Healthcare and health-tech: a look back and look forward

03rd April 2021
Healthcare and health-tech: a look back and look forward

April 3 2021: Business research and advisory firm, Praxis Global has just released its study on on the past trends of HealthTech in 2020 and what lies ahead for this sector in 2021.
The report suggests that COVID-19 has been an eye-opener for the overall healthcare industry, with both the Government and public becoming much more aware about preventive healthcare, digital healthcare, and healthcare budget and usage of technology to treat provide care to patients. 
Though hospitals saw a decline in its OPD and IPD footfall during the first few months of lockdown; for the HealthTech sector, COVID-19 turned out to be the much-needed catapult to push the customer adoption by ~2 to 3 times which if this pandemic had not occurred would have taken another 4 to 5 years. There was an increased adoption towards online
consultation, E-pharmacy, homecare services and E-diagnostics. Even hospitals tarted redesigning their strategy and increased its focus to acquire patients through online channels.
Executive summary: Healthcare system has never been in the spotlight in India’s history as it has been in 2020. COVID-19 pandemic brought a sharp focus on the sector and highlighted the already existing major gaps in accessibility and affordability. This gave rise to ealization of the role of technology in healthcare delivery.
Healthcare universe in India can be further divided into smaller ecosystems, which are responsible for the diagnosis, treatment, care, and rehabilitation of the patients. One of
these ecosystems is the HealthTech ecosystem
HealthTech is a fast-growing industry vertical within the broader healthcare sector, currently accounts for only 1% of the sector, it was at ~US$ 1.9B in 2020 growing at 39% CAGR and expected to reach ~US$ 5B by 2023. It is majorly composed of all technology-enabled healthcare products and services that are delivered and/or consumed by the patients inside and outside of the hospital or physician’s office like E-pharmacy, E-diagnostics, teleconsultation, B2B HealthTech, B2B medical supplies, and other healthcare solutions like personal health management, online home ealthcare, etc.
Indian HealthTech market size (2020)
- E-pharmacy and B2B HealthTech are the two largest segments in theHealthTech sector and account for ~70% of the overall HealthTech market
- E-diagnostic and teleconsultation are the fastest-growing subsegments in HealthTech; growing at 66% and 73% respectively 

Major players and investments in HealthTech
HealthTech startups will help complement existing infrastructure and bridge jarring accessibility in the healthcare industry. Indian HealthTech sector has seen a surge in investment from 2015 and the sector has received ~US$ 3.4B funding since 2014. According to data from Tracxn, late-stage companies got a lion’s share of the funds ($173 million or 43%) in India. 
Healthtech in 2020
COVID-19 pandemic catalyzed the growth of the Indian HealthTech industry, the main reason for this was the reluctance of the consumers to physically visit a place that can be a hotspot of infection. Even the consulting doctors were reluctant to physically indulge with the patient until and unless absolutely necessary. In such times, HealthTech played an important role in connecting the caregiver, patient, and various other associated services. It made primary care convenient and accessible for the public.
COVID-19 increased the demand for technology-based solutions to increase the efficiency and reach of the healthcare system. COVID-19 outbreak was an opportunity for the Indian healthcare system to work out its shortcomings; it also created positive momentum for HealthTech startups to develop innovative products.
Growth trends in the sector
- E-pharmacy saw a 200% increase in the number of orders in 2020, E-pharmacy adoption in households also increased by more than 2x post-COVID
- Number of consultations on teleconsultation platforms, increased by 300% in 2020; doctors reluctance to connect in person with patients drove this growth
- India’s E-diagnostics market was at ~US$ 0.07B in 2020 and is growing at a CAGR of ~66%; patients convenience, with diagnosis at home is the main growth driver
Business model adoption
- E-pharmacy saw the use of a subscription model for chronic patients, to better manage medication for long term diseases
- E-pharmacy players went through various business model changes like tie-ups
with local vendors for faster delivery and overcome the regulatory restriction on inventory holding, spread to become both B2C and B2B businesses
- Current focus of the players was on building basic blocks for teleconsultationand focus on quality access to health products
Consumer adoption
- 60-70% of the medicine order volume across E-pharmacy platforms came from patients suffering from a chronic disease
- 80% of the customers going for teleconsultation were first-time users., 50% more doctors joined the teleconsultation platforms
- The Union Home Ministry, vide order number 403/2020-D dated 24th March 2020, recognized delivery of medicines through E-commerce as an essential service. This was later echoed by 19 State Governments and the Departmentof Posts
- Telemedicine Practice Guidelines were announced by the MoHFW on 25th March 2020 laying out clear guidelines for registered medical practitioners to provide effective patient care through online mediums
-At the ‘Prarambh: Startup India International Summit’, Hon’ble Prime Minister
- The Govt has introduced NDHM, and eAccess to healthcare will be a key area for the country. However, regulation has been moving slowly in this space
Challenges and way forward
2020 has revolutionized the adoption of technology in healthcare, going forward this momentum is likely to continue. Going ahead following drivers and barriers are going to shape the future of HealthTech in India
Drivers for tech health: 
Need for improving accessibility
- High disparity in infrastructure between rural and urban areas; most notably in terms of unavailability of qualified practitioners in rural areas
- Technology-led solutions such as teleconsultation can improve accessibility
- Digitally savvy population with internet penetration of ~75% will further boost nadoption in consumers
Increase in lifestyle diseases
- Graying population, poor nutrition, a high-stress environment, sedentary lifestyle, and rising environmental pollution are contributing to an increase in the burden of lifestyle and chronic diseases
- Need for affordable technology interventions for early diagnosis, prevention, and better disease management
New innovations and improving affordability
-  Increased focus of existing players in managing downstream costs; technology sought for augmenting resources, capabilities, and efficiencies
- Leapfrogging of concepts between the developed and developing market
Supportive policy regime
- E-pharmacy Draft Rules when notified will cement the role of E-pharmacies in
improving accessibility to quality medicines
- The Govt has introduced NDHM, and eAccess to healthcare will be a key area for the country. However, regulation has been moving slowly in this space
- Ayushman Bharat and state health insurance will improve paying power of the public for HealthTech offerings such as teleconsultation
BARRIERS: There are many challenges that the players in the industry are facing daily and will continue to do so for some time. Industry’s focus on mitigating the impact of these barriers would also shape the way forward for the industry. Some of the notable barriers for HealthTech in India are as follows:
Behavioral barrier to adoption
- Absence of a physical examination and constraints on testing leading to inability to diagnose all illnesses properly
- Cultural habit of self-medication or consult chemists for small ailments
Lack of awareness among people in Tier 3 cities/villages
General resistance to change among people
Technical challenges
- Quality issues in audio/video calls due to internet connectivity and quality of mobile devices
- Gaps in the supply chain eco-system to cater to remote location
-  Lack of technical know-how, especially among senior citizens
- Concerns with data usage and privacy
- Lack of standardized data for the purpose of diagnosis and treatment
Investment challenges
- Dearth of healthcare mentors/investors in India when compared to other countries
Regulatory challenges
- Time consuming and tedious approval process
-  Lack of regulatory clarity on various HealthTech services and role of otherinnovative technologies like Artificial Intelligence and Machine Learning in this space
-Lack of Government focus to connect all HealthTech services on one platform,for the ease and convenience of the user
- E-pharmacy players cannot hold inventory as per current guidelines,clarifications in this will help companies to redesign their operational models
- Using AI, one of the key regulatory issues that are hampering the acceptance of AI in healthcare is the archaic regulatory infrastructure, black boxes as well as AI algorithms that constantly self-update, present safety concerns that have yet to be addressed by any regulatory framework.
Link to full report (PDF) here