After banking, financial services and insurance (BFSI) and government, healthcare seems to be the next big growth vertical opportunity for Indian IT firms.
Global research firm Gartner, in its report, said health care providers in India are expected to spend $1.08 billion on IT products and services in 2014, an increase of 4% over 2013. IT services spend by the healthcare sector is expected to reach $276 million in 2014, up from $266 million in 2013 – with the consulting segment growing by 8%.
This forecast includes spending by health care providers (includes hospitals and hospital systems, as well as ambulatory service and physicians' practices) on internal IT (including personnel), hardware, software, external IT services and telecommunications.
Remarked Arvind Thakur, CEO of NIIT Technologies, "While healthcare vertical has become a huge focus globally – especially in the US with renewed patient-focus through Obamacare - this provides Indian IT vendors with better capability, given their global experience to service the rapidly expanding healthcare market domestically."
Not surprising, given the fact that the healthcare sector in India is expected to grow to $158.2 billion in 2017 from $78.6 billion in 2012, according to a report by a consultancy firm Equentis Capital, with the healthcare sector growing at a 15% CAGR.
In the third quarter results, most top tier IT firms, including Cognizant, TCS, Infosys, Wipro and HCL Technologies have seen the healthcare segment contribute almost a fourth to total revenues.
While rising population, growing healthcare insurance and more private hospitals are contributing immensely to the rapid growth of the healthcare industry in India, the move towards adopting technology on par with the global healthcare standards is something creating a jingle in the kitty of Indian IT companies.
Dr Sanjay Sharma, oncologist at Lilavati hospital in Mumbai said, "Out of the $1 billion estimated spend by the healthcare sector in India, 30% of the spend will be on improving healthcare IT infrastructure, while 70-80% will be spent on new technologies in diagnostics, robotics, imaging, etc to minimise patient mortality rate, reduce days spent in the hospital by 50%, and introduction of newer technologies used abroad in patient cure."
Leveraging this opportunity, Indian IT body Nasscom signed a memorandum of understanding (MoU) with Healthcare Federation of India (NATHEALTH) at the Nasscom India Leadership Forum 2014 last month.
In the words of R Chandrashekhar, president, Nasscom, "The healthcare sector is experiencing a steady and stable transformation world over, with IT playing a central role in every aspect of the healthcare value chain."
Adds Samiron Ghoshal, leader - IT advisory practice, India, EY concludes, "EY is currently working with four major hospitals for large scale IT implementation, so we definitely see huge potential in the healthcare space in India driven by e-health initiatives by the government – second only to e-banking and e-governance."