Healthcare Comes Home

By M H Ahssan

The home healthcare market potential in India is as vast as this country. But so are the problems. So what is making international companies rush to India.

Growing at a rate of 15 per cent, globally, home healthcare market is one of the fastest growing markets. Current estimates put the global value of the home healthcare market at $140 billion. The Indian home-healthcare market, which stands at $ 1.5 billion, is also waking up to the market opportunities with MNCs foraying the nascent market.

Explaining the growth in the Indian home-healthcare market, Pradip Kanakia, National Head of Markets and a member of KPMG India Leadership Team remarks, "The home healthcare industry in India consists of around 5,000 small and large organisations, largely unorganised which together generates." Expectations are that home-healthcare spending will eventually overtake prescription drug growth.

Home Healthcare in India
This segment includes monitoring devices, therapeutic devices, interventional devices and home services. Interventional devices include drug delivery mechanisms, for instance, those used by diabetics. Home services include in-house nurse care and also other state-of-art technologies. The monitoring devices ranges from the ubiquitous thermometers to devices capable of monitoring vital parameters of an individual such as ECG, Heart Rate, SpO2 and so on.

The Players
Companies like Phiilips and GE are entering the market with sleep care and home respiratory care solutions. Sleep apnoea, a common disorder with around 35-40 million people in India suffering from it, is a commonly targeted disease for this segment.

A variety of home healthcare services are offered at home by Metropolis Health Services, Medinova, Apollo Hospital Dr Lal Path Labs and Religare, who offer a wide range of tests at the doorstep- X-rays, ultrasound and ECG besides an array of pathological tests. Reportedly, at Metropolis Health Service (which currently provides services in Chennai, Bangalore, Kochi and Delhi) at present, 150-200 home visits are conducted per day compared to just a handful of tests a year ago. Reportedly, more than 10 per cent of the 6,000 patients in Dr Lal Path Labs go for healthcare at home.

Philips has changed its brand image from being a company in lighting to a 'health and well being' company. It acquired Resperonics in 2008 and launched it in March, this year. India was the first country (after US) where Philips Respironics portfolio was launched. Clearly, it indicates the company's focus to build market leadership positions in high-growth emerging markets like India. Philips plans to garner a market share of 40 per cent in this largely untapped home healthcare market by 2013.

"We should be careful and very clear in our inputs. For Indian market, we are entering with Respironics and that's our only offering to the home healthcare as of now," informs S Bhaskaran, Senior Director - Healthcare, Philips Innovation Campus.

From a strategic point of view, Anjan Bose, Senior Director and Business Head, Healthcare, Philips India says, "India is Introduction of the Philips Respironics product portfolio will significantly drive growth for Philips Healthcare in India both in the hospital and in the home segment." However, Philips plans to test the waters and expand their portfolio. Bose adds, "Our heritage in understanding how consumers think is combined with our deep clinical knowledge, putting us in a unique position to help address the modern day challenges of the Indian healthcare markets via groundbreaking ways." Presently, the company has a greater portfolio in healthcare in the US and Europe.

Globally, GE Healthcare has recently entered into alliances and made several acquisitions to strengthen their position in this area. GE Healthcare already has a strategic relationship with Living Independently Group, a provider of Quiet Care passive monitoring systems used to assist in the care of seniors. In March 2008, GE Healthcare acquired VersaMed Corporation, a provider of portable critical care ventilators for respiratory care, which can be used in the home setting. In October 2008, GE Healthcare acquired Vital Signs Inc, a provider of products for home respiratory care, particularly in the management of sleep apnea.

From a strategic point of view, S Ganesh Prasad, Director, Clinical Systems, GE Healthcare, South Asia explains, "Home-health is a key business focus for GE Healthcare. GE's strategy is to invest in high-growth businesses with huge global potential. Demographic changes present enormous healthcare challenges in the management of chronic diseases." In November 2008, GE announced it was leading a $ 5M three year home health research consortium funded by the Hungarian Government. "The acquisitions have helped us make a beginning in home health in India," adds Prasad.

To target patients suffering with sleeping disorders, GE has launched its CPAP employed in iSleep solutions through its acquisition of Vital Signs Inc, a Swedish company. iSleep is portable, intuitive and designed for home use. The Vivo series of electronic ventilation is also available. However, Quiet Care (home-monitoring solution) will be available in the future (no time-frame) Both iSleep and Vivo solutions are developed and produced in Sweden by Breas Medical AB.

In India, Johnson & Johnson Limited sells the One Touch range of blood glucose monitoring systems from Lifescan Inc, a Johnson & Johnson Company. The meters, strips, lancet devices and software that it sells here are simple and convenient systems are designed for individual patient needs, to complement different lifestyles.

Roche Diagnostics Accu-Chek is also one of the Blood Glucose Monitoring systems with its flagship brand Accu-Chek Active. Rouche also markets Accu-Chek Integra - the fully integrated Blood Glucose monitor with the unique benefit of No strip handling and No manual coding, Accu-Chek Sensor driven by BioSensor technology for use in hospital & Nursing home for Point of Care testing, Micral test : Urine strips to detect microalbuminuria and Accu-Chek Softclix lancing device & Lancets with patented Clixmotion technology for virtually pain free sampling and Accu-Chek Spirit Insulin delivery system.

Says Vivek Kamath, Business Head - Diabetes Care, Roche Diagnostics India, "Currently the market is in a state of dynamic flux, and we see tremendous market potential in this domain. The blood glucose monitoring system category has grown 18-20 per cent in the recent past, but, we foresee a series of growth drivers which will accelerate this market growth."

Biotronik Medical Devices India Private Limited, a subsidiary of Biotronik GmbH & Co KG Germany, a manufacturer of implantable cardiac devices, and pioneer in wireless remote monitoring technology, announced the India launch of the Biotronik Innovation Forum & New Home Monitoring services. "Biotronik Home Monitoring is available across the entire product portfolio of pacemakers, ICDs and cardiac resynchronisation therapy (CRT) devices allowing physicians to remotely monitor their patients' clinical and device status at any time and from anywhere in the world," said Gunnar Wochnowski, Vice President, Biotronik - Asia Pacific.

Using an intuitive, red-yellow-coded traffic light concept, daily as well as trend patient and device information is automatically evaluated and prioritised through the intelligent traffic light system and conveniently presented in the CardioReport. This status summary on the home monitoring secure website enables physicians to quickly review the most important information at a glance.

Not Getting Any Younger
Normally, we always think India as a 'young' country, but a reality check proves that India has an equal number of elderly citizens. According to a UN report, by the year 2025, India is expected to have 177 million elderly. According to Bhaskaran of Philips, "It is incorrect to think of this as a western country phenomenon. China and India already have the largest and second largest number of elderly people in absolute numbers." Hence, with the baby boomer generation becoming senior citizens, the demand for home-healthcare is on the rise.

Today, older people are also becoming increasingly more active in managing their own health and wellness. Looking forward, seniors of the future will be empowered, technologically-savvy healthcare consumers playing an active role in the management of their healthcare. They will increasingly want and expect their doctor's care at home and on the go. Explains Bose, "Cost and quality coupled with the ever larger aging population are fundamental issues and will certainly determine how healthcare is managed in the future. These societal trends are already leading to a 'computerisation' of healthcare in which individuals take health management into their own hands and where quality of healthcare is associated with personal choice."

Also, the number of people suffering from lifestyle diseases or chronic diseases which requires long term care is on the rise. Advancements in technology and medicine are not only enabling people to live longer lives, they are enabling people to do so while remaining healthier.

Homely Matters
Another reason for the growing potential in this segment is because a large number of patients who are chronically ill and need constant hospitalisation, prefer the home-healthcare mode in order to save hospital costs. Moreover, patients find it inconvenient to travel long distances to get hospital treatment. Considering the fact that Indians give prime importance to family, many patients prefer spending time at home either as post-operative care or in case of chronic illnesses. Thus, more and more patients want to adopt these new products in their routine lives. Elaborates Animesh Kumar, Managing Consultant, Healthcare Consulting, Datamonitor, India, "With the growing population and increase in the working population, we can safely say that these numbers are only going to increase. There is a huge need for such products/ services but there are not many players in the market. Hence, for any new entrant, the conditions cannot be any better. The market presents huge opportunities which can be tapped with the right product and promotions strategy." Hence, the demand and supply gap are favourable for any new player to enter this segment of healthcare.

Growth Opportunities
Though the home healthcare market is still in its infancy, the industry is poised to double every year going forward. "Today in India, many chronic diseases or injury conditions require long-term medical support and hospitalisation. As the percentage of these patients in the country increase the opportunity for home healthcare services is bright," says Kanakia. Also, many international players are targeting this segment of healthcare. According to industry buzz, a leading Japanese home-healthcare company will soon enter India in a big way.

More and more hospitals are beginning to recognise the utility of home-health solutions. They can now provide support to critical patients who need immediate attention by allowing patients who can continue care through home health situations. They can free up more ICU beds and medical ventilators. People are finding comfort in home care for problems like ventilation support sleep apnoea etc. While demand of beds can clearly drive this, comfort of getting support at home through easy to use technologies.

The growth story is linked with awareness drives. To spread the awareness and tap the market, the companies must run awareness programmes targeting both patients as well as general practitioners. A Vaidheesh, Managing Director, Johnson & Johnson Medical India, a Division of Johnson & Johnson Limited exemplifies, "The situation here is precarious. There are 40 million diabetics but it's estimated that around 25 billion don't know that they have diabetes. Worse still, those who know don't want to measure and maintain their blood glucose levels though there are meters available in the market. They buy the meter but don't use them, follow the regimen or protocol."

To target the right audience, it is important for companies to design strategies so that the product reaches the right audience. "If they effectively communicate the benefits (possibility of regular monitoring, greater prevention, higher convenience, cost-effectiveness, lesser chances of getting hospital-acquired infections, etc), they will be able to create value in the minds of the customers," informs Kumar.

Decent ROI
Leaving aside the demand and socio-economic factors, what attracts companies is the fact that home-healthcare is not largely capital driven and plus it enjoys higher ROI as compared to the hospitals. This model is not hospital centric very patient centric. Instead of selling the equipment, companies find it more profitable to give it on lease. Kanakia agrees, "In home-healthcare, capital costs are largely negated as there aren't any land and structural cost unlike the corporate hospitals which are highly capex driven and incur huge cost on land, building and medical equipment. It is not unusual to expect a ROI in the range of 25-30 per cent."

"One of the main source of revenue for manufacturing companies is generated by renting out this equipment. There is no third party who rents out the equipment, the companies provide them directly on rent, again saving costs" adds Singh.

Adds Dr Rakesh Kapoor, Manager- Business Advisory Services, Ernst and Young, "Product costs in comparison to marketing and distribution costs are of lesser significance in home healthcare." Also, compared to hospitals, there are no recurring expenditures.

With acute shortage of hospital beds, patients want alternative sources. Hence, again home healthcare is the best option they seem to consider. From the hospital's perspective, home healthcare is a positive trend as it leads to better utilisation of beds. It also brings cost efficiency to the hospitals as well as helps decrease hospital acquired infections. Looking at these factors, more and more companies are entering this market.

Challenges
Not everything is that rosy in India. There are many factors and roadblocks that slowdown the success of this concept in India.

High-Costs: Affordability is a major issue as not everyone can afford the products and services. These players will have to manufacture low cost products for the bottom of the pyramid population. Now, that healthcare is not restricted to tier I cities, products have to be manufactured for the population in rural India. To manufacture cost-effective products, many indigenous manufacturers are likely to enter this section of healthcare.

Fears and Apprehensions: The existing mindset among the patient population is another major challenge that the companies will have to tackle. "Patients are usually apprehensive about home healthcare and using devices at home," opines Shares Dr Navneet Singh, Consultant- Pulmonology-Thoracic Surgery and Medical Intensive Care, Fortis Flt Lt Ranjan Dhall Hospital.

Patients also doubt the accuracy of the results. They also fear survival of the patient once taken home. "Also, patients largely prefer to get treated in a hospital where they get comprehensive care under one roof," opines Kanakia.

Limited Distribution: The major chunk of costs goes in distribution. Distribution is a challenge. Right now, the distribution is limited to hospitals. Thus the distribution channel needs to be focussed. "We may need an entirely new way of reaching the technology to patients and we are working on an expanded dealer channel," remarks Prasad.

Unorganised Market: The sector is largely unorganised. Apart from a few organised players like Philips Healthcare, Metropolis Health Services, Religare GE, Medinova, Apollo Hospitals, Dr Lal's Pathlabs, the sector is largely unorganised. "The sector is characterised by fragmentation as the top 100 companies (by size) hold less than 20 percent share of the market," remarks Kanakia. This less market share can be attributed to the fact that largely, the chronically ill patients who require long hospitalisation only prefer home healthcare mode. Kanakia adds that most of the large hospitals chains in India are yet to adopt the home healthcare facility.

Awareness: The biggest challenge is lack of awareness. Not many people in India know about the products/services and hence the market is largely restricted to the metros and other tier I cities in India.

But argues Prasad from GE that tier II cities are picking up, "We have nearly 3,000 patients using sleep apnoea solutions in India today. Nearly as many people are using home ventilators for long-term life support at home. It is not limited to big cities. We see patients using solutions like this in smaller towns as well," says Prasad.

Apart from the lack of awareness about the products, the companies in the home healthcare segment also have to deal with the lack of awareness among patients regarding their own medical conditions. For example, millions of people suffer from Obstructive Sleep Apnoea in India, however only a small chunk is diagnosed.

Into the Future
Many analysts believe that from a technological perspective, the players which can explore this market are J&J, Siemens, Sony, Samsung and LG. However, it is also projected these companies which are technologically advanced can face competition from FMCG companies, who, can outsource the technologies and produce the same product at a much cheaper cost. Also, it would be a smarter strategy to target distribution at retail pharmacy stores. An analyst remarks, "Right now, most companies are supplying these products in hospitals. Instead, they should target the supply in pharmacy retail stores." Since distribution is a key challenge, pharmacy companies who enter this segment of healthcare have a greater chance of success. These companies have a much-more wider established chain of retail pharmacy stores.

The opportunities are definitely not limited to tier 1 cities. As one observes that there is a greater need for healthcare services in tier II and III cities, the healthcare players cannot ignore the vast numbers waiting to be tapped. Moreover, there is a greater chance of renting out these equipment in the rural areas where affordability and accessibility is a major issue. "While most providers are presently targeting the metros and tier I cities, there lies an equally great potential in rural areas too since they have low access to healthcare services and trained specialists," shares Kanakia.

With so many challenges to tackle, but an optimistic drive to survive, home healthcare market in India is here to stay. But how long will this industry take to pick up speed and enter into the fast gear mode, only time can tell. Market pundits have to wait and watch. But if a company like Philips chooses India from the entire world to be its launchpad for a product in home healthcare, the message is loud and clear - India is in the radar of home healthcare leaders.