MUMBAI: The health care sector is expected to witness an annual revenue growth of 12-14 per cent over the next five years due increasing medical tourism and higher health insurance penetration, rating agency ICRA said.
“India has seen an increase in inflow of international patients, mostly from developing countries in South Asia, Africa and the Middle East. Most commonly availed treatments by foreign patients visiting India are complex and high value procedures. For the large hospital chains the revenue from international patients has grown at the rate of more than 20 per cent over the last three years,” ICRA said.
ICRA expects annual revenue growth of 12-14 per cent over the next five years in the health care sector, in line with the trend in the last three years.
“India has significant cost advantages in medical tourism as treatments here can be done at 60-90 per cent of the cost of such procedures in the US. The medical tourism sector has been growing at the rate of more than 20 per cent and is expected to continue to grow at the same rate, thus doubling in size by 2021,” said ICRA Senior Vice-President and Group-Head, Corporate Ratings, K Ravichandran.
He said, the recently approved liberalised medical visa regulations by the government allowing a 60-day stay (against 30 days earlier) and triple entry (against single entry earlier) will further boost the industry.
“This will create opportunities to hospital chains in India, particularly to large players in metros and tier-I cities,” he added.
The key factor which deters patients from developed economies in America and Europe from visiting India is availability of affordable options closer to home, primarily in Mexico, Turkey, and Portugal, ICRA said.
ICRA opined that India’s cost advantage is more appealing for developing nations, where healthcare facilities are inadequate.
“These trends are also reflected in the profile of source countries, which are mostly from the developing nations in South Asia, Africa and the Middle East. Due to inadequate healthcare infrastructure and long waiting periods, few developing countries also support overseas travel for medical treatment. India is a beneficiary of the supportive policies of these countries, because treatment costs here are one of the lowest,” ICRA said.
It said Indian hospital chains, through direct marketing campaigns in source countries, forge tie-ups with local partners for travel and treatment services, enabling increased patient flow.
According to ICRA’s Vice-President and Sector-Head, Corporate Ratings, Shubham Jain, “On the supply side, India currently faces a significant shortage of beds and limited government investments. This provides private sector players with an opportunity to step in to fill the gap.”