Iris Chen ’15
Our first visit in Delhi was with Fortis Hospital in Gurgaon, the highest accredited hospital in the country. We met with the COO of the hospital who gave us a presentation on the healthcare landscape in India. Some statistics that I learned include:
- India has 17% of the world’s population but 20% of the world’s disease burden, 7% of world’s doctors, and 5% of hospital beds
- India’s healthcare market is projected to grow at a rate of 18%, significantly faster than the Western markets at 4%
- Overall, India has 1.3 hospital beds per 1,000 people. The World Health Organization recommends 3.5. In comparison, the U.S. has 6-7 hospital beds per 1,000 people.
- As a % of GDP, USA’s spend on healthcare is 4x compared to India’s
- India has 0.7 doctors per 1,000 people; the recommended amount is 25
- India has 60,000 hospitals; only 1% of them has 200 beds or more
The Indian healthcare market has many challenges ahead to catch up to the rest of the world. One of the issues noted is the huge imbalance of doctors in urban areas vs. rural areas. It’s difficult for rural areas to attract doctors when the salary and standards of living are better for doctors in the cities. And this fact is most unfortunate because the rural areas are in need of the most medical attention.
While there are improvements to be made in the healthcare system, there are a lot of advantages of Indian healthcare. For example, India has significant advantage compared to other countries in terms of competitive pricing and higher productivity. It costs $5k for a heart surgery in India (in the U.S., it is $100k). A cardiac surgeon in India earns $200K per year doing 100 surgeries/month. U.S. cardiac surgeons earn $1.2M/year doing 25 surgeries/month. With the significant low cost, medical tourism is growing in India. I also learned about the medical operating system process standardization for Fortis where the hospital was able to optimize various internal processes to become even more efficient.
After the presentation, we did a tour of the facilities. Since the bulk of the healthcare cost of the hospital is private (80% of people pay for healthcare out of pocket), you can definitely see where the financing went for the hospital. There was a relaxing/quiet area for patients before/after surgeries with comfortable seats, a food court, and even a movie theater that plays a couple of movies a day. It was like stepping into a 5-star resort for your hospital stay!
Our next meeting was with MakeMyTrip CEO and Founder, Rajesh Magow. He talked about founding and growing the company in a time where the internet was just starting to boom in 2000. In 2005, the company entered into a high growth phase and five years later in 2010, MakeMyTrip was made public. MakeMyTrip has been the market leader for online travel since the very beginning and currently has a 47% market share in the online travel agency. 1 in 8 domestic travelers in India use MakeMyTrip to plan and buy their tickets to hotels, flights, trains, buses, and packages. Currently, 35-40% of traffic comes from mobile as the Indian population buys more smartphones than any other device. In his talk, Mr. Rajesh Magow truly believes that mobile will change the game in the future.
Meeting with Montek Singh Ahluwalia, Former Planning Commission Deputy Chairman
Our last meeting in the Chazen India Study Tour was with Montek Singh Ahluwalia, the Former Deputy Chairman of the Planning Commission of the Republic of India. Mr. Ahluwalia spoke about the past public policies of the government during his time in the Planning Commission. Takeaways from his talk: Indian government’s priority of use of funds should be invested in education and healthcare. Government should be pushing for public and private partnerships. Initially, the government had a 40% subsidy and businesses would bid on the contract. However, Mr. Ahluwalia believe that private businesses and the government should work together to help fuel the Indian economy. In terms of a reasonable growth rate of India, Mr. Ahulawalia believes that a 7.5-8% growth rate was reasonable for the future. The Indian economy grew at a rate of 8.3% for several years before it slowed down. However, there is still the big issue of income inequality in the country: median incomes have not grown for awhile and the gap between the rich and the poor is growing significantly.
Overall, this meeting was a great recap of what we learned throughout all our company meetings in India. Investing in infrastructure, education, and healthcare are among the top concerns of all businesses and the government while still maintaining a healthy growth rate for the Indian economy. There is still much to be done about the income disparity in the country, but at least the government acknowledges that this is a growing problem and it will be interesting to see how the new government party deals with this issue.