Why Preventive tests are the future for diagnostic companies | The Financial Express

Why Preventive tests are the future for diagnostic companies

According to a report by Market Research, the Indian diagnostic labs market was valued at $12.31 billion in FY-2021 and is forecasted to grow at a CAGR of 12.25 per cent by FY-2027.

Why Preventive tests are the future for diagnostic companies
The state's National Health Mission is on the mission to develop an outcome-based approach to bring more clarity on the money spent on healthcare.

By Deepak Sahni

As Covid-19 cases start to inch up across the country, WhatsApp forwards about how to stay healthy and disease-free are doing the rounds again. Now, I don’t know if drinking lemon water and honey on an empty stomach can prevent Covid-19, but one thing is for sure – the pandemic has taught us how important it is to be healthy.

Along with fitness activities, preventive tests have also become an important tool that’s helping people stay healthy. In fact, within a few years, preventive tests and chronic disease packages will take up 90% of the diagnostic test business.

Why is this?

Rather than wait for a doctor to prescribe a test after a disease has been detected, getting your biomarkers checked can help prevent the progression of a disease, chronic or otherwise. For instance, a preventive blood test can reveal that a person has slightly high cholesterol. At this point, it may not require medicines, but diet changes and exercise can stop this from turning into full-blown heart disease. Preventive tests include hemograms, iron studies, kidney and liver function tests, blood glucose, vitamin deficiency tests, mammograms, pap smears, prostate exams and lipid profile tests, among others. According to a report by Market Research, the Indian diagnostic labs market was valued at $12.31 billion in FY-2021 and is forecasted to grow at a CAGR of 12.25 per cent by FY-2027. The Increasing Prevalence of chronic diseases in India is a major driver of market growth.

For years, a preventive approach to health has been advocated to enable early diagnosis and treatment, enhance the quality of life, reduce comorbidity and increase overall life expectancy, but it was the pandemic that drove the message home. People across economic backgrounds now understand that being healthy isn’t merely the absence of a disease or infirmity but rather a state of complete physical, social and mental well-being. This changed attitude towards health is also reflected in the healthcare industry’s evolution. The industry and its many stakeholders have realised that preventive healthcare has immense potential to advance universal health coverage while also reducing the overall cost of healthcare for the authorities and individuals alike.

There are also a few important factors which have put the spotlight on preventive healthcare.

Insurers focus on wellness.

The first is insurance companies’ focus on wellness. The recent guidelines by IRDAI make it possible for insurance companies to provide products that cover preventive tests as well as offer discounts and other incentives to customers who meet certain fitness criteria each year. Insurers have now realised that when their customers are healthy, it results in lower payouts. And, of course, customers also benefit from lower insurance premiums and better health.

Research conducted by Boston Consulting Group and research company LIMRA found that a majority of consumers in the US were willing to trust their insurance providers’ recommendations when it came to improving their health. Several insurance providers in India, including ICICI Lombard, Bajaj Allianz, Future Generali, etc., have tied up with healthcare apps or have launched products to promote wellness.

India Inc and employee well-being

The second factor is corporate India’s focus on wellness. Companies are now realising that a healthier workforce is also a more productive one. There is less absenteeism, more focus at work and better work-life balance for employees. As per a study by the Associated Chambers of Commerce of India, every INR 1 spent on employee disease prevention saves INR 6.62 in healthcare costs and INR 133 in absenteeism costs.

Employee wellness has been a focus for companies in the developed markets for a long time now because the business benefits are obvious. For example, leaders at American multinational corporation Johnson & Johnson estimated that the company had saved $250 million in health care costs from 2000 to 2010 due to their investments in employee wellness.

Major companies in India have been offering preventive test health check-ups for free or at discounted rates for employees for a couple of decades now. In the coming few years, companies will increase their tie-ups with diagnostic test providers so that their employees can choose a wider range of preventive tests in order to stay healthy.

Government efforts

The third factor which is leading to a rise in the share of preventive tests is the government’s efforts to promote wellness and, at the same time, increase access to healthcare for a wider cohort. Several Indian states now provide free health insurance to either all their residents or a vast majority of them. And government hospitals provide prescribed tests for a minimal cost. As a result, this category will become smaller as well as lower in margins for private players.

At the same time, it’s also a fact that chronic diseases are increasing among Indians. This includes diseases like heart disease, diabetes and hypertension. Doing regular diagnostic tests are important to manage the progression of diseases and make timely interventions. According to a report by TechSci Research, the Indian diagnostics market was valued at $12.3 billion in 2021 and is expected to grow at 11.65% CAGR by 2027.

In the coming decade, genome and DNA testing will also become more popular. The biggest genetic testing company in the US, Illumina, reported revenues of $4.52 billion dollars in 2021. Genetic testing can help consumers assess the risk of developing certain diseases and may also, in the future, help in the early detection of diseases such as cancer and Alzheimer’s through a simple blood test. This technique is called a ‘liquid biopsy’ and is much less invasive compared to traditional tests to detect these diseases.

In the years to come, consumers will pick services based on convenience, price and speed. At-home testing, which has been growing for the past few years, will continue to grow and dominate the market. Players in the diagnostics market need to keep these factors in mind and re-orient their focus on the promising areas of expansion.

(The author is a Founder & CEO, Healthians. Views expressed are personal and do not reflect the official position or policy of the FinancialExpress.com.)

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First published on: 22-11-2022 at 09:00 IST