The cradle, Bangalore: A study on high growth firms

Abstract

Health care sector in India had shown lackluster growth for a long time owing to lack of public health services and disinterest in medical research. As a result, the industry is highly unorganized and characterized by the lack of regulation and standardization of practices. However, the recent economic boom and increased awareness levels among the middle class population of over 350 million has spurred investment in the sector in the form of corporate general hospitals and boutique health centers. While overall quality of healthcare in India has significantly improved due to the entry of private players, public healthcare services in rural India continue to be poor largely due to shortage of supplies and doctors. The healthcare services market in India is expected to grow from INR 1513 billion in 2007 to INR 2654 billion by 2012i . According to the World Health Organization (WHO), Indian healthcare spending is very low as compared to other developing countries. In 2004, it was USD 34.9 billion or 5.2% of the GDP and the government spending was a meager 1.2% of the GDP. With the economy growing and incomes rising, healthcare spending is expected to rise to 5.5% of GDP (US$60.9 billion) by 2012. Private healthcare spending is likely to contribute the largest component in 2012, rising to INR 1,560 billion from the current level of INR 690 billionii We shall now analyze the growth drivers of the healthcare industry