Technology and Cost Development_f

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International SEPT Program

University of Leipzig

Essay:

Technological and cost Growth in the

Health sector of India

Name of Student: Debanil Majumdar

Email of Student: [email protected]

Matriculation Number: 3229521

Module: 103 New Scientific Discourses of SME-Promotion

Supervisor: Prof. Utz Dornberger

Date of submission: 15.03.2012


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Table of Contents1 Introduction

1.1 Major health concerns in India 4

1.2 Health sector in India 6

2 Force for change in Health Sector in India

2.1 Limitations of Indian health system 8

2.2 Public vs. Private healthcare system 10

3 Health sector reforms

3.1 Agent technology 11

3.2 Telemedicine 17

3.3 Medical equipment 19

4 Medical tourism 21

5 Conclusion 23

6 References 25

7 Bibliography 26


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List of Tables1

Schemes launched regarding medical concerns

in India

5

2 Cost Comparison of Important surgeries 22

List of Figures1 Explaining the Multi Agent System Web in the

rural sector in India14

2 A pictorial representation of Infothela 16

3 Flowchart for DOKOZA system 18

4 Flowchart of PSR and patient relationship 19

5 Reasons attracting medical tourism 21


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INTRODUCTION:

Indian society is distinguished by marked cultural pluralism and a

relatively young population that in 1999 has grown to one billion. Its

regional, economic diversity, complex social structure, extremes of poverty

and wealth make planning a challenging task. After 1949, a conscious

effort was made by the Government of India and Department of health and

Public services to invest in education of masses and Public and private

healthcare services. Constitutionally health services were the responsibility

of the provincial states, but the role of central government was to define

policies, provide a national strategic framework, financial resources and

specified infrastructure for medical education. Health Sector planning had

two major thrusts: the first, to build an infrastructure provide basic medical

care, maternal and child health services, health information, education and

referral services; and the second, to develop specific national health

programmes to control communicable diseases, provide family planning

and control severe forms of nutritional deficiencies. In the process of

establishing this goal a support system was developed which included

education for the masses, research and training, health information and

monitoring, drug and equipment production, etc.

Due to the race for competing in the overall planning process along with

the world, the health sector development plans have been stalled and this

resulted in the growth of urban centres keeping the economic growth inmind. Thus, though the annual growth rate rose from 2.8 percent in 1961-

1975 to 5.7 percent in 1980-1985 (I.Qadeer, 2000), significant regional

disparities have become more visible.

When it comes to healthcare, the estimated 1,205,073,612 Indians are split

into two groups. The middle and upper classes, which generally live in the


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urban areas of India, have access to quality medical care. However, the

majority of Indian, around 32.7% (World Bank report, 2010) lives below

the poverty line in rural areas and has extremely limited access to medical

care. Most citizens rely on homeopathic or cultural remedies. The stark

inequality of available healthcare has shaped the current market

environment and should always be kept in mind when exploring the

industry.

1.1 Major health concerns in India:

The World Health Organizations 2000 global healthcare profile ranked

Indias healthcare system 112th

out of 190 countries. This survey

highlighted three major health concerns for India that still are prominent

today. The first concern is the high vulnerability of young children. Among

children under five, 43.5% are underweight (the highest percentage in the

world) and have 6.6% die before their fifth birthday (which is quite high

compared to United States rate of 0.8%). The second major concern is

poor sanitation. Only about 30% of the population uses improved sanitation

facilities and this figure dips below 20% when focusing solely on the rural

population. The final concern is disease. The top three are malaria,

tuberculosis, and diarrhoea. Combined, these health concerns have

hindered Indias life expectancy: 63 for males and 66 for females, which is

considerably lower than the United States life expectancy of 69 and 75

respectively.

It is both challenging and expensive to attain the goal of universal health

coverage in a country where most of its people are unemployed or

employed informally. From 1948 to now, the Indian government has

launched a series of social health insurance schemes to ensure healthcare


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access to the middle and upper classes as well as the poor and other special

populations. The following table is a summary of the schemes launched.

Table 1. Schemes launched regarding medical concerns in India

NAME OF

SCHEME

YEAR OF

ENACTMENT

TARGET OBJECTIVE MEANS OF

FINANCING

ESIS:Employer stateinsurancescheme

1948 Employers withincome lessthanRs.15000/month& dependents

To achieveuniversal healthcoverage

Financed bystate govt.,employers andemployees

CGHS: CentralGovt. HealthScheme

1954 Govt.Employees andfamilies

To achieveuniversal healthcoverage

Financed bycentral govt.,employers andemployees

ICDS:IntegratedChilddevelopmentServices

1975 Malnutritionchildren underage of 6

To improvenutrition andhealth status ofchildren

Government,UNICEF,WHO &WORLDBANK

RSBY:Rashtriyaswasthya bimaYojna

2009 Poor belowpoverty line

Affordablehealth care to

poor

Federal Govt.(75%) & StateGovt.(25%)

NPHCE:NationalProgramme forhealth Care ofElderly

2011 Senior Citizens Provide theElderly easyaccess tohealthcare

Ministry OfHealth andfamily affair


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1.2 Healthcare Sector in India:

Buoyed by a congenial economic environment and demographic changes,

the Indian healthcare industry has experienced exceptional growth over the

past few years. The Health sector is currently estimated to be worth US$ 65

billion and is expected to reach US$ 100 billion by 2015 (Fitch ratings,

2012). The major factors affecting in growth are increase in population,

growing-lifestyle related health issues, cheaper costs of treatment,

improving health insurance penetration, increasing disposable incomes,

government initiatives and a focus on Public Private Partnership (PPP)

models. It analyses the wide and diverse spectrum of Indian healthcare,

with emphasis on opportunities in the areas of hospital infrastructure,

pharmaceuticals, medical equipment, diagnostic labs and emerging fields

like healthcare tourism, clinical trials & research and telemedicine. The

overall industry scenario is upbeat, propelled by a growing economy,

shifting demographics, rising disposable incomes, high incidence of

lifestyle-induced diseases, new investment avenues and a large pool of

talented and cost-effective human resource. The segments that are reaping

the most benefits are hospitals, pharmaceuticals, medical equipment

companies, pathological labs and other service providers, The Indian

government, on its part, is promoting this sector through positive

regulations like the introduction of the Health Bill, which proposes to bring

all independent bodies like the Medical Council of India (MCI), the Dental

Council of India (DCI), the Pharmacy Council of India (PCI) and the

Nursing Council of India (NCI) under a centralized authority. The

government is also increasing public expenditure on healthcare to 2.5

percent of GDP from 1 percent, encouraging public-private partnerships


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(PPP) in hospital infrastructure, and boosting medical tourism. Taking

advantage of the prevalent optimistic atmosphere, many foreign players are

looking to enter the country, especially in Tier-II and Tier-III cities, which

have huge untapped markets. The Indian healthcare sector is now being

more pushed into Privatised than being Public. This leads into the argument

that whether the government state or central is playing an integral part in

the welfare of the healthcare system in India. As a matter of fact

development tends to happen at the mere cost of rural life.

2. Force for change in the healthcare system:

As far as the public sector health services were concerned, the increasing

democratic aspirations of sections of population created pressures for

improved coverage and better facilities. Interestingly, the emerging middle

class, who had succeeded in acquiring a reasonably adequate standard of

living, lobbied for hi-tech hospitals which conformed to their concepts of

international standards of health care. The lower middle class and the poor,

who had little experience of the benefit of effective public health services,

reinforced this medicalized image of publicly funded health services. The

subsidies that were offered, along with free medical education and the

privilege of occupying important positions in public institutions and

medical colleges in most states, led to the rapid growth of an influential

private sector.3 The public sector was used as a spring board to acquire

status and power and then pressurized the public authorities to loosen

control over medical care. The private sector grew from polyclinics to

nursing homes, private hospitals and finally to the development of

corporate hospitals. 50 percent or more of the out patients and indoor

patients care is provided by private doctors, 67 percent of the poorest 40


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percent needing hospitalization rural areas, prefer to go the public

hospitals. Private sector whereas benefitted from government subsidies to

medical education and also import subsidies on equipment and drugs was

out of reach for the mass of poor population in India. 4

The national and international population control lobby demanded that the

infrastructure and programmes provided for the controlling of population

should be implemented. This pressure led to shift the investments done in

the health care system to the family planning system.

2.1 Limitations of Indian health system:

The points which lead to the proof of poor Indian Health system are as

follows:

Poor literacy rate.

In India, a very huge portion of the population is uneducated and

illiterate. This poses a big problem in providing good health care since

they are orthodox in thinking and are often reluctant to adapt to new

techniques or technologies.

Low socio economic status.

Distribution of wealth in India is not uniform. Some are very rich while a

major section of population, almost 26 percent, is living below the

poverty line according to UNICEF. These people cannot afford

medicines.

Lack ofqualified doctors.The growth of population is not proportionate to the number of doctors

graduating every year from medical colleges. This leads to the

mushrooming of quacks and under-educated doctors.


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Lack of control of government agencies.The government agencies are not very effective in checking the quality

of health care being provided. Private hospitals are charging hefty

amounts from patient even without providing sufficient treatments. Even

chemists, medical representatives and lab technicians are recommending

medicines.

Poor medical facilities.The medical facilities in government hospitals are not adequate or are

poorly managed. They lack expert doctors, equipment and other resources.

Moreover, management of these facilities lacks professionalism.

Political interference.

Due to political interference in the health care system, doctors and other

staff members are not performing as is expected. Purchases of equipments

and medicines are often not in accordance with the needs of the patient

population.

Excessive privatization.

There is no check on privatization of hospitals and clinics. This leads

to a situation where patients belonging to high-income group can afford

treatments while the poor are deprived of basic medical facilities.

Lack of facilities to tackle potential epidemics.

Whenever epidemic outbreaks occur in India, the limitations of health

system are revealed. This generally happens in rural areas where the

situation is quickly exacerbated due to poor facilities at these sites.


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2.2 Public vs. private healthcare system:

Private hospitals and private medical practitioners play a significant part in

delivering health care services in India. As the demand for health care has

increased, institutions in this sector have expanded widely in both urban

and rural areas. The relationship between patient and private practitioner

considerably influences the perceived and actual needs about health care.

This relationship is expected to play an important role in the control of

disease patterns and management. However, the developments in this

sector have prompted concern about the efficiency of resources, equity and

access to facilities, and the availability of financing mechanisms to support

private health care. Also, the efficiency with which the resources are used

in this sector has direct bearing on the cost and quality of services. The

existence of these health care institutions therefore has profound

implications for the present character of the Indian health care system, and

its future course.

The objectives of the present study are to review the role of the private

health care sector in India and the policy concerns it engenders. The

discussion suggests that policy makers in India should take serious note of

the growing influence of the private sector in providing health care in India.

Policy interventions in health should not ignore their existence and this

sector should be explicitly involved in the health management process. It is

argued that regulatory and supportive policy interventions are inevitable to

promote this sector's viable and appropriate development.

Thus, the situation of the Indian health system is grim and urgently

needs to be revamped. In such a scenario, conventional techniques of

providing health care would not be sufficient. Therefore, we introduce the


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concept of a multi-agent system (MAS) and technological advancement as a

means of alleviating some of the health care system in India.

3. Healthcare Reforms in India:

3.1 Technological Advancements:

a) Agent Technology:

An agent is a computer system situated within a particular environment,

which is capable of autonomous action in this environment in order to meet

certain designed objectives. Autonomous in this sense means that the

system is not able to act without the direct intervention of humans (or other

agents). It possesses control over its own actions and internal state

(Jennings and Woolbridge, 1998). An agent therefore is a software entity

that works continuously, autonomously and can communicate and co-

operate with other agents to demonstrate intelligence (Bradshaw, 1997). In

simple terms, an agent is a software component that demonstrates human

like behaviour. To understand agents let us look at some of the main

characteristics of an agent.

Features of an agent:

Reactivity: The ability to sense and act selectively.

Autonomy:The ability to take decisions towards its goals.

Collaborative Behaviour: Can work in collaborations with other

agents to achieve common goals.

Knowledge level communication ability: The ability to

communicate with persons and other agents with language more

resembling humanlike.

Inferential Capacity: Can act on abstract task specification using

prior knowledge of general goals and preferred methods to achieve


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flexibility; goes beyond the information given and may have explicit

models of self, user, situation and/or other agents.

Adaptivity:Being able to learn and improve with experience.

Mobility:Being able to migrate in self directed way from one host

platform to another.

Proactive:Being able to take self-initiative to solve problem in the

environment.

b) Multi-agent inhealth care:

Introduction of computer science in the field and its

application is a great touchstone in the development of these

agents in the field Healthcare system. It is not surprising that

the agents should be popular in this domain and much

research is ongoing. The following are some brief ideas of

some application that are being designed worldwide.

Patient Monitoring: The guardian system aims to help manage

patient care in the surgical Intensive Care Unit. As it involves with

different expertise to provide a good health care to patients, the

objective is to provide adequate information between all the

members of the critical care team.

Management of organ transplants: The aim of this research work

is to co-ordinate the management of organ transplants among the

hospitals and also aids the doctors in doing it.

Modelling Malaria with Multi Agent System: The prime objective

of this to educate the mass on malaria health care. As it is vector

borne disease it greatly affects the social and economic structure of


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the society. So as to prevent and educate the mass it can be a great

use to prevent this disease to spread.

Accessing healthcare Information: it involves an hierarchy of six

different types of agents

i. Users Personal Agent

ii. Personal brokers

iii. A database wrapper

iv. Medical Center Agents.

v. The department Agents

vi. The Doctors Agents

These agents work together to provide access to patients health record

to the doctors in a secured manner.

MEDUSA, a Multi Agent System established for electronic

health care records:

Due to the unsatisfying situation of vaccination in Germany as

recognized by the World Health Organization, MEDUSA is

concentrating on the improvement of vaccination rates For the

success of MEDUSA, contacts have been made locals and family

doctor and also to the Local Hospitals the outcome of this research is

quite useful to the doctors as well as for the general public.

Thus we can see that with the implementation of Agents in the field of

medical science and healthcare system becomes quite easy, effective and

procedural for both the patients and the doctors. Implication of this kind of

system has been started in India and generally in the beginning it is being

tried to reach out the masses in rural area, so that the patients can be

properly educated and taken care in due time. The following pictorial


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representation is going to show how an agent system works out in the rural

system of India.

Figure 1. Explaining the Multi Agent System Web in the rural sector in

India.


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Thus we can we see that the following are advantages of having this

system:

Patients with low socio economic condition can also experience

expert treatment.

Critical time of patients can be saved.

Feel of security between the doctors and patients.

Utilization resources.

Indias Human development Index gets improved.

Examples regarding the implementation of AGENTS in Indian Health

Care System:

Indian institute of Technology, Kanpur has taken a big initiative and

started to develop a change in the condition of the rural health care

system. Sehat Saathi is an initiative by them and it is being

responded well. The design of INFOTHELA is a great breakthrough

on their part. The INFOTHELA project was first launched in

Kanpur, India. It is used to provide front end confirmation from the

end patient to the trained non-medical professional operating in

under directions from a back end composed of doctors, pathologists

and other health care professionals for diagnosis and treatment.

INFOTHELA is designed to exchange information through fax,

internet, phone, etc. The design is a mobile care unit similar to a

pedal rickshaw for use in rural villages in order to provide access to

the poor. The pictorial representation can give some light on the

implication of a sophisticated yet simple means of reaching out to the

masses in the rural areas of India (Infothela, 2003).


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Figure 2. A pictorial representation of Infothela

"Mobile Based Primary Healthcare Management System" is also one

of the mentionable developments by the centre for development and

advanced computing (CDAC). It is the software which enables to

keep a patient database system, patient-doctor interaction and also

medical data acquisition (e.g. electrocardiogram images, vital signs,

blood pressure, etc.). With rapid penetration of mobile phones into

the rural market, this programme promises to yield great success as it

will be using SMS text messaging services, web applications, 3G/4G

software and also an interface which supports multiple regional

languages. The program will work to develop a Wireless Application


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Protocol (WAP) web gateway for integration with General Packet

Radio Service (GPRS)/3G systems in order to be used on any mobile

device (CDAC ongoing Project, 2009)

The Department of Information Technology (DIS) has developed a

project named ONCONET in venture with CDAC. It is a web based

medical Image processing solution for capture, storage, transmission

and processing of medical images from biomedical equipments and

implementing a comprehensive telemedicine network for a Cancer

Institute in Chennai and also to other seven nodal centres at other

parts of Tamil Nadu, Andhra Pradesh (CDAC onconet Tamilnadu,

2009)

3.2 Telemedicine:

"Dokoza" system is a great breakthrough in the world of telemedicine. It

was first established in South Africa. It is a simple system which includes

the using of SMS and mobile phone technology. It was a great

breakthrough in producing medical information management, doctor

patient communication and also transaction process.

With the implementation of this system it can be seen that the rate of

different communicable diseases where reduced in percentages in South

Africa. "Dokoza" system is a three tier system which can be showed in by

the following pictograph:


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Figure 3. Flowchart for DOKOZA system

Main purpose of this system was to create awareness among the masses for

the treatment and preservation of AIDS/HIV and TB. This process was an

effective one and also helped in creating awareness and also reaches out for

help when needed by the patients. This programme didn't charge any

upfront costs in the implementation stage. The only expenditure was the

sending of the text messages. Thus, we can see that with its implementation

the client will be the Government Agency and the patient's health alerts,

appoint reminders, medicine compliance, receipt for several test and so on

will be free of any extra charges.

The Indian Government has taken a step forward in initiating this idea and

to be introduced among the masses and as the cellular users in India is quite

large, it will leave no stone unturned in the course of development and also

helping the patients to realise and act immediately. The process of tele-

practice in pharmaceuticals has already been started. The infrastructure of

Collection of Information from the patients inthe form of text messages or other form ofcommunication.

Compiled into a order by Patient Management

Clinician (PMC). Anyone with a little technicalknowledge can operate up on this.

The Information gathered is then deliverd tothe back-end and then monitored by

proffesionals (Doctors).


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the domestic pharmaceutical sector is highly fragmented with 70% of the

market being controlled by over 10,000 different firms

(PricewaterhouseCoopers LLP 2007.). The wide fragmentation in the

pharmaceutical presents an opportunity in development of new systems of

operation that can cut through the chaos and makes life easier and simple.

The following pictograph explains a process that can be simplified among

the doctor, Pharmaceutical Sales Representatives (PSR) and the patients:

Figure 4. Flowchart of PSR and patient relationship

3.3 Medical Equipment Manufacturing:

The Indian market for Medical Equipment was valued at around $ 2.6

billion in 2011, witnessing a growth of 15.6 per cent over 2010. A rise in

the number of secondary and tertiary care hospitals and advanced

diagnostic centers and increased requirements for healthcare facilities has

created a demand for low cost sophisticated devices and equipment. These

Diagnosis report of a patient by a doctor is stored in a server which is common

link between the doctor and the PSR

On receiving the diagnosis data the PSR immediately contacts the patient and

supplies him the required medication and also further information regarding

future check ups.

The Patient finally is satisfied both by the diagnosis and also by the fact that

the supply of medicines and reminders regarding further check ups is also

being monitored for future references.


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devices and equipments must comply with global quality standards and

provide accurate treatment to individuals. Historically the penetration of

medical devices w as low and inadequate, but owing to the current

regulatory structure by the Government there have been an increase in

domestic manufacturing of medical equipment in the last couple of years.

The Medical Technology Parks proposed by the Government of India is

also encouraging domestic manufacturing of medical equipment.

International companies like 3M, Becton Dickinson, Hollister, Phillips

Medical System, Abbott Vascular, Boston Scientific and GE Healthcare are

also using India as a manufacturing base by either setting up facilities of

their own or by acquiring domestic manufacturers. Some of the leading

Indian manufacturers of medical devices and equipment are India

Medtronic, BPL Healthcare India, Sushrut Surgicals, Trivitron Diagnostics,

Nidhi Meditech System, Harsoria Health Care, Wipro Technologies, HD

Medical Services and HCL Technologies. A few examples of innovations

done by both domestic and international manufacturers with a primary

focus on the Indian healthcare market are:

Development of in-vitro diagnostic equipment through the R&D

base in Mumbai by Transasia Biomedicals .

Creation of an external fixator for the Indian market by the Sushrut

Adler Group

Development of a knee implant as well as a reusable stapler for use

in surgeries at price points, which are acquiescent to the Indian

market, by Johnson & Johnson

Development of a screening device for cardio-vascular diseases,

which is suitable for use in rural settings, by Roche Diagnostics


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Creation of a low cost ECG machine and a low cost Ultrasound

machine for the Indian market by GE Healthcare

Development and launching of a low cost Catheterization Lab for the

Indian market through acquisition of domestic manufacturer by

Phillips Medical Systems.

4. Medical Tourism:

Medical Tourism is a major external driver for the growth of the medical

devices and equipment market. With increased competition for healthcare

delivery and promotion of Medical Tourism, International Quality at

Reduced Price has become the key theme for survival. The National

Accreditation Board for Hospitals and Joint Commission International

operate accreditation programmes for healthcare organizations. Now the

question arises WHY INDIA? the answer to the question can be simply

answered by the following pictograph:

Figure 5. Reasons attracting medical tourism


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The Indian Medical Equipment segment is having competition from the

imports from European companies and Japan to cater to the needs of

medical tourists in India with the most promising sub-sectors being

Medical and Surgical Instruments, Medical Imaging, Electro-Medical

Equipment, Orthopaedic and Prosthetic Appliances, Cancer Diagnostics

and Ophthalmic Instruments. However the significant rise in input costs,

due to component procurement from outside India and rupee exchange rate

fluctuations, and lack of test centers availability in the country are acting as

key barriers to the growth of this industry, which has a very good prospect

for exports apart from meeting the demand for low cost quality care and

diagnostics for the Indian population. The following pictorial

representation is quite an example for which India attracts medical tourists:

Table 2 Cost Comparisons of important surgeries

SURGERY U.S.A INDIA THAILAND SINGAPORE

Heart Bypass $130,000 $10,000 $11,000 $18,500

Heart valve replacement $160,000 $9000 $10,000 $12,500

Angioplasty $57,000 $11,000 $13,000 $13,000

Hip replacement $43,000 $9,000 $12,000 $12,000

Hysterectomy $20,000 $3,000 $4,500 $6,000

Knee replacement $40,000 $8,500 $10,000 $13,000

Spinal fusion $62,000 $5,500 $7,000 $9,000

(Source:http://www.patient-help.com/medical-tourism-india/)
http://www.patient-help.com/medical-tourism-india/http://www.patient-help.com/medical-tourism-india/http://www.patient-help.com/medical-tourism-india/


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5. Conclusion:

In a country where the gods are well treated and respected more than

doctors or real human being, with a percentage of 51% - 70% people under

poverty line, the development of technology in the medical or health sector

is only going to help the top 10% population of India. It is a shame on the

part of our government that although we are competing and establishing

ourselves among the top 12 nations of the world, but it is quite sad to say

that with a trillion dollar G.D.P still India only spends 1% of its G.D.P on

the development of the health sector. Based on the current state of

healthcare financing in Indian States through Government sponsored

schemes, private sector interventions and the recent string of PPP Projects,

it is understood that there is still a long way to go in terms of uplifting of

the healthcare sector and reaching the desired health goals. It is very much

evident that huge investment will be required in developing/upgrading of

healthcare infrastructure, in order to improve accessibility and quality of

care,the following areas can be considered as catalyst on this journey:

Establishment of state-specific PPP(Public Private Partnership)

policy and framework

Refocus government expenditure to maximize healthcare gains

Framework for user payment

Segment the user population based on their economic condition and come

up with a framework for their contribution towards cost of healthcare,

when availing Government sponsored schemes; this contribution could be

utilized towards maintenance of Government health centers/facilities.


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Private sector incentive to augment government spending

Innovation in Health Insurance for Greater Coverage

Introduction of Taxes for Government Healthcare Funds

Regulating the Prices of Essential Drugs

Building capacity for medical education

Promoting the indigenous development of Medical Equipment

market for cost-effective quality delivery

Currently, Healthcare System needs process innovation and not product

innovation. With this motto it is quite expected to yield success and smile

on billion lives.


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PR Newswire. (2013). Indian Healthcare Industry - 2012, accessed fromhttp://www.prnewswire.com/news-releases/indian-healthcare-industry---2012-192345131.htmldated 21/06/13.

World Health Organization. (2000). The world health report 2000: health systems:improving performance. World Health Organization. Geneva.

KPMG. (2010). Healthcare: Reaching out to the masses,http://www.kpmg.de/docs/Healthcare_in_India.pdf

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