India’s fast-evolving healthcare

industry on the cusp of a digital

revolution driven by the
Indian consumer
A Bold Vision for 1 Billion Digital
Health users in India by 2030

March 2022

A report by

SOCIAL MEDIA REPORT

JULY / SEPTEMBER 2020
FOREWORD

Across the healthcare spectrum, technological innovations continue to be

developed and made available to consumers at breakneck speed. Within this
evolving healthcare landscape, care is becoming more personal, more patient
centric, less episodic, more omnipresent and fully embedded in the lifestyles of the
population. Innovative use of digital technologies therefore creates opportunities to
enhance patient experience and at the same time optimize care delivery to ensure
affordable health access to all.

Resulting changes in the fundamentals of healthcare delivery affect all components

of the healthcare value chain – from outpatient care enabled through telemedicine,
to inpatient care optimized through remote care and home health enabled through
digitalization, IoT and other interventions.

The COVID-19 pandemic has catalyzed both technological and behavioral change –
on one hand, forcing people to embrace digital innovations all walks of life and
especially healthcare, and on the other, creating significant pressure on health
systems and, exposing supply chain lacunae globally. As a large and growing
healthcare market and a hub for innovation and digital entrepreneurship globally,
India is poised to see a paradigm shift in digitally enabled healthcare.

In this context, this whitepaper seeks to explore how global trends and success
stories in digital health will be relevant in the Indian context, what opportunities
could emerge in the near future, how ready is the ecosystem to adapt to the
changing landscape, how recent policy interventions have set the stage for
accelerated adoption of digital health, what are specific challenges that may need
to be overcome and how these translate into innovation opportunities for Indian
healthcare players.

Mr. Siddhartha Bhattacharya Dr. Shravan Subramanyam

Secretary General, NATHEALTH Managing Director, GE Healthcare

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EXECUTIVE
SUMMARY
Digital technology has a transformative power that eclipses the capacity of any
other force behind earlier socioeconomic revolutions. In healthcare, digital
technology is creating a quantum shift, one that could transform healthcare in India
almost beyond imagination. India could have 1 billion digital health users by 2030,
enjoying an inclusive health system where healthcare keeps expanding but costs
keep falling, a system that efficiently prevents and treats diseases, and responds to
individual lifestyles and disease profiles with tailored treatments, all at an
affordable price.

This is a future that the digitisation of healthcare can achieve. But only if the
stakeholders involved step up to the challenge.

The demand already exists. India already has 400 million digital health users, using
available services such as tele health, home health, home testing, e-pharmacies and
other digitally powered offerings, even without much innovation by large healthcare
providers. A survey by Arthur D Little to identify what drives digitized healthcare
adoption in India showed up to 65% acceptance of digital health solutions among
customers who use e-commerce services. Significantly higher adoption of digital
health tools was reported by patients who had long-term disorders such as cardio-
vascular disease, diabetes, and hypertension. The pandemic forced people to use
digital channels for care needs. Having experienced the benefits of digitally enabled
healthcare delivery, consumers now consider them a necessity.

However, as too often in India, supply lags well behind demand. The underpinnings
are already there—India now has a sturdy digital backbone via Ayushman Bharat
Digital Health Mission (ABDM). Aiming to capture health data across physicians,
providers and patients, the platform promises interoperability, flexibility, security,
scalability and wide access.

It is now up to healthcare providers, startups, technology providers, investors and

other stakeholders to develop digital health offerings that meet and stimulate
demand. Like nature, the economy abhors a vacuum—those who tarry could find
that others have already captured the opportunities.

At the moment, the opportunities abound. What India needs is effective, accessible
and high-quality healthcare solutions that provide equitable access and that can be
rapidly deployed and scaled up.

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Conventional healthcare capacity is highly unlikely to catch up with the demand and
supply gaps the country suffers now. Digital solutions are the answer, building on
the deep penetration of smart devices and increase in connectivity that the country
has invested in over the past decades.

The pandemic catalyzed the adoption of tele health, home health, home testing, e-
pharmacies and other digital offerings. But there is still a lot of room for growth.
Meanwhile, some solutions remain largely unexplored including e-diagnosis and
tech-enabled home health and more mature e-pharmacy solutions.

For conventional healthcare players, health technology startups and investors, this
is the time to enter and build a hard to beat position.

How they could do so and the policy and regulatory support they will need can be
summarized as follows:

Providers need to:

1. Develop “Digital First” strategies instead of “Digital as a Bolt-on” for conventional
businesses
2. Create digital health offerings that are integrated – from preventative health, to
patient first contact, to point of care delivery, onwards to post care follow up
and then, recuperative care
3. Build digitally enabled supply chains that are resilient, scalable and efficient

Regulators and Policy Makers should consider:

1. Providing incentives and support for legacy players adopting digital services
2. Developing policy that pushes legacy players towards adopting digital health
offerings
3. Creating a regulatory framework that drives trust in digital solutions, ensures
data security and addresses other consumer concerns across less mature
offerings
4. Encouraging startups through the right regulatory and policy support.

Investors and Startups should:

1. Develop an attractive, independent investment ecosystem for Digital First
healthcare plays as against digital health investments as a part of tech or
healthcare investments
2. Start targeting brick-and-mortar services from an integration perspective –
where some momentum is already observed, notably with large players like
Practo and Pristyn Care
3. Target Digital as a key parameter for investment ideation, deal identification,
transaction screening and post-deal value creation
4. Finance digital health innovations and platforms through greater emphasis on
HealthTech and InsurTech startup ecosystems.

Barnik Chitran Maitra

Managing Partner, India and South Asia
Arthur D. Little

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 Global Trends &
Learnings on Scaling
Health-Tech Adoption &
Driving Innovation in
Healthcare Delivery
 India’s fast-evolving healthcare industry on the cusp of a digital revolution driven by the Indian consumer

Key Trends Impacting the

Healthcare Sector Globally

The future of healthcare is being shaped by several trends. Fundamental shifts in

demand and epidemiological characteristics, demographic and access improvement
in healthcare, emphasis on supply chain resilience, changing consumer preferences
and views on healthcare, increasing automation, standardization and efficiency are
driving the evolution of the healthcare sector and are driving digital health and
health-tech innovation.

Globally, Non-Communicable Diseases (NCDs) are expected to drive a lion’s share of

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disease burdens. NCDs are already the leading cause of mortality and disease
burdens globally, contributing to over 70% of deaths globally before the COVID-19
pandemic. The shift has already permeated from developed countries, to
developing countries and notably India as well. As many as 75% of NCD deaths
globally now occur in developing countries like India. Key ailments like
cardiovascular diseases, cancers, respiratory diseases and metabolic disorders –
drive a majority of the mortality burden in India as well.

Notwithstanding the impact of COVID-19 in the short term - comorbidities and risk
factors such as diabetes, hypertension, cardiovascular susceptibility are well known
to have driven significantly higher mortality amongst vulnerable patient groups
during the pandemic as well.

As life expectancy increases globally, and especially so in developing markets, the

need for healthcare services are expected to increase significantly. Access to better
healthcare improves globally. Expected increase in proportion of people above the
age of 60 is set to grow 1.5 times over the next 20 years (14% in 2021 to 20% in
2040).2

Elderly population above 80 years old is likely to grow from about 125 million
globally to over 434 million by 2050 with sizable growth in this demographic being
contributed to by large and (currently) developing markets like India. Public health
agencies and experts also suggest that the incidence of long term ailments and
chronic conditions such as dementia and Alzheimer’s will continue to grow.
Estimates point to an increase of this incidence from 47 million in 2015 to 75
million by 2030.

Demand for this demographic segment has larger scale in developed countries with
older demographic bases at present. However, as the populations in developing
countries age further, younger population ages and fertility rates stabilize -
currently developing economies can also expect to see the elderly segment
becoming increasingly critical.

[1] World Health Organization: Non Communicable Diseases

[2] World Population Review

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 India’s fast-evolving healthcare industry on the cusp of a digital revolution driven by the Indian consumer

Figure 1: Population Pyramid Evolution – Global

(Population in age brackets – 2020 and 2050 estimates)

Healthcare delivery paradigm shift

towards integrated care driven by need
for resilient, efficient and scale based
solutions in healthcare
As need profile evolves, the care delivery approach to address the demand is also
evolving. All dimensions of the care delivery paradigm are being impacted – from
overall targeted objectives and design criteria for the healthcare ecosystem, to
focus of treatment, service delivery approaches, novel care delivery settings for
optimization, shifting accountabilities of health outcomes from physicians to a
collaborative approach with patients, to funding of health systems on activity basis
to an outcomes / outputs basis.

Figure 2: Evolution in the Care Delivery Paradigm Globally

The emerging paradigm will force care delivery models to go beyond just delivering
care outside the provider infrastructure and start to make healthcare more
omnipresent with the health consumer. Specifically in an Indian context, care
delivery models need to also evolve and create more equitable and democratic
access – servicing the marginalized and at-risk population groups more effectively.
Tech enabled business models in healthcare therefore likely need to be rethought
to create infrastructure and service offerings designed for such delivery modalities.

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 Global Digital Health
Trends & Digital
Enablement of Healthcare
 India’s fast-evolving healthcare industry on the cusp of a digital revolution driven by the Indian consumer

Technology enabled change in the healthcare space has also seen significant
acceleration in recent years – especially from a perspective of development of new
treatment modalities and change in clinical methods. Even traditional areas of
technological adoption have seen significant and rapid growth. New vaccine
developments are a benchmark example of effective technological adoption in
fundamental healthcare delivery. Complex vaccine development activities, typically
taking years or decades have been accelerated to be completed in months due in
large part to technological advances in genomic sequencing, collaborative research
with leading universities and research programs, and rapid scale up of
technological offerings.

Shift away from digitalization of

information, to digital health

Use cases of digital technologies in healthcare target a shift in the way information
is received and processed in the healthcare system. The emphasis of emerging,
scale based solutions is to move away from pure digitalization of information, and
towards developing digital solutions in care delivery.

Health data, at the same time is diverse and collected across a variety of platforms
in a complex healthcare ecosystem. Systemic sources of information could be
supplemented by data and interpretation of physical testing / diagnosis.

The diversity and lack of unified structure in collected information represents

challenges that can be addressed at scale. Connecting collected data from patients
and filtering relevant information for clinical decision making is critical for efficient
and effective care delivery. Availability of standardized, curated and accurate
information regarding patient demographics, health history, prior complications,
comorbidity status and severity are all critical decision points that can be integrated
for clinical decision making.

Figure 3: Case Study - Lombardy Digital Hub for Health Data

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 India’s fast-evolving healthcare industry on the cusp of a digital revolution driven by the Indian consumer

Scale based clinical data collection and standardization can then support Health
Information Networks and Exchanges that enable research activities such as clinical
trials, payor optimization and transfer of information amongst different health
information systems that may be in large scale use, in addition to supporting
treatment decisions by physicians.

Remote Health and Virtual Care Delivery

Becoming Mainstream
With patient care moving away from facility based treatments to virtual models,
ecosystem trending towards maximizing care access to all patient groups and
improving access to telecommunications infrastructure, multiple remote health and
virtual care use cases are gaining significant traction globally. These include
offerings across the entire spectrum of patient care – from tele-diagnosis and tele-
consultations services which are lower complexity in overall delivery, to e-ICUs and
Virtual Hospital concepts. Telemedicine, virtual hospitals, and e-ICU concepts have
already seen mainstream traction, catalyzed by COVID-19 related travel restrictions
and infection issues. In addition, the use cases for Telemedicine concepts also allow
for lower cost higher volume countries like India to become referral centers for
higher income, lower volume countries.

Figure 4: Case Example - E-ICU as a Virtual Care Platform

COVID-19 as a catalyst of change

in Digital Health
COVID-19 has had a significant impact on the growth of technology and digital
solutions across several use cases in healthcare globally. Solutions have, as a result
of COVID, become more personalized, cognitive and integrated within the lives of
patients and providers. Adoption of digital tools such as tele consultations, virtual
diagnosis, digitalized mental health support, home testing and report generation,
and e-pharmacies.

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 India’s fast-evolving healthcare industry on the cusp of a digital revolution driven by the Indian consumer

ADL’s interviews with senior leaders indicates that a large number of the
beneficiaries / early adopters of these programs have been patients with chronic
ailments with a need for periodic follow ups and patients who require significant
post-acute recuperative care, and other similar patients in vulnerable comorbidity
groups

Emerging potentially scalable consumer

use cases from key global case studies
AI ML Enhanced Decision Making and Automation:

A broad set of offerings powered by AI/ML applications in healthcare are gaining

traction globally. First, supporting clinical decision making, diagnostics, laboratory
and other direct care delivery aspects are getting increasingly automated.
Diagnostic / lab review, decision making support short of consultations and other
care delivery automation activities are under consideration. Second, AI and ML
applications in non-therapeutic interventions in mental health and wellness are also
areas of deep ongoing exploration. Third, AI/ML solutions automating and
enhancing routine processes such as coding, logging, case tracking and
documentation activities post procedure are also targeting efficiency and physician
bandwidth enhancement opportunities. NLP applications in patient information
capture through ChatBots, supporting preliminary self-diagnoses for pre-
consultation reporting and pre-diagnosis / lab prep for patients also have the
opportunity to enhance efficiency.

Health Personalization:

With a shift away from episodic care, towards preventative care, personalization of
health is becoming a key focus area within the Digital Health space. Consumers of
health services are also more aware than ever before. Personalized health solutions
can therefore be a critical component of the overall preventative care approach in
the market. Gamification and reward also ensure that digital healthcare is
embedded deeper in the lifestyles of patients.

Several technological developments such as miniaturization and acceptance of

wearable devices by the population support adoption of personalized healthcare.
As technological maturity remains lower than the levels required to enable clinical
interventions through wearable tech, the segment is currently restricted to higher
level health data metrics, as other health sensor technologies become mainstream.
Consensus estimates of growth in the wearables segment point to 13-15% growth
over the next five years, with the market volumes set to grow three-fold over the
next 4-5 years to close to 775 bn devices every year. 3

[3] Mordor Intelligence

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 India’s fast-evolving healthcare industry on the cusp of a digital revolution driven by the Indian consumer

Figure 5: Case Example – Dacadoo, personalized HealthTech and InsurTech

Augmented Reality / Virtual Reality for Training and Care Delivery:

With COVID-19 creating significant travel barriers since 2020 and increasing
prevalence of low-latency, high speed network connectivity worldwide, Augmented
Reality / Virtual Reality based applications are gaining significant traction. AR/VR
based healthcare training for physicians, specialized technicians and other clinical
delivery staff are becoming increasingly mainstream globally, especially in surgical
and other specialized therapy areas where availability of physical trainers may be
limited. Mixed reality offerings also can offer not just the audiovisual experience
but significant components of tactile feel in several therapy areas. In addition,
patient linked use cases for AR/VR are also likely scalable and appropriate for
management / enhancing functional outcomes in patients with behavioral and
developmental disorders.

Predictive Modeling:

Capacity planning and surge flow management challenges at a healthcare system

level have been brought to light by the COVID-19 crisis. Given facilities and policy
makers now capture large amounts of data from clinical indications to case
progression, geospatial data and clinical and non-clinical demographic data –
predictive modeling may allow multi-factor analysis, identification of growth and
evolution patterns in epidemiology to assess capacity requirements on a dynamic
basis.

Figure 6: Use cases in Digital Health

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 Impact of Digital on
Healthcare Operations
from Select Global
Case Studies
 India’s fast-evolving healthcare industry on the cusp of a digital revolution driven by the Indian consumer

Digital health offerings are accelerating innovation and are deeply impacting
procurement functions in the healthcare sector. Healthcare facilities tend to utilize
a wide variety of consumables. A typical healthcare facility may stock several
thousands of medical product types and SKUs within their inventory and ensure
inclusion of tens to hundreds of thousands of SKUs within their overall formulary -
for procurement and usage.

These products are also widely varied in their characteristics. Storage requirements
such as temperature, humidity, lighting etc may vary significantly and have a direct
impact on quality of clinical outcomes. Clinical shelf life may vary from a few
months to a few years for products. Technological changes to products and delivery
mechanisms may change. Product recall and safety management create complexity
in supply chain management. Products varying from lower cost basic medications to
high end, high valued medical devices, to legally controlled substances need to be
procured, stored, managed and tracked through a unified ecosystem by healthcare
enterprises. Critically from an enterprise viability perspective, procurement cost
and pilferage risks may be high or prohibitive as well – which healthcare
organizations need to balance. All these complexities necessitate a responsive,
effective and adaptive supply chain management solution for healthcare players.

Big data and tech enabled use cases in procurement thereby potentially enable the
adoption of value based procurement opportunities in the healthcare sector.

The Indian market has its unique share of challenges in this context, given the need
for cost efficiency of the solution. Given lower affordability of healthcare in the
country and lower penetration of health insurance among the population base,
viability of specific use cases for supply chain management. Leading CTO / CIOs in
the healthcare space in India, interviewed by ADL interactions make the case for
data driven and digitally enabled procurement – but also highlight the criticality of:
Right usage of hard technology for product identification and segregation based
on criticality and value of the product vs investment required to collect
information on product stocks / usage
Standardization of materials for procurement
Ensuring effective governance around the supply chain to ensure appropriate
usage of materials
Enabling genuine integration with financial systems and usage of tech platforms
as their core
Transition planning from non-digital approaches to digital approaches
Ensuring multidisciplinary team engagement at solution design phase and
training of workforce to ensure alignment with targeted procurement outcomes

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 Indian Digital Health
Landscape & Demystifying
the “Indian Digital
Health Consumer”
 India’s fast-evolving healthcare industry on the cusp of a digital revolution driven by the Indian consumer

Overview of the key constituents of

Digital Health in India
Most prominent and mature digital health platforms in India have historically
targeted enhancement of front end consumer facing activities within the care
pathways. Penetration of services have largely centered around peripheral activities
to core healthcare delivery. Activities such as scheduling of visits and appointments,
physician / practitioner identification, home diagnostics / sampling, case history
management have seen traction in the Indian marketplace.

Four broad categories of product suites largely exist in the consumer facing
activities:

Integrated Health Provider Applications – cover a wider variety of healthcare

activities – from Physician selection, appointments, lab and testing, medical
records and other associated core healthcare delivery services. Allied services
such as claims and payment management, billing etc may also be provided.
Primarily developed by large scale players with significant capacity, geographical
outreach and internal system maturity to support integration of offerings.
Targeted value proposition for these applications is to ensure customer
stickiness, patient relationship management, and long term convenience for
patients – especially for chronic care cases.

Service Specific Health Provider Applications – cover a limited but selective

offering of specialized services such as labs, diagnostics, dentistry etc. with key
services including scheduling, home pick up of samples and report delivery.
Targeted value proposition for these applications is largely to expand outreach
and enable wider patient capture on a shorter term basis

Integrated Health Aggregators – cover a wide variety of services including

consultation scheduling, tele-consultations, lab sampling, diagnostics selection
etc. but with no / limited support from brick and mortar infrastructure under
own umbrella. Primary focus is to enable differentiation through better
information sharing with patients and their family members.

Service Specific Health Aggregators – Cover narrow / niche segments of care

delivery and operate as information sharing platforms with consumers, with
aggregation within a limited service set.

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 India’s fast-evolving healthcare industry on the cusp of a digital revolution driven by the Indian consumer

Figure 7: Examples of Healthcare Application Categories Prevalent in India (Illustrative)

From an operations standpoint, a variety of digital offerings have been deployed by

healthcare providers in the country. These span from information management
applications such as HIS platforms, Supply Chain Management and Vendor
Management platforms, to integrated financial and Management reporting systems.

ADL survey findings on Digital health

adoption and acceptance amongst the
Indian consumers
In order to understand the core drivers underpinning the digital health consumer in
India, ADL commissioned a broad-based consumer survey administered across the
country. Longitudinal data collected from prior surveys and Focus Group
Discussions were also used to draw upon recent trends and validate findings and
understand trends.

Several key trends have been observed in the customer survey that starkly bring to
light the behavioral trends observed amongst Digital Health consumers in India.

1. Deep penetration of Digital Health solutions in the Indian consumer

market, with significant headroom for growth. ADL’s survey indicated
significant traction amongst consumers on the use of online pharmacies,
physician consultations, fitness and wellness applications. All of these
applications observed between 35-65% acceptance amongst customers who
utilize e-commerce services. This indicates that as many as 400 million Indians
already have experience utilizing healthcare services.

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 India’s fast-evolving healthcare industry on the cusp of a digital revolution driven by the Indian consumer

This indicates that as many as 400 million Indians already have experience utilizing
healthcare services. Specifically in case of online pharmacies, experiential similarity
vis-à-vis e-shopping and online retail, already deeply penetrated in the . Lower
traction in E-diagnostics – understood to be on account of perceived quality and
accuracy of diagnoses, patient desire not to interfere with physician
recommendations, and the facility operations (turnaround time, reputation etc.)

Figure 8: Digital Health Offerings Usage Amongst E-Commerce Users

In addition, a clear divide is visible amongst the key age groups in the acceptance of
digital health tools – with the 40+ segment being about 1/3rd as likely to use digital
tools, largely because of familiarity and tool awareness amongst the younger
population. The opportunities do remain relevant for this segment given routine
health examinations and lifestyle ailments start to emerge amongst the population
within the 41-50 y age bracket.
Figure 9: Doctor consultation adoption preferences by age group

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 India’s fast-evolving healthcare industry on the cusp of a digital revolution driven by the Indian consumer

2. Larger value pools in Tier 2 and 3 cities are becoming more evident for
Digital Health Offerings. With the exception of adoption of e-diagnostics and
online pharmacies which have some variance, all tiers of cities are observed to have
comparable degree of adoption for digital services indicating that the technology
divide prevalent in the past in India is now abating. Tier 2 and 3 customers are also
becoming increasingly aware of the benefits of digital technologies in healthcare
and now demand conveniences from digital health offerings.

Figure 10: Adoption of Digital Health Offerings in Tier 1, 2 and 3 Cities in India

3. Stickiness is high, patients using digital healthcare services more frequently

tend to keep using them. Significantly higher adoption of digital health tools were
reported by patients who had long term disorders / ailments such as CV disease,
diabetes, hypertension or allied indications. These patients tend to use healthcare
services more regularly and in a more organized manner. As these patients adopt
digital healthcare solutions and appreciate value, they keep utilizing platforms
more and more. Digital Health solutions must therefore target greater usage of
digital tools and track the value of health information communicated to the
consumer pool.
Figure 11: Adoption of Digital Health tools by Patient Type

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 India’s fast-evolving healthcare industry on the cusp of a digital revolution driven by the Indian consumer

While chronic patients do appear to have a higher degree of adoption of digital

health tools, COVID appears to have catalyzed sustained use of digital healthcare
tools in the country. Patients were initially compelled to utilize digital channels for
care needs due to movement restrictions and infection risks. However, as benefits
of digitally enabled healthcare delivery were actively perceived, these are now
increasingly considered as necessities. It is no surprise that once consumers got
accustomed to using digital health services, only ~14% of respondents indicated the
preference to go back to offline modes for health.
Figure 12: Post COVID Preferences for Use of Digital Health Applications

4. Seamless integration across the consumer journey will be critical for

success. Key pain points for consumers remain in the brick and mortar components
of health – things that can potentially be resolved through digital health offerings,
but only if deeper integration of tech-solutions with Brick and Mortar care delivery
are made. Physical interactions if minimized either through implementation of
Videoconferencing, Telehealth or remote healthcare solutions, or through
application based updating and support, or through operational transformation to
ensure ready access to findings and medical supplies can also be enabled digitally.

Figure 13: Key Pain points identified by consumers in healthcare services

(# of respondents)

In addition to the above, several experiential and non-transactional aspects of

digital care delivery are considered to be important by customers.

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 India’s fast-evolving healthcare industry on the cusp of a digital revolution driven by the Indian consumer

Figure 14: Customer reasons for remaining on digital platforms

5. Patients have a predominant preference for integrated applications

providing the whole spectrum of healthcare offerings

Figure 15: Integrated Application Preferences – Focus group discussion findings

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 Digital Health
Opportunities in India
 India’s fast-evolving healthcare industry on the cusp of a digital revolution driven by the Indian consumer

The case for at-scale digital adoption

in India
The Indian healthcare system faces several structural and strategic challenges
which create opportunities for novel and innovative healthcare solutions. India’s
healthcare capacity – both in terms of infrastructural capacity and caregiver
coverage remains behind regional and international benchmarks.

In terms of Bed Density, India currently ranks lower than both international
benchmarks, as well as a majority of regional economies. This is compounded by
the fact that in Tier 2/3 cities and below, healthcare systems and access are
significantly challenged and undersupplied.

From a care delivery staff perspective as well, India is largely under-resourced to

deliver care to its citizens, as compared to international as well as regional
benchmarks. Plugging these gaps conventionally may require incrementally training
and developing thousands of physicians, nurses/midwives and other clinical staff,
likely a herculean challenge given the time required to educate, train and nurture a
high performing healthcare practitioner and the limitations that exist in health
education infrastructure in the country.

Figure 16: Key healthcare metrics - India and Comparators

At the same time, significant strides have been made in the recent past in India
from a utility infrastructure (Power access, water access etc), telecommunications
infrastructure deployment and information access perspective – which create an
effective foundation for digital health platforms and solutions to be established on.
India now boasts the second largest number of cell phones anywhere in the world
and smart device penetration stood at about 54% in 2020, up from only 22% in
2016. With omnipresence of low cost smart devices, penetration is expected to
reach near full saturation by 2030-2035. India also had amongst the highest data
usage globally, at about 12 GB per month per user in 2020, a number which is
expected to double by 2025. As 5G network access becomes accessible to urban
centers, the digital revolution in healthcare will have an effective connectivity
backbone.

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 India’s fast-evolving healthcare industry on the cusp of a digital revolution driven by the Indian consumer

Potential impact of Ayushman Bharat

Digital Mission deployment
In addition to the hard infrastructure and supporting connectivity related
interventions that have progressed rapidly in the recent years, healthcare policy
has also aimed at creating a foundation for digital healthcare innovation in India
through the Ayushman Bharat Digital Mission (ABDM) program. ABDM primarily
aims to improve the quality and knowledge base of the healthcare sector in India in
a consistent, unified and standardized manner.

The ABDM Program is critically important for the digital health platforms in India to
affect a step change. With a primary objective to establish a health data capture
framework, the program can support an eventual development of a ‘single source
of truth’ for personal and facility level health data across the entire population.

The core of the ABDM program is the Unified Health Interface (UHI) framework. In
order to eventually support and sustain an insurance covered healthcare model,
having a reliable source of data and leveraging it to analyze performance and drive
improvement is critical.

As information travels across the continuum of care, it becomes difficult to

measure health care quality and healthcare facility performance. All health
stakeholders and policymakers require a consistent data foundation that delivers
actionable information from a consolidation of various data sources. The UHI is
targeted at precisely that.

UHI aims at streamlining the digital health service experience for the providers
of health service and the patient by establishing and standardizing the
technology pathways that enable such services to be given.
UHI is envisioned as an open protocol for various digital health services. UHI
Network will be an open network of End User Applications (EUAs) and
participating Health Service Provider (HSP) applications.
UHI would enable interoperable connections over a nationwide decentralized
open, secure and inclusive network. It will use Registries in NDHM, that keep a
list of the entities participating in the network and Gateways that enable entities
to communicate using the standard protocols.

Enabling safe storage and easy access of medical records, ensuring access to
accurate information on healthcare providers will allow better decision making by
the Government. Geography and demography based monitoring and effective
evaluation of various programmes and interventions can be affected depending on
patient outcomes.

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 India’s fast-evolving healthcare industry on the cusp of a digital revolution driven by the Indian consumer

The overall architecture of the program includes a 4-layered structure (principally)

with
Public digital goods such as Aadhar for patients, Facility Registry for Hospitals,
Professionals registry for practitioners in order to create unique identification
databases as the foundation layer
Health data at both patient, practitioner and facility level to be collected and
maintained in the overall
Unified health interface to enable consistent and secure access to relevant
health information
User applications such as Aarogya Setu and other cases to deploy solutions that
accept information from the UHI layer.

The program, upon full implementation, has the potential to realize several benefits
to stakeholders across the healthcare ecosystem. Specifically for key participants of
the healthcare ecosystem, there may be several opportunities:

For Patients – a singular and consistent clinical history will enable better
diagnosis, comorbidity management, easier case reviews and second opinions,
better availability of health data resulting in diversified and lower health premia,
reduced transaction time and costs for health insurance and systematic tracking
of health progress

For Healthcare professionals – collecting standardized and unified health

information will enable better clinical decision making, greater data availability
for patient treatment, better and easier assessment of clinical risks and easier
and more streamlined clinical protocol monitoring

For Healthcare providers – Enabling community partnerships, easier linkage with

governmental and social programs as they get deployed, greater access to
patient pools, better clinical risk monitoring, better morbidity management /
tracking and enhancing competitiveness vis-à-vis other market participants.
Effective data use can also enable catchment expansion for high quality and
efficient facilities, reduced marketing and patient outreach costs resulting in
increased visibility of the hospitals’ doctors

For Health Insurers – Optimizing the insurance life cycle, as adopting the health
ID as a patient ID could enable consent based access to linked health records.
Opportunities in policy portability and information exchange Allowing patients
to link a single health ID to multiple provider and insurance IDs for cross insurer
consistency checks and fraud prevention. Optimization in policy premiums for
lower risk/healthier individuals and enablement of addition of more diversified
and larger risk pools.

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 India’s fast-evolving healthcare industry on the cusp of a digital revolution driven by the Indian consumer

For Researchers – to enable clinical variations for enhancement in care

pathways, new product development, clinical trials management and selection,
and outcomes enhancement

Policy makers – effective capacity tracking and monitoring, surge capacity

management, redirection of policy initiatives towards emerging areas of
lacunae.

Opportunities across the care continuum

for digital health and services in India
Opportunities that are created by ABDM to make healthcare delivery in India much
easier and faster by leveraging information and communication technology. Given
the market gaps and digital access enablement for external solutions – coverage
and capability improvement measures may represent significant growth
opportunities in the Indian marketplace.

Use cases that can likely see good traction in the market could center around:

1. Digitally enabled home healthcare, chronic care, and extended care:

Home healthcare for chronic diseases and lifestyle ailments may offer potential for
digital enhancement. Patients and families of patients have historically relied on
fragmented and unstructured recruitment of home healthcare practitioners
through personal networks, regional ads etc. Aging and life expectancy increases
have resulted in increasing clinical care provided in a home setting. these services
can be potentially aggregated and provided in a structure like ad hoc workers.

Several use cases emerge in geriatric care and home healthcare involving the use of
IoT and wearable devices. GPS Devices to track and monitor geographical position
of patients through portable devices that may be affixed to patients’ clothing or
person can assist caretakers in cases of patients with cognition challenges.
Geofencing also allows alerting caregivers to patients leaving / crossing certain
thresholds/boundaries. Tracking patients on an active basis also allows patients
freedom in movement within and outside facilities while retaining the ability for
caregivers to find and assist in case of any emergencies.

Wireless Home Monitoring technology solutions are also becoming increasingly

mainstream as streaming video devices become more miniaturized, more energy
efficient and better networked even in markets with lower disposable incomes like
India. These technologies allow caregivers to identify and monitor patient behavior
and in-home appliance usage to minimize risks associated with injuries, enables
greater household safety and speedier response in case of adverse events.

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 India’s fast-evolving healthcare industry on the cusp of a digital revolution driven by the Indian consumer

2. Preventative care enabled through use of IOT devices:

Wearable sensor technology to track routine activities such as walking patterns,

location and positioning, fall / injury detection, emergency messaging / SOS, heart
rate or vitals monitoring also enable caregivers to provide and extend care to larger
patient pools, in addition to providing more customized care and monitoring to
specific cases. IOT devices are becoming increasingly affordable – especially
wearables and are gaining traction among the population – with wearables alone
4
registering growth of 93.8% by volume with large market share captured by value
segment players like Noise, boAt, Realme and other players launching products in
the affordable INR 3,500 – 6,000 range. Collected data from sensors over a period
of time – if collected in a platform approach – can be used for preventative care
rather than responsive care as well.

3. EMR Adoption and Diagnostic data integration:

EMR adoption is the next digital frontier in Indian healthcare, primarily driven by
the Ayushman Bharat Digital Mission. The next wave of growth in medical data
generated from HIS systems is catalyzing the next iteration of care delivery –
utilizing Big Data and Evidence Based Care.

Applying big data analytics and evidence based care principles to enable:

Precision medicine - Utilization of research and centralized data to promote

enhanced diagnosing & personalized patient care
Safety practices - Use of predictive analytics to promote quality care and patient
safety (e.g. Infection risk monitoring)
Population health management - Utilization of analytics for use in epidemiology.
(E.g. Linking EMRs with GIS to identify healthcare trends in specific areas)
Readmission Analytics - Analysis of EMRs reveals trends that highlight patients
likely to need additional treatment to prevent readmission
Data security - Securing medical records by identifying changes in network
traffic or behavior that indicates a cyber attack
Insurance claims - Improve the efficiency of medical insurance claims by
revealing claim trends and streamlining claims processing
Consistency and standardization in data being collected from diagnostics can
also allow longitudinal tracking of key biomarkers and

[4] IBEF, Medical Devices Industry in India

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 India’s fast-evolving healthcare industry on the cusp of a digital revolution driven by the Indian consumer

4. Tech-enabled capacity augmentation:

Concepts such as e-ICUs and Virtual Hospitals (some of which are already under
pilot deployment with startups/large healthcare groups) enable efficient
deployment of critically scarce intensivists and at the same time enable asset-light
operations in the conventional healthcare delivery approach. e-ICUs and Virtual
hospitals may allow several advantages 5 over conventional facilities. Lowered
headcounts (on a per patient served basis) for highly trained and skilled
intensivists, reduced risk of nosocomial infections due to lower contact, reduced
hard capex cost in ‘real estate’ components of healthcare provision, and at the
same time superior distribution of super-specialty intensivists’ capabilities across a
wider group of healthcare facilities or geographical centers.

Consultations in India represents another opportunity to pursue digitally – both for

Primary Care Visits as well as post care follow up discussions. Digitally enabled
consultations and post care follow ups could represent a significant opportunity.

India is also a significant healthcare destination from a Medical Value Travel (MVT)
perspective. Historically, India’s positioning as an MVT destination has been largely
on account of the high quality and deep experience of physicians practicing in the
marketplace, significantly cheaper cost of care on a dollar-to-rupee basis and soft-
power presence of India as a nation. Opportunities exist for digital health to
provide pre and post procedure support through digital offerings.

5. Scalable supply chain and aggregated value-based procurement solutions:

Developing aggregated but scalable solutions. Healthcare provider networks in

India straddle a large spectrum of capability areas and sizes – from single facility
family-owned healthcare organizations to integrated and broad-based chains with
dozens of hospitals operating thousands of beds across multiple cities exist in the
marketplace. Smaller players represent opportunities to aggregate supply chain
services under a data and digitally enabled umbrella.

6. Predictive / prescriptive digital supply chain management solutions:

For large scale players, standardization is a critical factor enabled by digital

offerings. Processes, such as procurement of any materials, their management and
tracking, need to be made consistent across network(s). A universal approach leads
to effective supply chain and vendor management as systems move to a central
procurement management model across the entire spectrum of supplies.

[5] National Center for Biotechnology Information (NCBI) - Electronic intensive care unit: A perspective amid the
COVID-19 era

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 India’s fast-evolving healthcare industry on the cusp of a digital revolution driven by the Indian consumer

Such systems if executed well can also provide necessary checks from a supply
chain governance perspective. Systematic tracking to prevent pilferage and misuse
of items can lead to significant revenue losses. Systems should also be integrated
to the financial systems such as invoicing and digital payments. Integration and
automation of supplier reviews and consolidation of supply also supports in
maintaining relationships with vendors and suppliers.

7. AR/VR based training in specialized care:

AR/VR based applications represent opportunities for a variety of training and

capability development sessions. For low complexity physician education programs
by pharma and medical devices companies, pure AR / VR solutions may suffice.
However, for more technically complex medical devices / implant-based training
and development activities, Mixed Reality applications are also emerging – reducing
the training gap vis-à-vis real life, by enabling physicians and care givers to gain
tactile experience in addition to audiovisual experiences.

8. Digitally enabled aggregation for standalone facilities:

A large majority of India’s healthcare system is disaggregated and consists of

standalone facilities. These facilities may not have the scale to reap benefits from
digital health enhancements even if they choose to invest. Capabilities to effectively
deploy effective and integrated digital health solutions in these facilities may also
be a constraint in a large majority of such facilities. Nor will it be easy for smaller
facilities to comply with or leverage unified health information structures as will be
rolled out under the ABDM program. This represents a clear opportunity for
HealthTech enterprises to potentially develop modular, scalable, customizable, and
easily implementable solutions for such players.

Similar opportunities also exist in digitally enabled supply chains and procurement
value creation initiatives as well. Standalone facilities may have demand
variabilities and challenges in integrating digitally with suppliers. These may also
not have right capability set to push value-based procurements concepts viably.
However, intermediaries who can aggregate and have ability to digitally interface
with both suppliers and consumers, can potentially allow for smoothening and
predictability, managing economic order quantities and enable efficiencies in
procurement.

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 India’s fast-evolving healthcare industry on the cusp of a digital revolution driven by the Indian consumer

9. Other medium-to-long term opportunities

In addition, several other opportunities can be digitally enabled and made more
effective. Digital loans, funding linked to clearly defined digital readiness and easier
financing access can allow health organizations to invest in digital and improve
their “Digital IRR”. However, this may require the digital health ecosystem in India
to become more formalized and digital health plays become more standardized and
segregated.

As digital penetration starts to hit critical mass, the middle- and lower-income
segments in India will also start to become viable from a service delivery
perspective. These segments already have growing penetration of smart devices
and platforms to support digital health. With increasing availability and critical
mass, the fortune at the bottom of the healthcare pyramid in India can become
digitally accessible also.

Over the longer term, as overall health delivery system matures, India may move
towards coordinated health, and eventually towards a managed health network.
However, this will require the entire ecosystem to be able to exchange information
on a common framework – something that will be enabled through digital health
offerings.

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 Innovation & Digital
Imperatives for the Indian
Healthcare Ecosystem
 India’s fast-evolving healthcare industry on the cusp of a digital revolution driven by the Indian consumer

India presents a unique opportunity of having a vibrant existing Digital Health user
community of 400 million. With the further penetration of smartphone, 5G adoption
and service provider innovation, by 2030 India could easily have over 1 bn Digital
Health users. This will help catalyze a transformation in the Indian healthcare
creating the platform to provide quality, affordable care to all Indians. The
government has also created a scalable technology architecture (through Ayushman
Bharat Digital Mission) for healthcare ecosystem players to drive technology-led
transformation of the sector. The healthcare industry now needs to step up and
break-through the digital divide. To realize the full potential of Digital Health, we
propose the following imperatives for the various industry stakeholders:

Providers need to rethink their approaches towards digital health. Unlike a

historical focus on utilizing digital as a ‘good to have’, digital will now become a
‘must have’. Specifically, healthcare providers will have to be “Digital First” at a
strategic level. Unless they do so, providers will run the risk of being disrupted by
digital interventions, entrepreneurs, and competitors. The offerings that providers
create need to be deeply integrated as well. Integration, as is evident from
consumer behavior trends, is a critical requirement to capture and retain the
consumer base over the long term. At the same time, digital should not just be
considered as a front-end / patient interface activity.

Cost effective healthcare delivery and capturing efficiency gains from investments is
also critically important.This will require developing digitally enabled supply chains
that are able to tide over disruptions, allow consistency in a difficult market like
India, and are a scalable and efficient

While Regulators and Policy Makers have taken steps in the right direction, they will
also need to become the system’s conscience as Digital Offerings are rolled out. The
most critical imperative for the policy makers will be to ensure the program is
governed effectively and appropriately. Data access, availability and privacy are
concerns of global consequence and with greater consumer awareness, it will be
necessary for the regulators to be the custodians of the health data generated.
Regulators will need to play an active role in a) being an ombudsman looking to
balance compliance with the prescribed standards and, commercial and policy
support considerations and b) supporting new and incubment digital player to
garner and secure funding for HealthTech startups.

Likely the most critical role in the transformation will be played by Investors and
Startups. As the startup ecosystem and linked investor base starts to deploy
resources aggressively in new product and service line development and new
ventures targeting digital health opportunities, an attractive and independent
ecosystem could gradually emerge supporting Digital First offerings will be critical.
These will require to be nurtured and effectively managed by the investor group.
Investors will also need to consider digital ability as integral in their deal flow and
screening processes and not just an incremental differentiator. In parallel, the
startup ecosystem needs to integrate and penetrate brick-and-mortar healthcare
delivery as well, to enable access to care.

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 India’s fast-evolving healthcare industry on the cusp of a digital revolution driven by the Indian consumer

However, a “Digital First” investment / resource allocation approach should not

become a “Digital Only” approach for investors and health tech startups. True
integration is only possible with both the digital realm and brick-and-mortar realms
being seamlessly integrated. Ensuring investment / M&A targets will need to be
screened and scored on a Canada visa. All of these should be targeted at
developing an attractive, independent, and lucrative investment ecosystem for
investment in health, health tech or digital health trends.

Digital health should also be considered by investment houses during the deal
evaluation, deal assessment and eventually, a value creation plan. Financing digital
health innovations and platforms through greater emphasis on HealthTech and
InsurTech startup ecosystems.

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Authors

Barnik Chitran Maitra Vikas Kharbanda

Managing Partner, India & South Asia Partner, Healthcare & Life Sciences
Arthur D. Little Arthur D. Little

Prithweesh Ghosh Fabian Sempf

Principal, Healthcare & Life Sciences Principal, India & South Asia
Arthur D. Little Arthur D. Little

Acknowledgements

Siddhartha Bhattacharya Dr. Harsh Mahajan

Secretary General Founder & Chief Radiologist
NATHEALTH Mahajan Imaging

Dr. Shravan Subramanyam Dr. Ashutosh Raghuvanshi

Managing Director Managing Director & CEO
GE Healthcare Fortis Healthcare

Ameera Shah Sunil Thakur

Managing Director Partner
Metropolis Healthcare Quadria Capital

Mukul Goyal Saloni Mehta

Business Analyst Business Analyst
Arthur D. Little Arthur D. Little

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