India Healthcare Outlook 2024

In fiscal year 2023-24, the total health expenditure is expected to reach Rs 79,221 crore, up from Rs 72,269 crore in the previous year. The case for India Healthcare is truly a unique one as 49.82% of country’s healthcare spend is out of pocket today. Couple that with the increasing insurance penetration in the country, and a plethora of revenue pools open up. At 3one4, we are excited about businesses building at the frontier of healthcare to disrupt the patient outcomes in the country.

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Evolution of Health OS

So far, health data for Indian patients has existed in silos, at best. Not only has this resulted in poor patient outcomes but also sub-standard interaction with all the stakeholders in the healthcare ecosystem.

The Ayushman Bharat PM-JAY scheme is expected to be the torch-bearer for innovation through its United Health Interface (UHI), digital registries, and electronic health records (EHR), to further strengthen outcomes for digital health.

With data collection and sharing at it’s core, ABDM aims to disrupt the patient interaction with the healthcare ecosystem in India. One of our portfolio companies, EkaCare is the largest private player in this segment with 11Mn+ downloads, 1Mn MAUs, and over 85 Mn+ health records on the platform.

At 3one4, we believe that a data-powered core opens multiple large profit pools ripe for disruption in this segment.

By enabling family-first approach to healthcare records, EkaCare is the custodian and enabler for tracking, managing, and engaging with doctors, pharmacies, and diagnostic chains.

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Global IPs - Built in India, for the World

As per a recent report by Bain, Healthcare innovation in India is currently a $30 billion opportunity, dominated by pharma services and healthtech; biotech and medtech are nascent but witnessing green shoots.

As talent in India continues to evolve and grow, we are bullish about the country’s ability to not only leverage R&D capabilities but also do so at a labour-cost arbitrage. Given India’s emerging dominance in pharma and bio-tech, we are excited about ventures bridging the following gaps in the ecosystem:

• Sustainable and global supply chain - creating, fostering, and developing alternatives to current ingredients as well as end-products through efficient global networks
• Cost-efficient IPs - In the next decade, India is likely to become a hub for next generation of innovation across pharma, medical devices, and synbio. IPs that leverage cost arbitrage and have the potential to create a global distribution have a right to win.

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Provider Productivity

As informed by the National Medical Commission (NMC), there are 13,08,009 allopathic doctors registered with the State Medical Councils and the National Medical Commission (NMC) as on June, 2022. Assuming 80% availability of registered allopathic doctors and 5.65 lakh AYUSH doctors, the doctor-population ratio in the country is 1:834. Also, there are 36.14 lakh nursing personnel in the country as on December, 2022. Assuming 80% availability of nursing personnel, the nurse- population ratio is 1:476.

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With an increasing population, the healthcare ecosystem in the country needs a complete re-haul driven by the intersection of technology and patient outcomes. Some opportunities we see across the spectrum include:

• Better patient experience management solutions for both hospitals and clinics
• Remote patient monitoring
• Integrated payer experience
• Analytics and data interoperability suite
• Provider enablement

Overall, we believe that solutions that can drive delta in patient outcomes and experience have the potential to unlock massive profit pools.

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Our Investment in Dozee

It is with this thesis that we backed Dozee, a leading remote patient monitoring device globally. Using Ballistocardiography (BCG), Dozee’s product offering involves the placement of a thin sensor sheet under the mattress thereby converting any standard bed into a step-down ICU. Without any contact, it tracks heart rate, respiration, cardiac performance, blood pressure, sleep and heart rate variability. It also comes with additional components to monitor oxygen saturation, ECG and temperature. Dozee then uses AI algorithms to generate an Early Warning Score enabling early detection of health deterioration for timely medical intervention to provide unmatched patient safety.

In a short span of time Dozee has helped save more than 10,000 lives, and improve health outcomes for a lot many others. The figure below gives a snapshot of Dozee’s positive impact-

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Conclusion

With the right regulatory tailwinds, evolved consumer behaviours, and increasing adoption of technology by providers, we expect 2024 to be pivotal for healthcare in the country. Business models that can solve for adherence as well as patient outcomes have a right to win in as Healthtech 2.0 evolves in India.

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DISCLAIMER

_{The views expressed herein are those of the author as of the publication date and are subject to change without notice. Neither the author nor any of the entities under the 3one4 Capital Group have any obligation to update the content. This publications are for informational and educational purposes only and should not be construed as providing any advisory service (including financial, regulatory, or legal). It does not constitute an offer to sell or a solicitation to buy any securities or related financial instruments in any jurisdiction. Readers should perform their own due diligence and consult with relevant advisors before taking any decisions. Any reliance on the information herein is at the reader's own risk, and 3one4 Capital Group assumes no liability for any such reliance.Certain information is based on third-party sources believed to be reliable, but neither the author nor 3one4 Capital Group guarantees its accuracy, recency or completeness. There has been no independent verification of such information or the assumptions on which such information is based, unless expressly mentioned otherwise. References to specific companies, securities, or investment strategies are not endorsements. Unauthorized reproduction, distribution, or use of this document, in whole or in part, is prohibited without prior written consent from the author and/or the 3one4 Capital Group.}