The Covid 19 pandemic tested the deep waters of the Indian healthcare system while laying open its operational and structural weaknesses though there were a few silver linings, one such silver lining was providing the impetus to the growing healthtech industry. Experts say that the pandemic has expedited healthtech adoption which would have taken 4 to 5 years in a non Covid scenario.
The pandemic accelerated the use of technology among the patients as well as providers leading to a top line growth for the healthtech industry in the last few years. As per a 2021 report by the RSBA Advisors, the healthtech industry was valued at USD 1.9 billion in 2020 and is now poised to touch USD 5 billion by the year 2023 growing at a CAGR of 39 percent. The report expects the sector has the potential to grow to USD 50 billion industry in the coming 10 to 12 years.
According to the research, the healthtech sector accounts for less than 1 percent of the overall healthcare industry implying that the sector has an imminent opportunity to scale its growth. As per media reports the industry currently employs around 5000 startups and has 6 unicorns of valuation above USD 1 billion. 2022 saw two startups wearing the unicorn hat, the online pharmacy Tata 1MG and the molecular diagnostics firm Molbio Diagnostics aided by investments from Tata Digital and Temasek respectively. The other unicorns in the healthtech space include Innovaccer, Pharmeasy, Pristyn Care and CureFit.
Speaking on the investments Gaurav Bagga, Head of Product & Engineering, Pristyn Care stated that “Between 2014 and March 2020, Indian healthtech startups secured funding of USD 2.3 billion across 459 transactions which reflects that technology is ready to strengthen the healthcare ecosystem of India.”
But the ride after the pandemic induced impetus has not been as fruitful as the sector experts would have expected, industry pundits opine that healthtech remained a mixed story in 2022 as the footfall of patients returned to the hospitals rather than getting consultations online, affecting the telemedicine segment. However experts saw bright spots in segments like the online diagnostic services as well as the online pharmacy services pumping hope into the sector.
“The addressable opportunity for the healthtech start-ups is significant; however, their ability to capture this opportunity will be contingent on whether they are fundamentally solving key issues through tech interventions in the healthcare value chain,” stated Kaustav Ganguli, MD, Alvarez & Marsal.
Leveraging AI & Data
Innovation in technology is driving the healthtech segment and artificial intelligence and data are playing the catalysts in this driving force. According to the Fifteenth Finance Commission report, India has one doctor for 1,511 patients against the WHO norm of 1 doctor for 1,000 patients. Experts say this puts extra onus on AI and technology to enhance healthcare accessibility and its delivery.
“A major contributor to inefficiencies and inaccessibility in healthcare delivery is the lack of quality manpower. We cannot significantly augment trained resources availability quickly. This is where AI has a role to play, to automate the screening which till date has been the purview of humans,” says Dr Tathagato Rai Dastidar, Founder & CEO, SigTuple.
Tech experts say that AI aids in the early detection of diseases, and consequently early treatment, because the AI can flag abnormalities just as well as a human can. In fact, far more accurately, since unlike the human, the AI does not suffer from fatigue.
Sriram Natarajan, Director, CEO, Molbio Diagnostics explains that AI and Machine learning (ML) tools have started playing a big role in image analysis for reporting X-rays, CT scans, MRI scans etc. and are likely to become the cornerstone for all health interventions.
“There will be more focus on data acquisition, storage, processing and analysis. Automated data exchange will enable enhanced patient experience, and patient and disease management through more innovations and next-generation tools. AI, ML and IoT will continue to propel the healthcare segment for the benefit of all,” Natarajan adds.
According to a World Economic Forum report India’s expenditure on AI is estimated to touch roughly USD 11.78 billion by 2025 and is expected to contribute USD 1 trillion to the country’s economy by 2035. India’s AI spend rose by over 109 percent in 2018, totaling to USD 665 million.
In recent years, artificial intelligence, data and the Internet of Medical Things have rapidly expanded from simple devices designed to track vital signs such as heart rate and blood oxygen levels to smart watches that are capable of even complex scans such as ECGs, smart textiles that can track your blood pressure and also predict the risk of heart attacks, enumerates Bagga.
Bagga further says that a growing emphasis is being placed on developing digital wearable devices that are capable of detecting signs of mental illnesses with the use of physical indicators such as sleep patterns, activity levels and heart rate to detect when a person may be at risk of depression.
Data is the fodder for artificial intelligence, thus data experts opine that data will retain its primary role of being the main driver of building a quality healthcare infrastructure. Experts say that a centralised repository of healthcare records or EHR (Electronic Health Records) is the need of the hour which will aid doctors in accessing all the health records of patients assisting in better clinical outcomes.
Concerns: Data Security & Privacy
The government is pushing hard to create EHR and ABHA IDs (Ayushman Bharat Health Accounts) under the Ayushman Bharat Digital Mission scheme, claiming that over 8 crore health records have been digitally linked. The concerns around data security and privacy are now more prominent than ever.
As the cybersecurity attack on the premier health institute AIIMS which houses health data of top politicians and other influential personalities became a flashpoint in November 2022, leading experts to ponder whether going digital without building required framework to deal with such contingencies is really the way forward.
The Indian healthcare sector faced nearly 1.9 million cyber attacks between January and November 2022, as per a research by a cybersecurity think tank CyberPeace Foundation. In another report AI company CloudSEK in 2022 said that India was the second most hit country in terms of cyber attacks after the USA.
The concern is reflected in the registries of healthcare facilities under the ABDM scheme, as per the ABDM data, of the total 1,93,667 healthcare facility registries, only 45,772 are private facilities, while the rest are government health facilities for whom the registration is mandatory.
Cyber experts highlight that the country’s healthcare facilities need investments for building formidable firewalls to sustain such cyber attacks in future. “Due to cost constraints, most health institutions do not spend enough on updated hardware and software and also because modern hardware requires constant configuring and checking,” says Arvind Tiwary, Chair, Cybersecurity Working Group, IET Future Tech Panel.
Experts also believe that digital literacy has now become the need of the hour as more personal and sensitive information is being stored and transmitted digitally. “It is essential that individuals who handle sensitive data, such as patient data, are proficient in using digital tools and technologies securely and responsibly,” Rajusiva Arunachalam, Vice President, Technology, Omega Healthcare.
Arunachalam adds that it is also important for individuals handling sensitive data to be aware of the ethical and legal implications. This includes understanding and respecting privacy rights and being aware of the potential consequences of mishandling or improperly accessing sensitive data.
Healthtech’s Outlook In 2023
The healthtech industry is one of the fastest growing segments of healthcare with thousands of startups offering innovative products and healthcare services. However the sector also faces a few challenges of its own. One of them is securing adequate funding in the startups.
The challenge that the sector is currently facing is making sure that funding is being funneled to the correct places and equally distributed to help push the industry forward, explains Bagga.
Whereas experts also believe that few of the healthtech start-ups do not solve fundamental business problems and as such do not have strong reasons to sustain their business. “Some of these healthtech start-ups paths to profitability are unclear. This is because the models do not have strong unit economics supported by a strong proposition,” says Ganguli.
In 2023, industry pundits expect that online pharmacies will continue to shine in the healthtech space especially as they show greater efficiencies in sourcing and supply chain and demonstrate their trajectory towards profitability. Further, Ganguli believes that patient sourcing, in-patient pathways and post-discharge engagement will improve significantly for leading players, thanks to effective digital interventions.
Point of Care digital diagnostics will continue to decentralise testing to patient homes. Leading care providers will adopt such technologies to expand patient engagement to settings outside the hospital. B2B interactions will become more streamlined and data-driven in the healthtech industry, adopting best practices from pharmaceutical and FMCG industries, explains Ganguli.
