A Digital Pill for Revolutionizing Healthcare

BCG

Boston Consulting Group (BCG) partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities. BCG was the pioneer in business strategy when it was founded in 1963. Today, we work closely with clients to embrace a transformational approach aimed at benefiting all stakeholders—empowering organizations to grow, building sustainable competitive advantage, and driving positive societal impact.

Our diverse, global teams bring deep industry and functional expertise and a range of perspectives that question the status quo and spark change. BCG delivers solutions through leading-edge management consulting, technology and design, and corporate and digital ventures. We work in a uniquely collaborative model across the firm and throughout all levels of the client organization, fueled by the goal of helping our clients thrive and enabling them to make the world a better place.

BCapital

B Capital is a multi-stage global investment firm that partners with extraordinary entrepreneurs to shape the future through technology. With more than $6 billion in assets under management across multiple funds, the firm focuses on seed to late-stage venture growth investments, primarily in the enterprise, financial technology healthcare, and climate tech sectors.

B Capital was founded in 2015 by Eduardo Saverin and Raj Ganguly. Shortly thereafter, they were joined by Howard Morgan as Chair and Co-founder and Kabir Narang joined as Founding General Partner. B Capital’s vision of providing an unparalleled platform to help the world’s most promising startups scale and transform their industries could not be achieved without the guidance of Sheila Patel as Vice Chair, who joined in 2021.

B Capital leverages an integrated team across nine locations in the US and Asia, as well as a strategic partnership with BCG, to provide the value-added support entrepreneurs need to scale fast and efficiently, expand into new markets, and build exceptional companies.

Foreword

The move towards higher spend per capita on healthcare has emerged as a key barometer of economic development and growth. This demonstrates the importance of healthcare from a government policy perspective, as well as the increasing prioritization of healthcare by individuals and corporates. In India, this curve has been moving upwards in recent years, driven by a confluence of forces, from a per capita healthcare spend of $45 in 2014 to $68 in 2021. However, it very much lags the healthcare spend compared to other large economies – thus reflecting the gap and potential in the sector.

India suffers from ‘dual disease’ burden with acute disease burden growing at 6%, while chronic disease burden (diabetes, cardiac diseases, respiratory diseases etc.) growing at 9% overtook the acute disease burden in 2014. In this context, and with a growing middle class and awareness of health, as well as increasing government expenditure on health (from 1.4% in 2018 to 2.2% in 2022), we expect the overall healthcare market to grow from $167Bn in 2022 to $458Bn in 2030.

Healthcare delivery ripe for disruption in India

India lags major economies in overall healthcare spending as % of GDP. Government healthcare spending in India on the rise with aim to increase spend to 2.5% of GDP by 2025.

India witnessing highest healthcare inflation despite fall in COVID-related hospitalizations. Despite COVID-19 related hospital admissions going down in the recent past, medical inflation in India has continued to rise. Routine surgeries have seen their pricing go up by 8-10%. Consumable pricing is up 17-18%. Medical inflation is passed on to consumers.

High chronic disease burden in India with 2 largest diabetes population, most of whom are not treated. Healthcare is under-resourced in India with number of beds per 1,000 people being far below WHO standards.

Emerging themes shaping the digital health landscape

A Digital Pill for Revolutionizing Healthcare

10 Key Themes shaping the path in digital healthcare:

1. Broader adoption of digital healthcare has flourished post the pandemic
2. Increasing specialty care solutions customized for the Indian environment
3. Rising insurance penetration and OPD coverage to drive greater adoption of online consultations & patient services
4. Incumbents are ramping up digital presence and competitive intensity
5. Ecosystem Partnerships
6. Consolidation being led by several deep pocketed players

Digital healthcare adoption has continued to grow strongly post the pandemic, irreversibly changing consumer behavior.

Key factors leading to rise in usage of digital healthcare adoption are pandemic-induced adoption and retention led by price & convenience. Users found digital platforms cheaper while offering a wider range of options, higher service quality and greater convenience vs. physical counterparts.

Government leading digital health initiatives to ensure healthcare accessibility and affordability in India

Aarogya Setu and the National telemedicine program to provide primary care to remote areas, are examples of government efforts to improve healthcare accessibility and affordability.

Specialty care models have emerged which enable continuous monitoring of patients’ wellness.

E-Pharmacies are adopting a multi-channel approach to expand addressable market by servicing acute Rx customers.

Significant Government push for integrated digital health infrastructure with Ayushman Bharat Digital Mission (ABDM)

1. Personalized Health ID for interoperability & sharing of data across providers and platforms.
2. Standardized Healthcare Provider Registry to enable higher quality of care
3. Longitudinal Patient Health Records for predictive solutions.

Conclusion

As startups scale on customers and omnichannel, incumbents are ramping up digital capabilities to capture growth and counter threat from digital natives.