Remote Healthcare Solutions and Services Market Analysis India Perspective Dr. Sanjay Sharma MS (Genl Surgery), PGDBA, FICA, FAGE
$ Billion The Global remote healthcare delivery market is an ~$12Bn market growing at 18.6% and dominated by the services segment The Global Telemedicine market grew from $9.8 billion in 2010 to $11.6 billion in 2011 and will almost triple to $27.3 billion in 2016, growing at a CAGR of 18.6% In 2016, Global Telemedicine Market poised to reach $ 27.3 B The telemedicine market is segmented into tele hospital and tele home markets. The tele hospital market was worth $6.9 billion and tele home market was valued at nearly $2.9 billion, however the tele home segment is growing faster than the tele hospital segment at a projected CAGR of 22.5% vs. 16.8% Global Market for Remote Healthcare Delivery The tele medicine market is also segmented into technology & service segments. The 3.9 11.3 5.9 technology portion is expected to grow from $3.9 billion in 2010 to reach $11.3 billion in 2016, with a 2010 2016 CAGR of 19.8% and service market is expected to Technology Services 18.6% grow from $5.9 billion in 2010 to $16.0 billion in 2016 at a CAGR of 18.1% 3/8/2015 Dr. Sanjay Sharma 2 Source: Information Week / BCC Research Report 16
BRIC remote healthcare delivery market is growing at 15.8% however unlike Global market is dominated by technology Chronic diseases driving growth in BRIC markets. Telemedicine market is witnessing growth due to increase in the number of patients suffering from chronic diseases such as chronic heart failure, diabetes, asthma, hypertension. Fast Technology adoption growth. An increase in IT spending and growth in telecommunication network has positively impacted the Telemedicine market in BRICS The BRIC Telemedicine technology market is expected to reach a size of $307.4 million by 2014, ~3 times the BRIC telemedicine service market which is expected to reach $111 million in 2014 with CAGR of 13.8%. This indicates that emerging markets are facing difficulty in realizing the RoI from this market BRIC telemedicine market expected to reach a market size of $418.4 million by 2014 at a CAGR of 15.8% from 2009-14. 3/8/2015 Dr. Sanjay Sharma 3 Source: Telemedicine Market in Brazil, Russia, India, China (BRIC) Advanced Technologies, Global Forecast by MarketsandMarkets
Indian remote healthcare delivery market is expected to grow at a CAGR of 20% Diu DAMAN & DIU Arabian Sea GUJARAT Gandhinager Daman Mumbai Panaji GOA LAKSHADWEEP (INDIA) RAJASTHAN Silvassa DADRA & NAGAR HAVELI Mahe (PUDUCHERRY) Kavaratti Srinagar Chandigarh Jaipur KARNATAKA KERALA PUNJAB HARYANA Bengaluru JAMMU & KASHMIR HIMACHAL PRADESH Shimla DELHI NCT Delhi New Delhi Bhopal MAHARASHTRA Dehradun MADHYA PRADESH Hyderabad ANDHRA PRADESH TAMIL NADU UTTARAKHAND Lucknow UTTAR PRADESH CHHATTISGARH Chennai Raipur Cuddalore PUDUCHERRY Karaikal PUDUCHERRY ORISSA Patna Ranchi Yanam (PUDUCHERRY) JHARKHAND BIHAR Bhubaneshwar SIKKIM Gangtok 0 0 WEST BENGAL Kolkata Bay of Bengal India 200 400 Kilometers Dispur Shillong MEGHALAYA 200 400 Miles Agartala TRIPURA Itanagar ASSAM (Asom) ANDAMAN AND NICOBAR ISLANDS (INDIA) Imphal MANIPUR Aizawl MIZORAM ARUNACHAL PRADESH NAGALAND Kohima Port Blair India Telemedicine market size Indian private sector tele medicine market was estimated to be $7.5 million in 2011 and is expected to grow at a CAGR of around 20% over the next 5 years to $18.9 million in 2016. However, including government, PPP and other initiatives, the market is expected to grow to $500Mn by 2016. The market is witnessing increased acceptability, however estimates vary because of the nascent stage of the industry Thiruvananthapuram Indian Ocean 3/8/2015 Dr. Sanjay Sharma 4
A multitude of factors are coming together to create an enabling remote healthcare delivery ecosystem in India Public Private Participation Monetary & Policy level support Technology development support Insurance Companies Local entrepreneurs Efforts to address standardization issues 1 Renewed government focus 2 Changing focus of private healthcare providers Increased interest by IT firms /cloud computing ICT & satellite Connectivity; Increasing telecom presence Initiatives by ISRO, Ministry of ICT, Health to improve connectivity Improved telecom infrastructure Remote healthcare delivery Ecosystem 3 Human Resource availability Training of paramedics, IT staff, Doctors 3/8/2015 Dr. Sanjay Sharma 5
However there are key challenges that need to be addressed Regulatory No legal framework governing Telemedicine in India ; Prescribing medicines other than conventional prescription procedure actually amounts to criminal offense Infrastructure Infrastructure issues such as poor bandwidth in some areas & expensive bandwidth in others; potential maintenance of equipments Implementation Systemic problems such as training of technicians at village end, IT staff and local doctors. At consulting doctors end, pushy administration & coordination issues. Cultural issues such as unwillingness of hospitals to share data is also one of the major deterrents Acceptance For a village doctor & rural patient, using high end technology may be too inhibiting and radical. Once benefits are seen, the acceptance rate will be higher. Viability Telemedicine in India, has largely been a part of hospitals social responsibility, with hospitals ulterior motives of improving bed occupancy in case tele patient requires hospitalization and needs to transform into a sound revenue generating model, attractive for village level entrepreneurs & other investors. 3/8/2015 Dr. Sanjay Sharma 6
Government initiatives and growing overall acceptance are the drivers; however unclear legal and revenue model are detractors STRENGTHS WEAKNESSES Growing enthusiasm for research & development by academic institutions, government, individual researchers, technology firms National level organizations & government funded companies established to develop & promote tele health Increased Doctor acceptance for remote healthcare delivery if clinical effectiveness proven Growing awareness of the potential of remote healthcare delivery as an alternate to bridge the skewed doctor population ratio between urban and rural S W Lack of national level standardizations in tele health in terms of technical standards, business models, payments, etc. Absence of a legal framework governing remote healthcare delivery, making way for potential legal liabilities Unevenly distributed telecom networks that may become an obstacle for tele-health development Infrastructure challenges in remote areas Lack of commitment since most often remote healthcare delivery is setup as an add-on practice and not a dedicated cell OPPORTUNITIES Vast and diverse geography with dominant rural population Disparity in healthcare infrastructure O T THREATS Human resource constraints in terms of computer literacy amongst medical practitioners & rural paramedics / ground staff Low cost, locally developed technical solutions & ICT expertise Fast adoption of Mobile technology Policy on adoption of ICT in service delivery in 12th Plan Budget Allocation under National Rural Health Mission Absence of legal framework might detract comprehensive usage of remote healthcare delivery Large scale private sector implementation might not happen if clear revenue streams and physician compensation models are not designed National Optic Fiber Network being laid 3/8/2015 Dr. Sanjay Sharma 7
Collaboration has come out as key success factor for remote healthcare delivery as seen in various state government led PPP Uttarakhand: Telemedicine PPP Model EOI UP : State Medical College Network, Three Medical Colleges- Allahabad, Kanpur and Meerut connected with SGPGIMS, Lucknow Super Specialty Hospital. Rural Telemedicine Centers at Raibareli District Hospital & Bachrawan Community Health Center Punjab: PPP model with e-health Point Bihar: State of Bihar Initiated an unique telemedicine project for delivering service in alternative medicine Ayurveda, Yoga, Unani, Sidha & Homeopathy (AYUSH) Gujarat: Telemedicine PPP Model EOI Maharashtra: Government of Maharashtra telemedicine project was operationalised in the year 2007. The present setup of Telemedicine network in Maharashtra is one of the largest in India Tripura: First telemedicine network in Tripura between GB Pant Hospital and IGM Hospital, Agartala and five other Nodal Centers. 2nd & 3rd Telemedicine projects on the development and application of Telemedicine for Tripura Government Hospitals sponsored by the DIT, MCIT, GoI. Implementing Agency WEBEL ECS Ltd. & IIT Kharagpur. National Rural Health Mission (NRHM) supports maintenance and manpower ; Network for alternate medicine AYUSH Kerala Telemedicine Network: Onconet - Cancer Care For Rural Masses (in 6 hospitals), Telemedicine Kerala for Taluk hospitals (in 8 hospitals), Telehealth and Medical Education Kerala ( in 18 hospitals), Rural Telemedicine Project for primary care in Tirur taluk (in 11 hospitals) Odisha : Establishment of Odisha Telemedicine Network in a phased manner by connecting 3 government medical colleges to SGPGIMS, Lucknow on one side & to all district headquarters hospitals on the other side. ; Construction of a State-level Telemedicine Resource Center at Cuttack ; Taking Telemedicine beyond districts on a PPP mode 3/8/2015 Dr. Sanjay Sharma 8
IL&FS has been able to create a revenue model through partnership Public Private Patient Government E-Wallet Payment 60% 20% 20% Running the service including recruiting paramedical and training them PPP Yearly payment to IL&FS for management fees Role Apollo Provides its brand name Doctors for consultation Benefit IL&FS Scouts for rural entrepreneur Training the rural entrepreneur Finding quality healthcare provider Rural entrepreneur Setup the infrastructure (Min. INR 1.2lakhs) Create awareness among local population IL&FS Faster footprint expansion through partnership Capitalize on Apollo brand name Help realize their social commitment Lesser CAPEX investment Under this model Apollo does not charge INR8Lakh for franchise and yearly license fees 3/8/2015 Dr. Sanjay Sharma 9 Source: Primary discussion and PwC analysis
Tele diagnosys have developed a revenue model by working as outsourcing partners Radiology images Diagnostic centres in different countries (US, Africa, Asia) Report at 30-40% lower cost Partnership Telediagnosys Infrastructure Radiology image capture capability Payment as per contract for service. Any technology implementation is charged separately Infrastructure On-board Radiologists certified in the country from where they read images Reading room with access control, Web based PACS, Medical Display Monitors VPN Connectivity offered for data security Internet Bandwidth provided by multiple Tier 1 ISPs directly from their backbone with 99.9 % uptime Power Direct power from 2 providers followed by UPS and Generator backup Server Mirroring of data in primary server and alternate server available at a different physical location Confidentiality Secure IT infrastructure 24 x 7 monitoring of network connection and server 24 hour Toll Free dedicated helpline 3/8/2015 Dr. Sanjay Sharma 10 Source: Primary discussion and PwC analysis
Partnership Tele rad providers generates revenue through tele radiology, tele consultation as well as tele-education Tele radiology providers Radiology services including CT radiology Radiology learning program Radiology images Report Enroll for 7-15 days program by paying the fees Images Report which is checked by specialist and feedback is provided Diagnostic centres/ hospitals/ CRO Radiologist Reporting fees range from Rs. 30 for Xray reports to Rs. 400 for CT / MRI for domestic customers Reporting fees range from US$ 10 for Xray reports to US$ 40 for CT / MRI for overseas customer 3/8/2015 Dr. Sanjay Sharma 11 Source: Primary discussion and PwC analysis
World Health Partners VALUE PROPOSITION The various components of WHP s network model are: SkyCare Providers Local rural health providers who already live in the village are trained to act as WHP s direct local health agent SkyHealth Centres enable remote diagnosis and audio-visual communication between rural patients and city doctors at a Central Medical Facility Central Medical Facility The CMF houses a panel of physicians who consult with clients in SKY Centres located in the villages Diagnostic Test Laboratories: Diagnostic facilities throughout the project area support Sample collection & report delivery to central medical facility Shops: Rural shops, most of them pharmacies, ensure that clients have access to all the medicines and products they need BUSINESS MODEL WHP operates a market-based model, where the local entrepreneur is free to decide the consultation fees based on market needs. Similarly, the Specialist is free to decide his/her consultation charges. WHP gets a margin from the local entrepreneur for every consultation. The CMF doctors are paid a monthly salary based on the number of patients seen. Initially, WHP funded 75% of the setup costs for the SkyHealth centre with the remaining 25% coming from the local entrepreneur. In the current model, local entrepreneur makes 100% of the investment. This also helps to ensure commitment from the local entrepreneur and attract the right talent, in addition to reducing the cost burden on WHP. The biggest cost component is setup and maintenance of technology infrastructure. Local entrepreneurs pay a refundable deposit of INR 25,000 to WHP for provision of technology infrastructure such as computers, broadband connection etc. Physical infrastructure setup & maintenance is the responsibility of local entrepreneurs running the SkyHealth Centre, so WHP does not incur any direct costs in that aspect Training duration is kept short to minimize expenses & Local staff salaries are paid by outsourced agency, reducing the burden on WHP IMPACT WHP serves 3 districts in the state of Uttar Pradesh, covering a population of 4 million in close to 1100 villages. Typically each Skyhealth Centre sees 4-5 patients per day. In the first 18-month period, WHP s Uttar Pradesh project provided over 25,000 tele-consultations with qualified physicians to rural villagers, in addition to 188,401 couple years of protection (CYP) averting an estimated 107,658 unwanted pregnancies. This increases couple protection in the area over time by 37%, from 28 to 38.3 Source: Secondary research, Primary discussion and PwC analysis 22
Nanavati hospital has partnered with government under PPP and also provides option of franchise and corporate tie ups Nanavati hospital PPP Franchise Partnership with Corporate and NGOs E-Clinics Government of Doctors Companies can tie up Consultation by phone Maharashtra Hospitals in small cities with Nanavati to provide Consultation by email Government of Madhya & villages Remote Healthcare Consultation by Video Pradesh Laboratories facility to its employee conference Pan Africa through Paramedics Telemedicine facility Ministry of external PHC will be run by Nanavati affairs Retail outlets in for the Corporate house Shopping Malls Employees get the Business houses in facility of Super Branded Retail segment specialty consultation Services provided include Tele CME, Tele Cardiology, Tele Neurology, Tele Urology, Tele Paediatrics, Tele Dermatology, Tele Orthopaedics, Tele Oncology, Tele Nephrology, Tele Ophthalmology and Tele OBGY 3/8/2015 Dr. Sanjay Sharma 13 Source: Secondary research and PwC analysis
Social impact of remote healthcare delivery Improved health access Quality of care Quality of life Improved Public Health Outcomes Better Affordability Entrepreneurship Social Impact Increased patient acceptance Technology Innovation Geriatric care focus Learning & Development Reduction in travel costs incurred Chronic disease management 3/8/2015 Dr. Sanjay Sharma 14
Industry Trends 3/8/2015 Dr. Sanjay Sharma 15
Key industry trends affecting the growth of tele-consulting in India Increasing elderly population By 2018, India will have more than 200 million people above the age of 65 (who constitute the majority of home care patients) Shifting disease Pattern Increasing advent of lifestyle diseases like diabetes, hypertension and Cardiovascular Diseases in India. Inadequate medical personnel Doctors ratio in India is highly inadequate (0.7 per 1000 population); Nursing staff also inadequate (1.3 per 1000) Accessibility issues 45% of the population travel more than 100 km to access a higher level of care. Regional disparity 70% of India s healthcare infrastructure is concentrated in the top 20 cities. Infrastructure gap Over 6.5 lakh beds to be added in the next 5 years Potential Benefits Reduced travel time & cost, greater continuum of care, greater access to healthcare services 3/8/2015 Dr. Sanjay Sharma 16
Expectations from the provider, patient and payer Provider Patient Payer Private Hospital Chains & Clinics/District Hospitals Increased penetration into population of Tier-II, III cities Low CAPEX High return model Increased probability for IPD conversions at nodal hospitals Hands-on training of resident doctors for newer formats Reduced hospital re-admission rates Lower ALOS Patient seeking consultation / monitoring Low cost treatment- will save on travel expenses & patient transportation costs Medical expertise & care from base location Continuum of care Government / Private Health Insurance Providers Insurance companies save on potentially higher claims if patients transported to Tier-I cities Patients condition is addressed and necessary interventions eventually lead to better health of the insured patient and consequently lesser claims 3/8/2015 Dr. Sanjay Sharma 17
Key industry trends affecting the growth of home health-care in India Increasing elderly population & chronic disease burden By 2018, India will have more than 200 million people above the age of 65 (who constitute the majority of home care patients). Chronic disease burden-more than 40 million Indians lose their lives to chronic diseases each year Inadequate medical personnel Increasing need for continuity care pre/post-hospitalization ; Growing demand for elderly care, post-surgery rehab services and palliative care Societal Changes Due to changes in the family structure from the multi-generation family under one roof, to the nuclear family many adult children are facing challenges in caring for their elderly parents. NRI children want to cater to their ailing parents at home. Infrastructure Shortage of hospital beds and other medical facilities Potential Benefits Increased intensity of disease monitoring and management will create improved patient health with reduction of acute and chronic complications, and will translate directly into decreased consumption of expensive emergency health care resources (emergency room visits and rehospitalizations) and decreased long-term disease complications. This, in turn, should translate directly to decreased consumption of expensive medications, personnel, equipment and hospitalization days required to manage those long-term complications 3/8/2015 Dr. Sanjay Sharma 18
Expectations from the provider, patient and payer Provider Patient Payer Private Hospital Chains Reduces risk of infections Reduces risk of re-admissions Increase capacity ( virtual beds ) Reduces Average Length of Stay (ALOS) for many patient categories (e.g. post-operative care, IV antibiotics etc), thus enabling more potential revenuegeneration Significantly reduces OPD workload where appropriate Reduces crowding (fewer patients and families) Patient seeking intervention/monitoring Low cost treatment- will save on travel expenses & patient transportation costs Medical expertise & care at home Continuous monitoring of patients disease progression Government / Private Health Insurance Providers Reduces costs of treatment Reduces risk of re-admissions Patients condition monitored real time and necessary interventions eventually lead to better health of the insured patient and consequently lesser claims 3/8/2015 Dr. Sanjay Sharma 19
Multiple factors lead to home-healthcare being a sustainable and a scalable business concept Increasing elderly/aging population Shortage of hospital beds Increasing need for continuity care pre/post-hospitalization Chronic disease burden-more than 40 million Indians lose their lives to chronic diseases each year Strong demand for professionally driven specialty home healthcare service Health care is a secular field and home healthcare offers excellent prospects both in terms of scalability and creating a disruption in the current healthcare delivery model. This model helps save a lot of time for patients, because they don't need to wait outside a clinic for a long period to service very basic healthcare needs. Technology development, and workflow integration along with training of field staff are among the most important factors for business scalability 3/8/2015 Dr. Sanjay Sharma 20
Key Industry Trends affecting the growth of tele-icu in India Increasing elderly population Most elderly people require hospitalization in Intensive Care Unit (ICU) in the last two years of their life Shifting disease Pattern A lot of young people admitted to ICU because of trauma and adverse effects of lifestyle diseases like diabetes and hypertension. Inadequate medical personnel There are merely around 100 intensivists in India, who assess, resuscitate, and manage patients with life threatening problems; Shortage of trained paramedical staff as well Operational challenges Smaller hospitals can t afford a full time specialist Regional disparity Infrastructure gap Many of the smaller hospitals in Tier-II,III cities have inadequate infrastructure and intensivists to support critical care interventions; ICU care is primitive or non existent at district hospitals in rural India 70,000 ICU beds available including all types and across all hospitals and small time nursing homes in India that cater to five million patients requiring ICU admission every year Potential Benefits Remote monitoring saves on travel costs and decreases bedside infections by around 60% 3/8/2015 Dr. Sanjay Sharma 21
Section 3 Competitive Landscape RICOH: Remote Healthcare Delivery Phase - III Report : Tele-ICU 3/8/2015 Dr. Sanjay Sharma 22 12
Expectations from the Provider, Patient and Payer Provider Patient Payer Private Hospital Chains & Clinics/District Hospitals Increased penetration into population of Tier-II, III cities Low CAPEX High return model Increased probability for IPD conversions at nodal hospitals Hands-on training of resident doctors for newer formats Academic research credentials, considering reliable real time patient information Profit making opportunity for district level hospitals/clinics Patient seeking e-icu intervention/monitoring Low cost treatment- will save on travel expenses & patient transportation costs Medical expertise & care at home Mortality rates shown to reduce by around 60% ICU care at local hospital allows patient to get family support & care Government / Private Health Insurance Providers Insurance companies save on potentially higher claims if patients transported to Tier-I cities Patients condition monitored real time and necessary interventions eventually lead to better health of the insured patient and consequently lesser claims 3/8/2015 Dr. Sanjay Sharma 23
Thank You! email: sanjay@aptahealth.in 3/8/2015 Dr. Sanjay Sharma 24