in from long distances can stay, take treatment and go back home. It is very important that a cancer patient come home to their own beds and sleep there as cancer care takes years. Today’s lifestyle changes are responsible for growth of this disease. We recently exited from the Nanavati Hospital in Mumbai and did not have any investment there.
We are having two new cancer centres coming up in Mumbai, and therefore did not need to be in Nanavati Hospital. We are planning to use Rs 170 crore to strengthen our IT infrastructure. Next Gen Sequencing is very important in identifying actionable genes, resistance level etc. While cancer is an enigma and complex disease, the mortality rate has come down significantly. We have R&D labs and several Ph.Ds working in it,” Dr Ajaikumar added.
Lack of adequate infrastructure and absence of mass screening programmes are key barriers to timely diagnosis in India. As of 2014, there are only 2,700 mammograms installed in India or one per 2,20,000 women, as compared to one per 10,000 women in the USA. Also, as of 2015, there are 121 PET scanners installed in India, around 50 per cent majority of which are in metropolitan cities. PET-scanners are essential for accurate diagnosis, staging and response monitoring of cancer and are therefore critical to providing comprehensive cancer care. As of 2014, only 30 per cent of the cancer centres in India have advanced imaging technologies such as PET-CT. an estimated 2,00,000 to 2,50,000 PET-CT scans were carried out in India in 2014, compared to over 4,00,000 in China in 2012 and approximately 1.6 million in the USA in 2014. PET-CT scans use a radioactive material, Fludeoxyglucose (FDG) which is manufactured in a cyclotron and has limited shelf life, making it difficult to transport to remote locations. As of 2015, India has only 15 cyclotrons, all of which are located in the metropolitan cities.
As of 2014, India has only 200 to 250 comprehensive cancer centres which provide diagnosis,
treatment and post-treatment care at a single location, which represents one per six million people, as compared to one per 0.2 million in the USA. An estimated 40 per cent of these centres are located in eight metropolitan cities and fewer than 15 per cent of these centres are government-operated, which limits access to advanced and multimodal treatment options available to cancer patients and as a consequence the majority of cancer care is expected to be provided by the private-for profit sector in India. India needs at least 450 to 550 comprehensive cancer centres by 202, with a high proportion of such centres in non-metropolitan cities and towns. In addition, there is significant shortage of oncologists in India, which has only one oncologist per 1,600 cancer patients, as against one per 100 cancer patients in USA as of 2014.