India's exploding healthcare sector, and why you should care

As we reported in this week's FierceHealthFinance issue, Indian hospital chain Fortis Healthcare is expanding rapidly, as are several of its competitors. Unlike the U.S. hospital industry, which is struggling to remake itself in the wake of financial and operational practices that just don't cut it anymore, many Indian hospital entrepreneurs have a much cleaner slate.

These chains are positioning not only to serve the growing global medical tourism market, but also a growing middle class that can afford to pay for quality healthcare. To meet the healthcare needs of this growing class, which should continue to expand rapidly for the next several years, India needs to add 2 million beds to the existing 1.1 million by 2027, according to a CII study.

In fact, one estimate by Pricewaterhouse Coopers projects that the Indian healthcare sector should be worth about $40 billion by 2012. And it clearly has nowhere to go but up from there if current trends continue.

So, you may be thinking that all of this is very interesting and all, but why should I care? Well, I'd argue that there are at least a few good reasons to keep your eye on the exploding Indian healthcare market:

* Medical tourism remains the most obvious reason to be aware of Indian healthcare resources. After all, Indiacare will prove to be an increasingly credible alternative to high-priced elective U.S. procedures as the market there matures, climbing to as much as $2.2 billion by 2012 according to one CII-McKinsey study.

* Indian providers, in some cases, are getting the chance to build from the ground up as they serve a middle class that simply didn't exist before. I'm not suggesting that they're inventing for-profit healthcare, but they're doubtless finding new cash-flow, financing and collections solutions that aren't likely to pop into the heads of those immersed in our faulty system.

* Without the history of Medicare-funded build-out, excess bed capacity, CON processes, medical arms races and other costly boondoggles inherent in our current system, at least some Indian providers must have the jump on U.S. providers when it comes to overhead.

So, in short, I see India as a fascinating market to watch both as a competitor and as a learning lab for U.S. providers. I encourage U.S. healthcare administrators who have the resources to form alliances in India and learn what they can from the differences between the two systems. Ultimately, Indian providers may be your next, best cooperation partners, thousands of miles away though they may be. - Anne