Global Business School & Research Centre

Tathawade, Pune
MBA SEM II- 2019-2020
SECTOR ANALYSIS REPORT ON HEALTHCARE SECTOR

Submitted On 30/04/2020

Submitted by Under The Guidance of

Mithilesh Fredericks
G-16 Dr. SNEHAL MAHESHKAR

Group Members: MBA 1 Year DIV and Rollno

Kanchi Dhiroliya G-15
Hemangi Seth G-17
Purva Joshi G-18
Jyotsna Pathak G-19
Pradyna Kakade G-20
Kamlesh Prajapat G-21
Mahak Khosla G-22
Meenakshi Kalbande G-23
Muskan Gupta G-24
Mayur Nawale G-25
Neha singh G-26
Noyel Dey G-27
Palak Patel G-28
Industry Overview:
Healthcare sector of India is expanding at rapidly. Total number of hospitals, clinics per
1000 of population is lowest in India as compared to other developing and developed
countries. Multinationals such as Apollo, Fortis, Birla Hospitals and other super specialty
chains, specialized healthcare centers are increasing across India. Managing such large scale
hospitals /clinics requires domain knowledge of healthcare along with business process
orientation.

The healthcare industry (also called the medical industry or health economy) is the range

of companies and non-profit organizations that provide medical services,
manufacture medical equipment, and develop pharmaceuticals. It includes the generation and
commercialization of goods and services lending themselves to maintaining and re-
establishing health. The modern healthcare industry is divided into many sectors and depends
on interdisciplinary teams of trained professionals and paraprofessionals to meet health needs
of individuals and populations.

The healthcare industry is one of the world's largest and fastest-growing

industries. Consuming over 10 percent of gross domestic product (GDP) of most developed
nations, health care can form an enormous part of a country's economy.

Health care in the United States is given by numerous different legitimate elements.
Current evaluations put US healthcare spending at around 15% of GDP, which is the
most astounding on the planet. The United States spends the most noteworthy level of health
care costs on pharmaceuticals on the planet. In the United States, around 85% of residents
have health protection, either through their manager or bought exclusively.

The healthcare industry includes medical care providers, physicians, specialist clinics,
nursing homes, hospitals, medical diagnostic centers, pathology laboratories and management
personnel as a backbone of all of them. In terms of revenue and employment, healthcare is
one of India’s largest service-sector industries.

The Pharmaceutical and Healthcare industries play a very important role in terms of
contributing to human health and wellness. Given the fundamental linkage of these sectors
with social well-being, these industries tend to have a strong growth trend and are considered
immune to business cycles.

India’s healthcare sector is witnessing rapid transformation driven by increased penetration of

health insurance, participation of large Corporate and high government focus. These trends
will result in significant capacity expansion, improved infrastructure and service quality.
However, market growth will continue to be led by private spending and hence remain highly
price competitive, relative to developed economies.

HISTORY OF HEALTHCARE SECTOR:

Home Remedies:

Home has long been the upholder of health care for ancient human beings as for much of the history
of human civilization everything from birth to disease was handled by experts within one’s own
house. A home remedy is a treatment to cure a disease or ailment that employs certain spices,
vegetables, or other common items. Home remedies may or may not have medicinal properties that
treat or cure the disease or ailment in question. Healthcare began as a purely reactionary, medicinal
practice, in which people learned the medicinal properties of plants through trial and error, and then
passed on that knowledge to others. Although there is no record to establish when plants were first
used for medicinal purposes (herbalism), the use of plants as healing agents is a long-standing
practice.

Traditional Healthcare:

Over time through emulation of the behavior of fauna a medicinal knowledge base developed and was
passed between generations. Humans have long recorded their secrets for curing sickness, but
sickness has not always been well understood. Medical knowledge in the ancient world was
accumulated over centuries of experiment and experience - an exercise in trial, error, and success, the
result of which began to be recorded by the second millennium B.C. It later became a subject of
purposeful study by many different cultures, including the Persian, Egyptian, Greco-Roman, Indian,
and Chinese cultures.

Ancient Pharmacology & Medical Practitioners:

Ancient health care providers gained an extensive knowledge of local flora and devised the principles
and practice of the ancient pharmacology. One of the oldest and most extensive examples comes from
Mesopotamia known as “Treatise of Medical Diagnosis and Prognoses,” where some forty tablets
were comprised of prescriptions and treatises that outlined treatments based on rational observations
of the body.

Technological, Chemical & Biological Advances:

In the 19th century, there were numerous technological, chemical, and biological advances that gave
physicians the means to better understand, diagnose, and treat ailments. The discoveries included
anesthetics, syringes, antiseptics, x-rays, and penicillin. Around the beginning of the 20th century,
modern healthcare began to evolve. Doctors started to initiate prepaid arrangements for their services,
foreshadowing the medical insurance and administration field that is in place today.

Impact of Colonialism on Healthcare:

The advent of infectious diseases and tropical medicine was a direct consequence of colonialism in
the 19th and early 20th century which resulted in evolution of public health in British colonies for
disease prevention. Infectious diseases had an enormous effect on health, through the transfer of new
diseases. Urbanization and increasing population densities made indigenous people vulnerable to
incoming diseases. National governments started working towards protecting their citizens against
outside threats, including infectious diseases.

Impact of Therapeutic Revolution:

In the early 19th century, the focus of medical research changed from a generalized pathology to a
localized pathology concerned with physiology and disease transmission.  This transition, known as
the “therapeutic revolution” occurred during the 20th century when research came to focus on specific
diseases.  The therapeutic revolution is generally understood as the moment when medicine began to
work. It led to the growing effectiveness of medicine. Pasteur, father of germ theory, unraveled the
mysteries of many diseases and contributed to the development of the first vaccines.

Impact of Eradication Campaigns:

The most aggressive effort against malaria was the Global Malaria Eradication Program.  This
program was launched by the World Health Organization in 1955 and depended on drug chloroquine
for treatment of infected individuals and the chemical DDT for mosquito control. Smallpox was the
first disease to be eradicated owning to the success of the Smallpox Eradication Program.  Smallpox
eradication efforts began in 1967, the last endemic case appeared in 1977, and eradication was
declared in May of 1980. Eradication campaigns of the 20th century were able to reduce diseases such
as malaria and tuberculosis in industrialized countries but these diseases continue to haunt developing
countries

Globalization of Healthcare Industry:

The notion of a global health care industry is a recent phenomenon and although the modern
healthcare industry is becoming more global day by day but because health care has always
traditionally been considered a local industry, specific to individual countries, the practices and
development of healthcare as an industry across countries vary. In each country, the health industry
has its own history and cycle of evolution. Now globalization of the ancillary healthcare industries,
recent technological developments and standardization of various aspects of the industry is driving the
trend towards globalization of healthcare industry. 

Purpose of the Study:

1) To get an insight about Health Care Industry.

2) To assess the importance of HR, Finance, Marketing, R&D in Health Care Industry.

3) To know Global and National Scenario of Health Care Industry.

PURPOSE OF HEALTH INDUSTRY:

The purpose of health services is to protect and improve the health of individuals and
population. The goals for health services should include six critical elements:

1. Patient Safety: Patients should not be harmed by health care services that are
intended to help them. The IOM report, found that between 46,000 and 98,000
Americans were dying in hospitals each year due to medical errors. Subsequent
research has found medical errors common across all health care settings. The
problem is not due to the lack of dedication to quality care by health professionals, but
due to the lack of systems that prevent errors from occurring and/or prevent medical
errors from reaching the patient.
 2. Effectiveness: Effective care is based on scientific evidence that treatment will
increase the likelihood of desired health outcomes. Evidence comes from laboratory
experiments, clinical research (usually randomized controlled trials), epidemiological
studies, and outcomes research

3. Timeliness: Seeking and receiving health care is frequently associated with delays in

obtaining an appointment and waiting in emergency rooms and doctors’ offices.
Failure to provide timely care can deny people critically needed services or allow
health conditions to progress and outcomes to worsen.

4. Patient Centred: Patient-centred care recognizes that listening to the patient’s needs,

values, and preferences is essential to providing high-quality care. Health care
services should be personalized for each patient, care should be coordinated, family
and friends on whom the patient relies should be involved, and care should provide
physical comfort and emotional support.

5. Efficiency: The U.S. health care system is the most expensive in the world, yet there
is consistent evidence that the United States does not produce the best health
outcome or the highest levels of satisfaction. The goal is to continually identify waste
and inefficiency in the provision of health care services and eliminate them.

6. Equity: The health care system should benefit all people. The evidence is strong and
convincing that the current system fails to accomplish this goal. The IOM
report, Unequal Treatment, documented pervasive differences in the care received by
racial and ethnic minorities.

GLOBAL SCENARIO:
With global health care spending expected to rise at a CAGR of 5 percent in 2019-23, it will
likely present many opportunities for the sector. Among these drivers are a growing and
aging population, rising prevalence of chronic diseases, infrastructure investments,
technological advancements, evolving care models, higher labour costs amidst workforce
shortages, and the expansion of health care systems in developing markets. Health care
systems need to work toward a future in which the collective focus shifts away from
treatment, to prevention and early intervention.

GDP spent on health care should also rise slightly, from an estimated 10.5 % in 2020 to 10.6
% in 2023.

•By 2020, 50 percent of global health care Expenditures – about $4 trillion – will be spent on
three leading causes of death: Cardiovascular diseases, cancer and Respiratory diseases.
Prevalence of dementia is forecast to increase in every region of the world and is anticipated
to double every 20 years, Reaching 74.7 million by 2030.
•HIV-AIDS continues to affect 36.9 million People worldwide, around 70 percent of them
living in Sub-Sahara Africa. The Zika virus and associated upsurge in microcephaly are
major threats in Latin America.

•Number of diabetes sufferers is expected to rise from the current 415 million to 642 million
by 2040.

•Prevalence of dementia is forecast to increase in every region of the world and is anticipated
to double every 20 years, reaching 74.7 million by 2030.

•Aging population (> 65 yrs. old) will increase by eight percent, from 559 million in 2015 to
604 million in 2020.

National Scenario:
INDIAN HEALTHCARE SECTOR

Indian healthcare delivery system is categorized into two major components - public and
private. The Government, i.e. public healthcare system comprises limited secondary and
tertiary care institutions in key cities and focuses on providing basic healthcare facilities in
the form of primary healthcare centers (PHCs) in rural areas. The private sector provides
majority of secondary, tertiary and quaternary care institutions with a major concentration in
metros, tier I and tier II cities.

India's competitive advantage lies in its large pool of well-trained medical professionals.
India is also cost competitive compared to its peers in Asia and Western countries.

Market Size

 The healthcare market can increase three-fold to Rs 8.6 trillion (US$ 133.44 billion)
by 2022.

 Indian medical tourism market is growing at the rate of 18 per cent year on year and is
expected to reach US$ 9 billion by 2020.
 There is a significant scope for enhancing healthcare services considering that
healthcare spending as a percentage of Gross Domestic Product (GDP) is rising.

 The government’s expenditure on the health sector has grown to 1.4 per cent in
FY18E from 1.2 per cent in FY14. The Government of India is planning to increase
public health spending to 2.5 per cent of the country's GDP by 2025.

Government Incentives-Some of the major initiatives taken by the Government of

India to promote Indian healthcare industry are as follows:

 The Government of India aims to increase healthcare spending to three percent of the
Gross Domestic Product (GDP) by 2022.
 In February 2019, the Government of India established new All India Institute of
Medical Sciences (AIIMS) at Manethi, District Rewari, Haryana at a cost of Rs 1,299
crore (US$ 180.04 million).
 The Union Cabinet approved setting up of National Nutrition Mission (NNM) with a
three-year budget of Rs 9,046 crore (US$ 1.29 billion) to monitor, supervise, fix
targets and guide the nutrition related interventions across ministries.
 The Government of India has launched Mission Indradhanush with the aim of
improving coverage of immunisation in the country. It aims to achieve at least 90 per
cent immunisation coverage by December 2018.

Road Ahead-India is a land full of opportunities for players in the medical devices
industry. India’s healthcare industry is one of the fastest growing sectors and it is
expected to reach $280 billion by 2020. The country has also become one of the
leading destinations for high-end diagnostic services with tremendous capital
investment for advanced diagnostic facilities, thus catering to a greater proportion of
population.

Macro and Micro Analysis:

Analysing of Global data with National data we found the following differences in healthcare:

 Public health scenario-India lags far behind developed nations in the public health
arena, with clean drinking water, adequate nutrition, sanitation and access to
healthcare being long-standing challenges. This year's Budget, too, has come under
 criticism for not addressing systemic problems adequately, emphasizing instead
health insurance schemes and public-private partnerships.
 Nature of healthcare-The Indian healthcare system can be described as 'mixed'. While
the government provides healthcare at primary, secondary and tertiary levels, there is
a burgeoning number of private hospitals with better medical facilities.
Unfortunately, most are too expensive for the average citizen. Healthcare is taken far
more seriously in the US, as we have already seen.
 Vast difference in spends as % of GDP-In India the total expenditure on healthcare as
percentage of GDP is just 4%, while in the US it is 17%. According to World Health
Organization (WHO) data for countries performing best in the healthcare sector, the
US ranks 37, while India stands at 112.
 Scope of coverage-In the US, health insurance cover is generally comprehensive, and
includes everything from consultations for, say, a fever to hospitalization. However in
India, visits to physicians are not covered under insurance.
 Out of the pocket expenditure-A whopping 70% of the Indian population pays out of
their own pocket for medical expenditures.

Research Methodology:
DATA COLLECTION:-

 Primary Data: Primary data will be collected through a survey questionnaire which
consisted of 12 questions from various Hospital sector (HR, Finance, R&D,
Marketing etc.)

 Respondents: Medical Care Providers and Staff working at Hospitals.

 Secondary Data: Secondary data will be collected from various Research paper
available online on hospital and health care sector and literature review will be done
for the same.

For collection of primary data we went to various institutes. The hospitals name are as
mentioned below-

Industry expectation – Inputs from Medical Care Providers and Staff at the Hospitals.

Sr.
Name of the Hospitals Feedback Analysis
No.
Lifepoint Multispecialty Hospital They conduct CSR activities like free medical
Sr. No. 145, 1, Mumbai Pune camps and marketing is also done through the
Bypass Rd, near Sayaji Hotel, same. They have digital payment method and
1.
Wakad, Pimpri-Chinchwad, they provide training for new and old staffs and
Maharashtra 411057. there is no R&D in the hospital.
Golden Care Hospital And Every 1st Sunday of the camp BSL camp the
Diagnostic ways in which they carry out CSR activities and
Bhumkar, Shedge Wasti Road, Marketing. Efficent training is provided for new
Wakad, Pimpri-Chinchwad, and old staff. They have digital payements and
2.
Maharashtra 411057. also R&D is done at the hospital.
 Niramaya Hospital Marketing is done through brochures and
Survey No. 4742, Behind Jai Hind pamphlets. No R&D and training is provided
Petrol Pump, Next to Chinchwad (E) through on the job training They have digital
3. Post Office, Pimpri-Chinchwad payment method.
Maharashtra 411019.
Global Multispecialty Hospital They carry out marketing by organizing camps,
Pride Purple Square,Kalewadi Training is done through off the job training and
4. phata, Wakad, Pimpri-Chinchwad, no R&D at the hospital.
Maharashtra 411057. .
Umarji Mother and Child Care Training is provided by on the job training and
Hospital marketing is done by CSR activities like Free
Survey no. 13/1, Baner-Balewadi medical checkups, Yes they have R&D at the
5. Phata, Beside Aditya Shagun hospital. Provide internships to Health Care
"Comfort zone", Pune, management students.
Maharashtra 411045. .
Yes they have R&D at the hospital and CSR
Surya Mother And Child Care
activities include Free medical checkups and
Super speciality Hospital
Marketing is done through brochures and
Pune Octroi Naka, Sr. No. 8 near
billaboard. Payments include digital mode as
Bhujbal Chowk Mumbai Hwy,
well. Training is given to emplyoees and
Hinjawadi - Wakad Rd, Bhujbal
6. provide internships also to Healthcare
Vasti, Wakad, Pune, Maharashtra
mangement studies.
411057.

Every Sundays camps are carried out as apart of

SANJEEVANI HOSPITAL
their CSR activities and marketing is done
Hinjewadi Road Shivaji Chowk,
through the same. Training is provided to both
above IDBI Bank, Phase-I,
new and old staff. Digital modes of payment is
Hinjawadi, Pune, Maharashtra
7. accepted at the hospitals. No R&D at the
411057.
hospital.

Ethical Issues in Healthcare Industry:

1. Patient Confidentiality
Information about a patient’s medical condition is considered private. Violating a
patient’s confidentiality can hurt the patient and have legal and ethical consequences
for the health care worker. The Health Insurance Portability and Accounting Act
(HIPAA) has drawn up specific laws that govern the release of a patient’s medical
information. These laws state clearly the type of patient information that can be
released to third parties and which information must be kept confidential.

2. Patient Relationships
Health care providers are ethically prohibited from entering into personal
relationships with patients in the course of providing treatment. Violating this policy,
especially if it involves a sexual relationship, can result in losing a license to practice,
in being sued and in being forbidden to provide any kind of healthcare services in the
future. Entering into a sexual relationship with a patient is considered a serious
 violation of that patient’s rights and an act of misconduct and abuse of power on the
part of the health care worker.

3. Malpractice and Negligence

Health care providers are always at risk for being charged with malpractice and
negligence. A patient who is harmed by defective medical equipment or products,
injured in the course of a medical treatment or placed in danger because of medication
errors can sue to recover their losses. Patients can also sue when health care providers
fail to provide a critically needed treatment or service.

4. Informed Consent
In order for any medical treatment to be considered legal, the patient must first
provide the health care worker with an informed consent. Unless a patient provides
informed consent for a procedure that procedure can considered an assault or even a
homicide if the patient were to die as a result of treatment.

5. Issues Related To Physician Assisted Suicide (PAD)

Most health care professionals are aware that physician assisted dying is already legal
in states like California and Oregon. Support for PAD is growing in momentum as the
baby boom generation gets older. Surveys show that roughly 50 percent of doctors
now support some form of physician assisted dying. These days, physicians are
broadening the concept of “Do no harm” to include providing relief for those who are
dying and suffering as a result of a fatal illness.

Conclusion:
The Indian healthcare sector is on a fast growth track and has opened doors for Job
opportunities for Management students. Out of all the constituents of Healthcare sector
mentioned above, opportunities are there in Hospitals. If you are seriously considering
healthcare jobs as your career, you must acquire required qualifications and aptitude before
entering this sector of highly skilled and one of the fastest growing industries. The
employment in the healthcare sector appears to be growing as the industry grows faster than
even the strong U.S. economy.

References:
 https://www2.deloitte.com/global/en/pages/life-sciences-and-healthcare/articles/global-
health-care-sector-outlook.html
 https://www.mckinsey.com/~/media/mckinsey/dotcom/client_service/Pharma%20and
%20Medical%20Products/PMP
%20NEW/PDFs/778886_India_Pharma_2020_Propelling_Access_and_Acceptance_Realising
_True_Potential.ashx
 https://www.mckinsey.com/industries/healthcare-systems-and-services/our-insights/the-
future-of-healthcare-finding-the-opportunities-that-lie-beneath-the-uncertainty
 https://www.mckinsey.com/industries/healthcare-systems-and-services/our-insights/seven-
healthcare-industry-trends-to-watch-in-2020
 https://www.mba-healthcare-management.com/lists/5-ethical-issues-in-healthcare-
management