India’s healthcare expenditure is expected to rise seventeen-fold by 2047 to touch Rs 190 lakh crore, up from about Rs 10-11 lakh crore now, as aging population, increasing non-communicable disease (NCD) load, early onset and late diagnosis will drive the demand for healthcare services, said the latest report from EY-Parthenon. This would push health spend to 6-7% of GDP by 2047, nearly doubling it from the current 3.1%.
Healthcare expenditure consists of in-patient spends, outpatient expenses and other items such as preventive care, administrative expenses and patient transport. However, despite a likely increase in the healthcare expenditure, the returns on investment will continue to remain under pressure. The report said that the healthcare sector will see an incremental investment of up to Rs 30 lakh crore by 2047. But the delivery of healthcare services offers modest returns of 12-13% despite sizable capital investments. “Other capital-heavy sectors such as life sciences, retail, FMCG and food & beverages offer higher returns. Healthcare delivery therefore sits at the lower end of the returns spectrum among capex-heavy sectors,” it said.
In the report, EY-Parthenon said that Indians are living longer but they are also getting sicker at younger ages. “The onset of NCDs occurs 3-10 years earlier than in high-income countries and late-stage detection remains a formidable challenge. Given worsening environmental and lifestyle factors such as rising air pollution, urban disease vectors, sedentary habits, chronic stress, this trend of early onset and mortality will likely continue to compound,” the report said.
It is estimated that the size of the population aged 40 years and above is projected to triple by 2047, reaching about 820 million, making up 50% of the country’s population. About 350 million of this cohort would be aged 60 or older which would drive a higher rate of disease incidence and significant growth in hospitalisations per year. “Thus, hospitalisations could potentially increase by 2.4 times, drastically increasing the quantum of our healthcare needs,” the report said.
With the likely increase in hospitalisations, the EY-Parthenon has estimated that the hospital beds across the healthcare sector will more than double to 4.8 million by 2047 as against about 2 million now. Though the report has suggested that active disease management interventions can reduce this incremental demand to about 1 million. “Indian industry has also been able to limit core price inflation to 3-4%; a large part of the growth in hospitalisation spend per capita has been driven by changes in disease complexity and increased use of higher-end therapies,” it said.
The report is based on research across 250 hospitals in 40 cities, surveys of 1,000-plus patients, and consultations with 70-plus CXOs, senior clinicians, administrators and investors.