Dr Suresh Kuppuswamy, Head – Mass Wellness, Skanray Technologies, outlines the growth of radiology business in India and predicts the opportunities which will emerge in this sector in the times to come
Healthcare, one of the fastest growing sectors in the country, is poised to reach $200 billion by 2018, driven by increasing expenditures on health by both the private and public sectors. Rising income levels, increasing awareness on health and insurance penetration are seen as the key drivers of the Indian healthcare industry. Currently, the estimated spending on healthcare is around five per cent GDP and it is expected to remain at the same level until 2018.
The story of double digit growth rates and access to the best global treatment practices masks the striking disparity between the rural and urban healthcare. While the urban areas are clogged with small clinics, nursing homes and tertiary care hospitals, the rural segment, where 70 per cent of the population resides, find it difficult to have access to basic primary care. The quality of care accessible in urban areas of India compare with the best of the world. Renowned tertiary care hospitals lay claim to the best and the latest medical equipment to affirm their international outlook. In contrast, patients in rural areas travel several kilometres to get a simple chest X-ray or liver function test done. As much as 70 per cent of the payments for healthcare services is paid out-of-pocket (OOP) by the patients, thereby significantly denying access to most diagnostic procedures.
Radiology market: Brimming with potential
The market can be categorised into four main segments as private hospitals, medical colleges, government hospitals and diagnostic centres. While the government readies itself to permit 200 medical colleges to open in the next 10 years and cover the shortage of doctors, a significant portion of the demand for radiology products is expected to contribute to this segment.
Increasing number of small private hospitals in tier-II cities and towns are the other major contributors to this projected growth. Radiologists-cum-entrepreneurs who were running large number of standalone imaging centres in the past used to be at the forefront of technology adoption and flaunt the latest in imaging technology. But recently, this sector has started witnessing signs of consolidation with some large players starting to look beyond the established of markets of tier-I cities for their expansion and growth. Focus on return on investment in these diagnostic chains would drive the demand for imaging equipment which are affordable. These machines would offer just good enough specifications yet would come with options for an upgrade in the future. The demand for high-end specification devices from this segment will be subdued as compared to in the past.
Growth of CT and MRI
The rural-urban gap in the primary healthcare scenario exists where access to diagnostic imaging is concerned as well. This divide is extensive in speciality investigations such as CT and MRI. Shortage of radiologists and capital intensive CT and MRI equipment are the two main factors that hamper the penetration of diagnostic imaging centres into the hinterlands. While shortage of radiologists haunt even the developed world, many Indian companies have been pioneers in providing teleradiology solutions to resolve this problem. Increase in the scale of domestic demand will definitely turn attractive for these home-grown teleradiology companies and should help in tiding over the radiologists’ shortage crisis over the next decade. But unless CT and MRI scans are made affordable, their access to majority of the population will remain elusive.
The newer models for enabling access seems to be driven by business innovation rather than by technological innovation. Large government hospitals with a significant demand for CT and MRI investigations have outsourced the imaging functions to private companies thus de-risking themselves from high capital requirements, high maintenance costs and technological obsolescence. The medical device manufacturers have started offering pay-per-use and leasing options for their CT, MRI and packaged solutions to cater to the new private hospitals that are PE-funded and highly influenced by the asset-light business model.
Progress of ultrasound
Ultrasound remains the pillar of imaging investigations even today. While the technology itself has undergone several advancements and refinements, the potential benefits of this in the Indian healthcare landscape will be highly muted because of the regulatory curbs restricting the use of ultrasound by only registered practitioners. The existing norms of Pre-Conception and Prenatal Diagnostic Techniques (PC & PNDT) Act have ensured that portable ultrasound technology is not explored to its maximum potential in its point-of-care applications, while it has become a norm in most other countries.
not a bottleneck in the process of delivery. However, the concept of a sonographer is practically impossible in India with the current restrictions . It is surely an impediment when it come to improving access of this technology to a larger section of the society. Technology can itself be the tool for automated monitoring and widen the range for ultrasound applications. Ultrasound experts opine that developing ultrasound scanners that record each and every sonogram and stores them in a central repository for scrutiny when required will ensure voluntary compliance and make it much easier to automatically peruse all ultrasound tests. This, in turn, will eliminate the restrictions on its use in other specialities.
If a more practical method of monitoring and scrutinising is brought under the ambit of the PCPNDT Act, then the market potential for ultrasound will rapidly multiply several times from the current level.
X-rays
X-ray technology in India is a couple of decades behind than our global counterparts, with most of the hospitals still using outdated two-pulse technology. The imaging industry across the world has moved on to the next generation DC technology which comes with demonstrated benefits on leakage radiation and image quality but the price-conscious Indian industry is yet to make this shift. The entry of manufacturers such as Skanray have addressed both these issues with an element of innovation. The DC X-ray systems from Skanray not only rank higher in their safety parameters and performance but are highly affordable as well.
The demand for mobile X-ray systems will mainly come from the nursing homes and smaller hospitals as well as the ICUs and emergency wards of the larger hospitals. The demand for fixed X-ray systems, though not as high as that for the portable systems, will be driven by medical college hospitals and large hospitals. The market is also witnessing a shift from the conventional film-based systems to CR and DR systems driven by the need to enable teleradiology practices in hospitals. Integrated mobile CR and DR solutions seem to making their way into small clinics, ICUs, OTs, emergency rooms and ambulances. Affordable retrofit DR solutions are increasingly driving the market towards embracing digital X-ray solutions.
Companies like Skanray are differentiating themselves in the market by providing products with maximum performance, low total cost of ownership and extensive service capabilities which are the key parameters that the customers are looking forward from their association with device suppliers.
Emerging business models
Large private hospital networks with their cumulative strength running into several thousand beds, find it almost impossible to manage their medical equipment purchase and maintenance. This has given rise to healthcare technology management organisations (HTMOs) which specialise in equipment lifecycle solutions and maintenance to ensure that there is minimum downtime and with a plan in place to de-risk the hospital from technological obsolescence. Large private hospitals will gradually move to this model and the HTMOs will gain in strength to play a significant role in the healthcare technology marketplace.
Increasing financial pressure on hospitals, consolidation in the industry and active professional healthcare management personnel are factors which highly influencing the way purchasing decisions are taken. Stress is being laid on not just the cost of purchase but also on the cost of maintenance and obsolescence risks. Brand image is no longer the only deciding factor and the companies which address the concerns of the hospital industry are emerging as preferred suppliers. Agile companies with lower overheads and significant advantages in R&D costs are perfectly positioned to seize this
massive opportunity to create a mark for themselves in a market
that once shied away from thinking beyond a few MNCs.