Healthcare Management

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Slide 1: Healthcare in India The Indian Healthcare Scenario • Current Scenario • Major Players • Future Outlook Vaatsalya.com

Slide 2: The Social Burden Vaatsalya.com

Slide 3: The Indian Healthcare Market India Spends US $ 22.7 Billion On Healthcare * Vaatsalya.com Source: National Accounts Statistics 2001; McKinsey analysis

Slide 4: Healthcare Market (2005 vs 2025) Healthcare is the third largest growth segment in India * Vaatsalya.com Source: National Accounts Statistics 2001; McKinsey analysis

Slide 5: Healthcare : Demand & Supply 90 % patients need primary and secondary care Vaatsalya.com

Slide 6: Global Healthcare Infrastructure Nurses Beds Physicians Countries Per ’000 population Per ’000 population Per ’000 population Distribution is skewed towards Urban/ Metro Areas 0.9 1.5 1.2 India 1.6 1.5 1.0 Low income (e.g., sub-Saharan Africa) 1.9 1.8 4.3 Middle income (e.g., China, Brazil) 7.5 7.4 1.8 High income (e.g., US, Western Europe) 1.5 3.3 World average 3.3 Total expenditure in India as percentage of GDP : 5.0 (2004) Vaatsalya.com

Slide 7: Sectorwise Distribution Direct employment Revenues/GDP Sector Million, 2000-2001 Per cent, 2000-2001 4.0 5.2 Healthcare 5.3 4.8 Education Healthcare is the largest service 1.0 3.5 Retail banking industry in terms of Power 1.2 3.0 revenues and the second 1.6 1.8 Railways largest after education in 0.8 1.4 Telecom terms of 1.7 0.9 employment Hotels, restaurants 0.4 1.7 IT By 2012, the Healthcare sector could account for 7- 8% of GDP and provide direct and indirect employment to 9 million Vaatsalya.com Source: National Accounts Statistics, 2001; Manpower profile; CBHI; McKinsey analysis

Slide 8: Healthcare Spectrum Vaccination Preventive care Check-ups Heath camps For Minor ailments Out-patient care For Major ailments Medical In-patient care Surgical As economy improves, greater stress on preventive care Vaatsalya.com

Slide 9: India Prefers Private Providers Private expenditure as % of total expenditure on health : 82.7 (2004) Vaatsalya.com Source: CII-McKinsey Report, 2002

Slide 10: Public and Private Sector India will have the largest number of diabetics in the world in next 3 years Vaatsalya.com Source: NSSO, 52nd Round

Slide 11: The Current Status Of Healthcare RURAL (per 1000 population) URBAN (per 1000 population) Hospital Beds = 0.2 Hospital Beds = 3.0 Doctors = 0.6 Doctors = 3.4 Public Expenditures = Rs.80,000 Public Expenditures = Rs.560,000 Out of pocket = Rs.750,000 Out of Pocket = Rs.1,150,000 ____________________ ____________________ IMR = 74/1000 LB IMR = 44/1000 LB U5MR = 133/1000 LB U5MR = 87/1000 LB Births Attended = 33.5% Births Attended = 73.3% Full Immunz.=37% Full Immunz.= 61% Median ANCs=2.5 Median ANCs=4.2 Out of pocket semi-urban and rural expenses higher than Urban Vaatsalya.com

Slide 12: Healthcare trends in India Unorganised sector Organized sector Curative Preventive Out of pocket payments Insurance or employer paid Doctors concentrated in urban Increasing competition in urban areas areas Travel to urban areas Need of timely treatment Lack of systems & Increased emphasis on systems & accountability accountability Driven by supply Driven by demand No quality check on service Consumers demanding quality Large Infectious Disease Load Addition of a Large Diabetic Population – largest in the world India Diabetes Prevalence: 31,705,000(2000) 79,441,000(2030) Vaatsalya.com

Slide 13: Drivers of Growth Health Insurance penetration Increasing disease burden – lifestyle diseases Awareness of healthcare and preventive care Employer provided healthcare Community based health plans Increasing health awareness, Increasing spends on health Vaatsalya.com

Slide 14: Health Insurance Private Health Insurance to cover 20% to 25% by 2020 Vaatsalya.com

Slide 15: The Demographics Middle Income Class in India to grow to 400 to 500 Million by 2015 Vaatsalya.com

Slide 16: Healthcare – Urban vs Rural Healthcare services one of the fastest growing segment in India Vaatsalya.com

Slide 17: Major Players Clinics & Nursing Homes Charitable Trusts • Single doctor or family of • Multispeciality hospitals run by doctors religious or social groups • Good local network and word of • Standard of care is driven by mouth clientele individual doctors • Limited range of services and • Subsidised pricing offset by facilities donations • Sub-optimal facilities Government Hospitals Organised Sector • Ill equipped to provide efficient • Very few players in this sector healthcare • Regional in focus, usually • Unavailability of appointed offshoots of tertiary players doctors and hospital staff • Most current players are Urban • Not favoured by semi-urban Centric populations • Standard of care is abysmal Healthcare services is highly unorganised segment in India Vaatsalya.com

Slide 18: Huge Growth Potential US $ IN BILLION at 2000-2001 prices 60.0 51.0 17.0 43 8.0 8.0 43.0 19 43.0 Government 3.76 35.0 spending 15.24 Private spending 2012 2012 2012 2001 Scenario 3: Scenario 1: Scenario 2: Baseline with insurance Baseline with insurance Baseline increase and high government in private spend in middle class Government spending Key Assumption* 1% GDP 1% GDP Spending 2% GDP Majority of the spending in Private Sector Vaatsalya.com

Slide 19: Healthcare Services Growth Healthcare services – expected CAGR of 11 to 13% Vaatsalya.com

Slide 20: The Market Opportunity The Indian Healthcare Delivery market is estimated at US$ 18.7 billion. Nearly 65 % of the healthcare services market has been captured by the private sector. The industry is growing at about 13 % annually and is expected to grow at 15 % over the next four to five years. A recent CII - McKinsey & Co. study forecasts growth from US$ 18.7 billion to around US$ 45 billion – equivalent to 8.5 % of GDP by 2012. Private healthcare is expected to account for 75 % of this spending McKinsey : Rural healthcare will account for half of the total consumption Vaatsalya.com

Slide 21: Share of the wallet McKinsey : Healthcare share of the wallet in India will be very close to China. Vaatsalya.com

Slide 22: Investment in India (Estimates) Healthcare 23-32 Investment needs of the healthcare Power 99-131 sector are comparable to other infrastructure sectors Telecom 41-53 25-35 Roads Healthcare in India will grow at 10.8% annually to reach USD 190 billion Vaatsalya.com

Slide 23: Who is Vaatsalya? Vaatsalya is a corporate healthcare network focused on providing affordable, efficient and sustainable healthcare service to semi-urban & rural areas and was founded by two physicians Dr. Ashwin Naik and Dr. Veerendra Hiremath in late 2004. Vaatsalya intends to eliminate the gap in healthcare access by creating India’s first network of hospitals exclusively in semi- urban and rural areas and bringing urban healthcare facilities and services to non-urban areas. More than 70% of India lives in Semi-Urban and Rural India 300 Million Middle Income families Vaatsalya.com