'Healthcare sector likely to hit $155 bn revenue by 2017'


Observing that government spending in healthcare as a percentage of GDP was lowest at the global level, the report said: "In Union Budget 2012, the government has decided to increase its healthcare expenditure to 2.5 per cent of GDP by end of 12th Five Year Plan from the current 1.4 per cent".

Some of the strengths of the sector in the country are high quality healthcare at competitive prices and increase in awareness in Tier-II and Tier-III cities.

However, shortage of trained medical personnel,high capital intensive nature, inflation and rising costs were some threats for the industry, it said.

The weaknesses were retaining and training nursing and clinical staff and inadequate reach of health care services in rural areas, it said.

Taking a cue of the opportunity in the industry, the study said India would witness a large number of mergers and acquisitions in the pharmaceutical and healthcare in 2012 as several companies were "bullish" on acquiring companies in this space. Some recent acquisitions include Fortis Asia Healthcare acquiring Fortis Healthcare International for USD 665 million, Abbott acquiring Piramal Healthcare for USD 3,720 million and Daiichi Sankyo acquiring Ranbaxy Laboratories for USD 4,539 million.

The sector would continue to offer investment opportunities in increasing bed capacity and to medical technologies and diagnostics in Tier-II and Tier-III cities.

"The preferred model is hub and spoke model. Through experimentation it has been found that the best specialty and super specialty hospitals as hub in the metros and tertiary and primary hospitals as spokes in rural areas", it said.

Speciality sectors like cardiology, neurology and joint replacements are likely to attract most investment in bigger cities.

On the outlook for the industry in India, it said: "Due to demand-supply mismatch, there is enormous potential for growth in Central India followed by the eastern and North-astern region".

... contd.

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