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Healthcare sector must employ self-regulation

Dr Pralok Gupta, Associate Professor (Services & Investment), Centre for WTO Studies, Indian Institute of Foreign Trade, feels that healthcare services both in India as well as in global market have expanded well in the recent past. But he also opines that India has competitive advantages in both Mode 1 and Mode 2, which it needs to effectively leverage.   

TPCI: What are your views on the growth trajectory of India’s healthcare services and medical tourism market?

Dr. Pralok Gupta: From the export perspective, it has shown a significant growth particularly in the last decade, owing to a number of factors. One is that we have state-of-the-art hospitals here providing a number of hospital services at much reduced costs as compared to developed countries. Sometimes, the costs aren’t even one-tenth. A number of treatments like kidney transplant, liver transplant or sometimes heart ailments, etc are at a much lower rate as compared to both developed countries and some of our competitor countries in the Asian region like Singapore, Thailand. 

The biggest drivers of growth are lifestyle-related diseases; the way we have different environmental issues like we have pollution in Delhi or the sedentary lifestyles. So the number of diseases are increasing, which leads to expenses on healthcare services, whether it is domestic or foreign. Since we are having more patients in India, we have to take into consideration that wherever we are talking about the healthcare services exports, it should not result in reduction of healthcare services for domestic patients.

Lifestyle and sedentary lifestyles are applicable to them (medical tourists) also. A major driver is the cost, because we are providing the services at much lower cost and also have a number of cases where we have successfully done many complex surgeries and medical treatments at a much lower cost. There is still some perceptual difference in the quality, so a treatment in US versus treatment in India – they consider it as a difference, but the cost difference is not commensurate with that difference. So, they prefer to come to India.

TPCI: According to you which sector within healthcare services should India focus on to reap maximum benefits.

PG: One area ignored relatively is that of paramedical and related technicians, because there are no clear cut regulations governing the qualification of these personnel. Accordingly, they are relatively difficult to absorb in the Indian market as well as export to overseas markets. If we have good systems for their qualification and recognition of qualification, this has significant potential; because in a hospital, there may be only 10 doctors, but there will be fifty paramedical personnel or maybe more involved.  So, if we focus on this sector, then it will create more employment opportunities. Also if we have good qualifications, which are recognized maybe with the FTA partner country or with other countries; if we can have MRA with those countries, then we have a good potential to send to overseas markets also. So it has advantage from both domestic as well as the export purposes.

TPCI: What are the key challenges for Indian healthcare services exports and medical tourism market?

PG: An important challenge for medical tourism is again the perception bias. When a number of foreign patients are coming, there is the involvement of touts, which reduces the experience of foreign patient;s so that is very important. SEPC has done some work in this domain. They have a healthcare portal to give an idea of different hospitals, what kind of treatment they provide, an indicative cost, etc. So, the Government of India has taken certain steps, but still this is a major area; because how we penetrate overseas markets is very important. So, it requires both the aggressive marketing of our services which we are providing and also there should be some kind of uniformity or consistency in different kinds of treatments.

It should not be that one hospital is providing one kind of treatment in Rs 2 lakh and the other one is providing in Rs 10 lakh. That creates a mismatch. There has to be some premium for some quality but if there is so much difference, it will affect perception and create some kind of confusion in foreign patients. So maybe some kind of indicative list or regulations should be there to facilitate foreign patients, so that they have a good experience during their visit.

Another challenge is that land cost is very high; so whenever you want to build any hospital, the major cost is land cost and of course the equipment cost. We have significant dependence on imports for our equipment, so that is much costlier. In fact this is the reason why we have 100% FDI in healthcare services I think since 2004 onward and still there is no major investment in health services.

TPCI: Who are the major competitors for India in the healthcare domain? What are India’s competitive advantages apart from cost?

PG: Singapore and Thailand are the major competitors of India in healthcare services. These two countries are providing treatments almost at the same rate, maybe slightly higher than India but at the same time, perception of the quality is a bit higher. The quality may be the same but that’s the perception. These countries are also focusing on foreign patients whereas all other countries in this region are not.

Regarding our competitive advantages, one of course is that our healthcare professionals have the expertise; we have very good doctors, their qualifications and skills are recognized worldwide. Even in US and UK, there are many Indian doctors. So, one most important competitive advantage is that we have very good human talent resource. Apart from that, we also need to project as a package. Some patients are coming for critical ailments. But some are coming for treatments like cosmetic surgeries. For those kind of patients, we have to provide as a package. There are a lot many things to see in India. For example countries like Sri Lanka and Myanmar are mainly Buddhist countries. We have to tell them that while you are coming in India, you can also visit religious and other places as well.

TPCI: How can government and industry collaborate to promote the sector internationally and facilitate growth?

PG: My opinion is that the industry should come up with some self-regulation. Worldwide, even from developed countries, many of the industries believe in self-regulation. This initiative can be taken by the Government of India to collaborate with major hospitals chains or healthcare service providers to develop self-regulation. Of course certain regulations have to be there but beyond that the industry will feel that the government is putting many regulations and no freedom for business. 

One important thing is of course trade fairs, i.e. providing information about our services in foreign countries. We also have a global exhibition for services each year in which healthcare is an important aspect. 

TPCI: What are the key markets where India has the highest potential for medical tourism?

PG: One set of markets of course is African countries like Kenya, Ethiopia and Nigeria. These countries have good purchasing power. The second is India’s neighbouring countries like Pakistan, Sri Lanka, Bangladesh, etc. Also we should also try and tap the Indian diaspora market. They have linkages with India, so, when we are providing good services they will always think of coming to India, meeting their relatives, etc. Some kind of psychological emotional connect with India is also very much required for various treatments.

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Rabia Khatun
Rabia Khatun
1 year ago

Nice piece of discussion on healthcare services in India. I think this type of discussion also needed in the financial services trade, as the financial services sector is the most important sector for any economy.