A CII-Mckinsey study on ‘Health in India’ published recently claimed that India’s total healthcare spend is likely to touch a whopping Rs.200,000 crore (US$ 44.9 bn) by 2012. Fueling this rise are India’s economic buoyancy, its changing demographic profile, increasing lifestyle diseases and rising medical expenses.

Healthcare is one of India’s largest service sectors, and given the appropriate regulatory support and clearer roles for public and private healthcare delivery, revenues from the sector can reach 6.5 to 7.2 % of GDP from the current 5.2 %, while direct and indirect employment can almost double from the current 4 mn people.

The report also suggested that the sector needed to invest as much as Rs.100,000 crore to Rs.140,000 crore (US$ 22.5 bn to 31.5 bn) in infrastructure and cost-effective facilities to meet the growing demand. With Government spend limited to 0.9 % of the GDP, almost 80 % of the essential investment will have to come from the private sector.

Private healthcare will continue to be the largest component in 2012 and is likely to double to Rs.156,000 crore (US$ 35.1 bn). Of this outpatient care accounts for 61 % of private healthcare spending, primarily spent on acute infections like fever, diarrhoea and gastrointestinal disease. In-patient spending is concentrated on groups like cancer, heart disease, accidents, acute infections and injuries. In-patient spending is however expected to increase to 47 %, driven by rise in lifestyle diseases such as cancer and cardiovascular disease. While outpatient spending will decrease in terms of share it will also increase in absolute terms to Rs.74,000 crore.